Registration No. 333-31112
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 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 414
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 March 31, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
European Target 20 Portfolio, 2(nd) Quarter 2000 Series
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series
Value Line(registered trademark) Target Portfolio, 2(nd) Quarter 2000
Series
FT 414
FT 414 is a series of a unit investment trust, the FT Series. FT 414
consists of three separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a portfolio of common
stocks ("Securities") selected by applying a specialized strategy. The
objective of each Trust is to provide an above-average total return.
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 March 31, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 6
Statements of Net Assets 7
Schedules of Investments 8
The FT Series 12
Portfolios 13
Risk Factors 14
Hypothetical Performance Information 16
Public Offering 18
Distribution of Units 20
The Sponsor's Profits 21
The Secondary Market 21
How We Purchase Units 21
Expenses and Charges 21
Tax Status 22
Retirement Plans 24
Rights of Unit Holders 24
Income and Capital Distributions 25
Redeeming Your Units 25
Investing in a New Trust 26
Removing Securities from a Trust 27
Amending or Terminating the Indenture 28
Information on the Sponsor, Trustee and Evaluator 29
Other Information 30
Page 2
Summary of Essential Information
FT 414
At the Opening of Business on the Initial Date of Deposit-March 31, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Value Line
(registered
European Target 20 Target Small-Cap trademark)
Portfolio Portfolio Target Portfolio
2(nd) Quarter 2(nd) Quarter 2(nd) Quarter
2000 Series 2000 Series 2000 Series
____________ ____________ ________________
<S> <C> <C> <C>
Initial Number of Units (1) 15,010 15,006 15,031
Fractional Undivided Interest in the Trust per Unit (1) 1/15,010 1/15,006 1/15,031
Public Offering Price:
Aggregate Offering Price Evaluation of Securities
per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 2.75% of the Public Offering Price
per Unit (2.778% of the net amount invested, exclusive of
the
deferred sales charge) (3) $ .275 $ .275 $ .275
Less Deferred Sales Charge per Unit $ (.175) $ (.175) $ (.175)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.725 $ 9.725 $ 9.725
Redemption Price per Unit (based on aggregate underlying value
of Securities less the deferred sales charge) (5) $ 9.725 $ 9.725 $ 9.725
Estimated Net Annual Distributions per Unit (6) $ .3221 $ N.A. $ N.A.
Cash CUSIP Number 30265K 557 30265K 581 30265L 449
Reinvestment CUSIP Number 30265K 565 30265K 599 30265L 456
Wrap CUSIP Number 30265K 573 30265K 607 30265L 464
Security Code 58508 58510 58502
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date April 5, 2000
Rollover Notification Date June 1, 2001
Special Redemption and Liquidation Period June 15, 2001 to June 29, 2001
Mandatory Termination Date (7) June 29, 2001
Income Distribution Record Date Fifteenth day of June and December, commencing June 15, 2000.
Income Distribution Date (6) Last day of June and December, commencing June 30, 2000.
____________
<FN>
(1) As of the close of business on April 3, 2000, we may adjust the
number of Units of a Trust so that the Public Offering Price per Unit
will equal approximately $10.00. If we make such an adjustment, the
fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price on the
relevant stock exchange on the business day prior to the Initial Date of
Deposit. If a Security is not listed, or if no closing sale price
exists, it is valued at its closing ask price on such date. The value of
foreign Securities trading in non-U.S. currencies is determined by
converting the value of such Securities to their U.S. dollar equivalent
based on the offering side of the currency exchange rate for the
currency in which a Security is generally denominated at the Evaluation
Time on the business day prior to the Initial Date of Deposit.
Evaluations for purposes of determining the purchase, sale or redemption
price of Units are made as of the close of trading on the New York Stock
Exchange ("NYSE") (generally 4:00 p.m. Eastern time) on each day on
which it is open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) 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) The actual net annual distributions per Unit you receive will vary
from that set forth above with changes in a Trust's fees and expenses,
dividends received, currency exchange rates, foreign withholding and
with the sale of Securities. See "Fee Table" and "Expenses and Charges."
Dividend yield was not a selection criterion for the Target Small-Cap
Portfolio, 2(nd) Quarter 2000 Series or the Value Line(registered
trademark) Target Portfolio, 2(nd) Quarter 2000 Series. At the Rollover
Notification Date for Rollover Unit holders or upon termination of a
Trust for Remaining Unit holders, amounts in the Income Account (which
consist of dividends on the Securities) will be included in amounts
distributed to Unit holders. We will distribute money from the Capital
Account monthly on the last day of each month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $1.00 per 100 Units. In any case, we will
distribute any funds in the Capital Account as part of the final
liquidation distribution.
(7) 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 a Trust. See "Public
Offering" and "Expenses and Charges." Although the Trusts have a term of
approximately 15 months and are unit investment trusts rather than
mutual funds, this information allows you to compare fees.
<TABLE>
<CAPTION>
EUROPEAN TARGET 20 TARGET SMALL-CAP
PORTFOLIO, 2(ND) QUARTER PORTFOLIO, 2(ND) QUARTER
2000 SERIES 2000 SERIES
________________________ ________________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge 2.75% $.275 2.75% $.275
====== ====== ====== ======
Initial sales charge (paid at the time of purchase) 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge (paid in installments or at redemption) 1.75%(b) .175 1.75%(b) .175
Maximum sales charge imposed on reinvested dividends 1.75% $.175 1.75% $.175
====== ====== ====== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .265%(c) $.0265 .210%(c) $.0210
====== ====== ====== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060
Creation and development fee .250% .0249 .250% .0249
Trustee's fee and other operating expenses .208%(d) .0207 .082%(d) .0082
______ ______ ______ ______
Total .518% $.0516 .392% $.0391
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
VALUE LINE(REGISTERED
TRADEMARK) TARGET
PORTFOLIO, 2(ND) QUARTER
2000 SERIES
________________________
Amount
per Unit
______
<S> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge 2.75% $.275
====== ======
Initial sales charge (paid at the time of purchase) 1.00%(a) $.100
Deferred sales charge (paid in installments or at redemption) 1.75%(b) .175
Maximum sales charge imposed on reinvested dividends 1.75%(c) $.175
====== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .190%(d) $.0190
====== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .060% $.0060
Creation and development fee .250% .0249
Trustee's fee and other operating expenses .181%(e) .0180
______ ______
Total .491% $.0489
====== ======
</TABLE>
Page 4
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and then sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
European Target 20 Portfolio, 2 (nd)Quarter 2000 Series $353 $874 $1,420 $2,908
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series 335 820 1,330 2,729
Value Line(registered trademark) Target Portfolio,
2(nd) Quarter 2000 Series 343 843 1,369 2,808
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you pay only the deferred sales
charge. The example does not reflect sales charges on reinvested
dividends and other distributions. If these sales charges were included,
your costs would be higher.
_____________
<FN>
(a) The initial sales charge is the difference between the maximum sales
charge (2.75% of the Public Offering Price) and any remaining deferred
sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.175 per
Unit which, as a percentage of the Public Offering Price, will vary over
time. The deferred sales charge will be deducted in ten monthly
installments commencing July 20, 2000.
(c) Estimated organization costs will be deducted from the assets of a
Trust at the end of the initial offering period.
(d) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. Each Trust will be assessed this amount at
the end of the initial offering period and will pay the Sponsor at such
time. The creation and development fee is based on the net asset value
of a Trust at the end of the initial offering period. In connection with
the creation and development fee, in no event will the Sponsor collect
more than .75% of a Unit holder's initial investment.
(e) Other operating expenses for the Value Line(registered trademark)
Target Portfolio include estimated per Unit costs associated with a
license fee as described in "Expenses and Charges," but do not include
brokerage costs and other portfolio transaction fees for any of the
Trusts. In certain circumstances the Trusts may incur additional
expenses not set forth above. See "Expenses and Charges."
</FN>
</TABLE>
Page 5
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 414
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 414, comprised of the European Target 20
Portfolio, 2(nd) Quarter 2000 Series; the Target Small-Cap Portfolio,
2(nd) Quarter 2000 Series; and Value Line(registered trademark) Target
Portfolio, 2(nd) Quarter 2000 Series as of the opening of business on
March 31, 2000. These statements of net assets are the responsibility of
the Trusts' Sponsor. Our responsibility is to express an opinion on
these statements of net assets based on our audit.
We conducted our audit in accordance with 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
statements of net assets are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of net assets. Our procedures included
confirmation of the letter of credit allocated among the Trusts on March
31, 2000. An audit also includes assessing the accounting principles
used and significant estimates made by the Sponsor, as well as
evaluating the overall presentation of the statements of net assets. We
believe that our audit of the statements of net assets provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 414,
comprised of the European Target 20 Portfolio; 2(nd) Quarter 2000
Series, the Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series; and
Value Line(registered trademark) Target Portfolio, 2(nd) Quarter 2000
Series at the opening of business on March 31, 2000 in conformity with
accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
March 31, 2000
Page 6
Statements of Net Assets
FT 414
At the Opening of Business on the
Initial Date of Deposit-March 31, 2000
<TABLE>
<CAPTION>
Value Line
(registered
European Target 20 Target Small-Cap trademark)
Portfolio Portfolio Target Portfolio
2(nd) Quarter 2(nd) Quarter 2(nd) Quarter
2000 Series 2000 Series 2000 Series
_____________ ______________ ________________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) $148,598 $148,562 $148,810
(2)
Less liability for reimbursement to Sponsor for organization (398) (315) (286)
costs (3)
Less liability for deferred sales charge (4) (2,627) (2,626) (2,630)
________ _________ ________
Net assets $145,573 $145,621 $145,894
======== ========= ========
Units outstanding 15,010 15,006 15,031
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,099 $150,063 $150,314
Less maximum sales charge (5) (4,128) (4,127) (4,134)
Less estimated reimbursement to Sponsor
for organization costs (3) (398) (315) (286)
________ ________ ________
Net assets $145,573 $145,621 $145,894
======== ======== ========
__________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $600,000 will be allocated between the three Trusts in FT 414,
has been deposited with the Trustee as collateral, covering the monies
necessary for the purchase of the Securities according to their purchase
contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $.0265,
$.0210 and $.0190 per Unit for the European Target 20 Portfolio, 2(nd)
Quarter 2000 Series, the Target Small-Cap Portfolio, 2(nd) Quarter 2000
Series and Value Line(registered trademark) Target Portfolio, 2(nd)
Quarter 2000 Series, respectively. A payment will be made at the end of
the initial offering period to an account maintained by the Trustee from
which the obligation of the investors to the Sponsor will be satisfied.
To the extent that actual organization costs of a Trust are greater than
the estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.175 per Unit), payable to us in ten equal
monthly installments beginning on July 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) through April 20, 2001. If you redeem Units
before April 20, 2001 you will have to pay the remaining amount of the
deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors in a Trust includes a maximum sales
charge (comprised of an initial and a deferred sales charge) computed at
the rate of 2.75% of the Public Offering Price (equivalent to 2.778% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge as set forth under "Public
Offering."
</FN>
</TABLE>
Page 7
Schedule of Investments
European Target 20 Portfolio, 2(nd) Quarter 2000 Series
FT 414
At the Opening of Business on the
Initial Date of Deposit-March 31, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Offering Value Securities to Dividend
Shares Name of Issuer of Securities (1) Price per Share the Trust (2) Yield (3)
______ _______________________________________ _________ _________ _____________ _________
<C> <S> <C> <C> <C> <C>
335 ABN AMRO Holding NV 5% $ 22.188 $ 7,433 3.45%
563 Abbey National Plc 5% 13.191 7,427 5.40%
1,332 BG Group Plc 5% 5.575 7,426 2.92%
275 Barclays Plc 5% 26.989 7,422 3.28%
165 Bayer AG 5% 45.007 7,426 2.93%
531 CGU Plc 5% 13.973 7,419 4.82%
113 DaimlerChrysler AG 5% 65.647 7,418 4.89%
995 Diageo Plc 5% 7.461 7,423 4.77%
1,521 ENI SpA 5% 4.883 7,427 3.54%
678 Halifax Group Plc 5% 10.944 7,420 3.88%
262 Hoechst AG 5% 28.380 7,436 2.93%
138 ING Groep N.V. 5% 53.856 7,432 2.89%
736 Lloyds TSB Group Plc 5% 10.083 7,421 4.67%
206 RWE AG 5% 36.120 7,441 3.78%
481 Rio Tinto Plc 5% 15.423 7,419 3.93%
525 San Paolo-IMI SpA 5% 14.142 7,425 3.49%
938 Shell Transport & Trading Company Plc 5% 7.915 7,424 3.13%
39 Societe Generale 5% 190.158 7,416 4.67%
29 UBS AG 5% 259.335 7,521 2.55%
1,200 Unilever Plc 5% 6.185 7,422 3.58%
_____ ________
Total Investments 100% $148,598
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 10.
</FN>
</TABLE>
Page 8
Schedule of Investments
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series
FT 414
At the Opening of Business on the Initial Date of Deposit-March 31, 2000
<TABLE>
<CAPTION>
Number Percentage Market Cost of
of Ticker Symbol and of Aggregate Value per Securities to
Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _______________________________________ ____________ ________ _____________
<C> <S> <C> <C> <C>
146 ACTL Actel Corporation 2.70% $27.500 $ 4,015
125 AXTI American Xtal Technology, Inc. 2.54% 30.188 3,774
152 BWC Belden Inc. 2.85% 27.813 4,228
210 CERN Cerner Corporation 3.69% 26.125 5,486
631 CHRS Charming Shoppes, Inc. 2.50% 5.875 3,707
116 CAKE The Cheesecake Factory Incorporated 3.05% 39.000 4,524
197 CHRZ Computer Horizons Corp. 2.24% 16.875 3,324
118 CPWM Cost Plus, Inc. 2.54% 32.000 3,776
271 XTO Cross Timbers Oil Company 2.38% 13.063 3,540
76 DRC Dain Rauscher Corporation 3.35% 65.438 4,973
128 ELK Elcor Corporation 3.03% 35.125 4,496
144 FCGI First Consulting Group, Inc. 1.61% 16.625 2,394
105 HAR Harman International Industries, Incorporated 4.02% 56.875 5,972
61 HIFN hi/fn, inc. 2.51% 61.000 3,721
215 IINT Indus International, Inc. 1.17% 8.063 1,734
144 NSIT Insight Enterprises, Inc. 3.69% 38.063 5,481
150 INSUA Insituform Technologies, Inc. (Class A) 2.99% 29.625 4,444
172 INTL Inter-Tel, Incorporated 2.89% 25.000 4,300
110 JAKK JAKKS Pacific, Inc. 1.46% 19.750 2,173
182 KMT Kennametal Inc. 3.45% 28.188 5,130
75 KRON Kronos Incorporated 2.10% 41.625 3,122
59 LSTR Landstar System, Inc. 2.07% 52.125 3,075
66 METG META Group, Inc. 1.16% 26.063 1,720
71 MINI Mobile Mini, Inc. 0.91% 19.000 1,349
113 NDB National Discount Brokers Group, Inc. 3.84% 50.500 5,706
64 ASGN On Assignment, Inc. 1.90% 44.188 2,828
169 PSUN Pacific Sunwear of California, Inc. 4.21% 37.000 6,253
172 POWI Power Integrations, Inc. 2.63% 22.750 3,913
102 PHCC Priority Healthcare Corporation (Class B) 3.30% 48.125 4,909
87 PRHC Province Healthcare Company 1.80% 30.750 2,675
39 SBSE SBS Technologies, Inc. 0.77% 29.438 1,148
119 BTOB SierraCities.com Inc. 1.07% 13.375 1,592
107 SORC The Source Information Management Company 1.28% 17.750 1,899
70 SWS Southwest Securities Group, Inc. 2.10% 44.500 3,115
88 SRCL Stericycle, Inc. 1.36% 23.000 2,024
111 SGY Stone Energy Corporation 3.76% 50.375 5,592
156 TTWO Take-Two Interactive Software, Inc. 1.31% 12.438 1,940
250 WATR Tetra Tech, Inc. 3.94% 23.438 5,859
92 TBL The Timberland Company (Class A) 3.30% 53.250 4,899
187 VICR Vicor Corporation 2.53% 20.063 3,752
_______ _________
Total Investments 100% $148,562
======= =========
___________
<FN>
See "Notes to Schedules of Investments" on page 10.
</FN>
</TABLE>
Page 9
Schedule of Investments
Value Line(registered trademark) Target Portfolio, 2(nd) Quarter 2000
Series
FT 414
At the Opening of Business on the
Initial Date of Deposit-March 31, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value Securities to
Shares Name of Issuer of Securities (1) Price per Share the Trust (2)
______ _______________________________________ _________ _________ _____________
<C> <S> <C> <C> <C>
21 AVX AVX Corporation 1.05% $ 74.250 $ 1,559
24 ADBE Adobe Systems Incorporated 1.73% 107.188 2,573
77 ADI Analog Devices, Inc. 3.99% 77.063 5,934
158 AMAT Applied Materials, Inc. 9.86% 92.875 14,674
135 BCE BCE Inc. (4) 11.15% 122.938 16,597
33 CY Cypress Semiconductor Corporation 1.01% 45.500 1,502
29 ESIO Electro Scientific Industries, Inc. 1.02% 52.125 1,512
42 GMST Gemstar International Group Limited 2.26% 80.000 3,360
38 IDTI Integrated Device Technology, Inc. 1.00% 39.250 1,492
59 IVX IVAX Corporation 1.01% 25.375 1,497
49 JMED Jones Pharma Incorporated 1.02% 30.938 1,516
65 LSI LSI Logic Corporation 2.85% 65.313 4,245
15 MCRL Micrel, Incorporated 1.03% 102.313 1,535
69 NTAP Network Appliance, Inc. 3.70% 79.750 5,503
473 ORCL Oracle Corporation 24.93% 78.438 37,101
41 PEB PE Corp.-PE Biosystems Group 2.24% 81.500 3,341
30 PMCS PMC-Sierra, Inc. (4) 3.49% 173.250 5,197
28 QLGC QLogic Corporation 2.35% 125.063 3,502
150 QCOM QUALCOMM Incorporated 14.64% 145.250 21,787
32 SCI SCI Systems, Inc. 1.02% 47.500 1,520
14 SDLI SDL, Inc. 1.80% 191.250 2,677
38 SEBL Siebel Systems, Inc. 2.92% 114.500 4,351
21 SYMC Symantec Corporation 1.02% 72.000 1,512
35 TER Teradyne, Inc. 1.88% 79.750 2,791
32 TTN The Titan Corporation 1.03% 47.875 1,532
_______ ________
Total Investments 100% $148,810
======= ========
____________
<FN>
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on March 31, 2000. Each Trust has a Mandatory Termination
Date of June 29, 2001.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the Securities on the
applicable exchange (where applicable, converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the
Evaluation Time on March 30, 2000, the business day prior to 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
Page 10
and our loss (which is the difference between the cost of the
Securities to us and the cost of the Securities to a Trust) are set
forth below:
Cost of
Securities Profit
to Sponsor (Loss)
___________ ______
European Target 20 Portfolio, 2(nd) Quarter 2000 Series $150,484 $(1,886)
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series 148,860 (298)
Value Line(registered trademark) Target Portfolio, 2nd Quarter 2000 Series 152,749 (3,939)
(3) Current Dividend Yield for each Security was calculated by dividing
the most recent annualized ordinary dividend paid on a Security by that
Security's closing sale price at the Evaluation Time on the business day
prior to the Initial Date of Deposit.
(4) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
</FN>
</TABLE>
Page 11
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
414, consists of three separate portfolios set forth below:
- - European Target 20 Portfolio
- - Target Small-Cap Portfolio
- - Value Line(registered trademark)) Target Portfolio
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
Mandatory Termination Date.
The Trusts will terminate on the Mandatory Termination Date set forth in
"Summary of Essential Information." Each Trust was created under the
laws of the State of New York by a Trust Agreement (the "Indenture")
dated the Initial Date of Deposit. This agreement, entered into among
Nike Securities L.P., as Sponsor, The Chase Manhattan Bank as Trustee
and First Trust Advisors L.P. as Portfolio Supervisor and Evaluator,
governs the operation of the Trusts.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited portfolios of common stocks
with the Trustee and in turn, the Trustee delivered documents to us
representing our ownership of the Trusts in the form of units ("Units").
With our deposit of Securities on the Initial Date of Deposit we
established a percentage relationship among the Securities in each
Trust's portfolio, as stated under "Schedule of Investments" for each
Trust. After the Initial Date of Deposit, we may deposit additional
Securities in a Trust, or cash (including a letter of credit) with
instructions to buy more Securities, to create new Units for sale. If we
create additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit, and not the percentage relationship
existing on the day we are creating new Units, since the two may differ.
This difference may be due to the sale, redemption or liquidation of any
of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in a 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 a Trust. If we
deposit cash, you and new investors may experience a dilution of your
investment. This is because prices of Securities will fluctuate between
the time of the cash deposit and the purchase of the Securities, and
because the Trusts pay the associated brokerage fees. To reduce this
dilution, the Trusts will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for a
Trust to buy Securities. If we or an affiliate of ours act as agent to a
Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in a 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 a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Page 12
Portfolios
Objectives.
When you invest in a Trust you are purchasing a quality portfolio of
attractive common stocks in one convenient purchase. Because the Trusts'
lives are short (approximately 15 months), we cannot guarantee that a
Trust will achieve its objective or that a Trust will make money once
expenses are deducted.
Each Trust's investment objective is to provide an above-average total
return. The European Target 20 Portfolio, 2(nd) Quarter 2000 Series
seeks to meet its objective through a combination of capital
appreciation and dividend income, while the Target Small-Cap Portfolio,
2(nd) Quarter 2000 Series and the Value Line(registered trademark))
Target Portfolio, 2 nd(nd) Quarter 2000 Series each seek their objective
through capital appreciation. As discussed below, each Trust follows a
different investment strategy to meet its objective.
Portfolio Strategies.
European Target 20 Portfolio Strategy.
The European Target 20 Portfolio invests in stocks with high dividend
yields. Investing in stocks with high dividend yields may be effective
in achieving the Trust's investment objective, because regular dividends
are common for established companies, and dividends have historically
accounted for a large portion of the total return on stocks. The
European Target 20 Portfolio is determined as follows:
Step 1: We rank the 120 largest companies based on market capitalization
which are headquartered in Austria, Belgium, Denmark, Finland, Germany,
Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland or the United Kingdom by dividend yield as of five
business days prior to the date of this prospectus.
Step 2: We select the 20 highest dividend-yielding stocks for the
European Target 20 Portfolio.
Target Small-Cap Portfolio Strategy.
The Target Small-Cap Portfolio invests in stocks with small market
capitalizations which have recently exhibited certain positive financial
attributes. The Target Small-Cap Portfolio is determined as follows:
Step 1: We select the stocks of all U.S. corporations which trade on the
NYSE, the American Stock Exchange ("AMEX") or The Nasdaq Stock Market
("Nasdaq") (excluding limited partnerships, American Depositary Receipts
and mineral and oil royalty trusts) as of two business days prior to the
date of this prospectus.
Step 2: We then select companies which have a market capitalization of
between $150 million and $1 billion and whose stock has an average daily
dollar trading volume of at least $500,000.
Step 3: We next select stocks with positive three-year sales growth.
Step 4: From there we select those stocks whose most recent annual
earnings are positive.
Step 5: We eliminate any stock whose price has appreciated by more than
75% in the last 12 months.
Step 6: We select the 40 stocks with the greatest price appreciation in
the last 12 months on a relative market capitalization basis (highest to
lowest) for the Target Small-Cap Portfolio.
For purposes of applying the Target Small-Cap Strategy, market
capitalization and average trading volume are based on 1996 dollars
which are periodically adjusted for inflation. All steps apply monthly
and rolling quarterly data instead of annual figures where possible.
Companies which, based on publicly available information as of two
business days prior to the date of this prospectus, are the subject of
an announced business combination which we expect will happen within six
months of date of this prospectus have been excluded from the Target
Small-Cap Strategy Portfolio.
Value Line(registered trademark) Target Portfolio Strategy.
The Value Line(registered trademark) Target Portfolio invests in 25 of
the 100 stocks that Value Line(registered trademark) gives a #1 ranking
for Timeliness(TM) which have recently exhibited certain positive
financial attributes. Value Line(registered trademark) ranks 1,700
stocks which represent approximately 94% of the trading volume on all
U.S. stock exchanges. Of these 1,700 stocks, only 100 are given their #1
ranking for Timeliness(TM), which measures Value Line's view of their
probable price performance during the next six to 12 months relative to
the others. Value Line(registered trademark) bases their rankings on a
long-term trend of earnings, prices, recent earnings, price momentum,
and earnings surprise. The Value Line(registered trademark) Target
Page 13
Portfolio is determined as follows:
Step 1: We start with the 100 stocks which Value Line(registered
trademark) at the initial date of deposit gives their #1 ranking
for Timeliness(TM), remove the stocks of companies considered to
be securities related issuers, and apply the following screens as
of two business days prior to the date of this prospectus.
Step 2: We screen for consistent growth by ranking these remaining stocks
based on 12-month and 6-month price appreciation (best [1] to worst
[100]).
Step 3: We then screen for profitability by ranking the stocks by their
return on assets.
Step 4: Finally, we screen for value by ranking the stocks based on their
price to cash flow.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 25 stocks with the lowest sums for the Value
Line(registered trademark) Target Portfolio.
The stocks which comprise the Value Line(registered trademark) Target
Portfolio are weighted by market capitalization subject to the
restriction that no stock will comprise less than 1% or 25% or more of
the portfolio on the date of this prospectus. The Securities will be
adjusted on a proportionate basis to accommodate this constraint.
"Value Line," "The Value Line Investment Survey," and "Value Line
Timeliness(TM) Ranking System" are registered trademarks of Value Line
Securities, Inc. or Value Line Publishing, Inc. that have been licensed
to Nike Securities L.P. The Value Line(registered trademark) Target
Portfolio is not sponsored, recommended, sold or promoted by Value Line
Publishing, Inc. Value Line, Inc. or Value Line Securities, Inc. ("Value
Line"). Value Line makes no representation regarding the advisability of
investing in the Trust.
Value Line, as well as the publishers of the MSCI Europe Index, Ibbotson
Small-Cap Index and the S&P 500 Index, are not affiliated with us and
have not participated in creating the Trusts or selecting the Securities
for the Trusts. Except as noted above none of the index publishers have
given us a license to use their index nor have they approved of any of
the information in this prospectus.
Please note that we applied each strategy which makes up the portfolio
for each Trust at a particular time. If we create additional Units of a
Trust after the Initial Date of Deposit we will deposit the Securities
originally selected by applying the strategy at such time. This is true
even if a later application of a strategy would have resulted in the
selection of different securities.
Risk Factors
Price Volatility. The European Target 20 Portfolio, 2(nd) Quarter 2000
Series invests in the common stock of foreign companies, while the
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series and the Value
Line(registered trademark) Target Portfolio, 2 nd(nd) Quarter 2000
Series may invest in the common stock of both domestic and foreign
companies. The value of a Trust's Units will fluctuate with changes in
the value of these common stocks. Common stock prices fluctuate for
several reasons including changes in investors' perceptions of the
financial condition of an issuer or the general condition of the
relevant stock market, or when political or economic events affecting
the issuers occur.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time or
that you won't lose money. Units of the Trusts are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
The European Target 20 Portfolio, 2(nd) Quarter 2000 Series, which uses
dividend yield as a selection criteria, employs a contrarian strategy in
which the Securities selected share qualities that have caused them to
have lower share prices or higher dividend yields than other common
stocks in their peer group. There is no assurance that negative factors
affecting the share price or dividend yield of these Securities will be
overcome over the life of the Trust or that these Securities will
increase in value.
The Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series is
concentrated in Securities issued by companies with market
capitalizations of less than $1 billion. The share prices of these small-
cap companies are often more volatile than those of larger companies as
a result of several factors common to many such issuers, including
limited trading volumes, products or financial resources, management
inexperience and less publicly available information.
Page 14
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.
Strategy. Please note that we applied the strategies which make up the
portfolio for each Trust at a particular time. If we create additional
Units of a Trust after the Initial Date of Deposit we will deposit the
Securities originally selected by applying the strategy at such time.
This is true even if a later application of a strategy would have
resulted in the selection of different securities. There is no guarantee
the strategy or the investment objective of a Trust will be achieved.
The actual performance of the Trusts will be different than the
hypothetical returns of each Trust's comparative index. Because the
Trusts are unmanaged and follow a strategy, the Trustee will not buy or
sell Securities in the event a strategy is not achieving the desired
results.
Financial Institutions Industry. Because more than 25% of the European
Target 20 Portfolio is invested in common stocks of financial
institutions, this Trust is considered to be concentrated in the
financial institutions industry. A portfolio concentrated in a single
industry may present more risk than a portfolio diversified over several
industries. Financial institutions are especially subject to the adverse
effects of economic recession; volatile interest rates; portfolio
concentrations in geographic markets and in commercial and residential
real estate loans; and competition from new entrants in their fields of
business. In addition, financial institutions are extensively regulated
and may be adversely affected by increased or changing regulations.
Financial institutions face increased competition from nontraditional
lending sources as regulatory changes permit new entrants to offer
various financial products. Technological advances such as the Internet
allow these nontraditional lending sources to cut overhead and permit
the more efficient use of customer data.
Technology Industry. The Value Line(registered trademark)) Portfolio is
considered to be concentrated in technology stocks. 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.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
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 threatened litigation will have on the share prices of the
Securities.
Foreign Stocks. All of the Securities in the European Target 20
Portfolio, 2(nd) Quarter 2000 Series and certain of the Securities in
the Value Line(registered trademark) Target Portfolio, 2(nd) Quarter
2000 Series are issued by foreign companies, which makes the Trust
subject to more risks than if it invested solely in domestic common
stocks. Risks of foreign common stocks include higher brokerage costs;
different accounting standards; expropriation, nationalization or other
adverse political or economic developments; currency devaluations,
blockages or transfer restrictions; restrictions on foreign investments
and exchange of securities; inadequate financial information; lack of
liquidity of certain foreign markets; and less government supervision
and regulation of exchanges, brokers, and issuers in foreign countries.
The purchase and sale of the foreign Securities will generally occur
only in foreign securities markets. Although we do not believe that the
Trusts will have problems buying and selling these Securities, certain
of the factors stated above may make it impossible to buy or sell them
in a timely manner. Custody of certain of the Securities in the European
Target 20 Portfolio is maintained by Cedel Bank S.A., a global custody
and clearing institution which has entered into a sub-custodian
relationship with the Trustee.
United Kingdom. The European Target 20 Portfolio, 2(nd) Quarter 2000
Series is also considered to be concentrated in common stocks of U.K.
issuers. The United Kingdom is one of 15 members of the European Union
("EU") which was formed by the Maastricht Treaty on European Union. It
is expected that the Treaty will have the effect of eliminating most
Page 15
remaining trade barriers between the member nations and make Europe one
of the largest common markets in the world. However, the uncertain
implementation of the Treaty provisions and recent rapid political and
social change throughout Europe make the extent and nature of future
economic development in the United Kingdom and Europe and their effect
on Securities issued by U.K. issuers impossible to predict.
Unlike a majority of EU members, the United Kingdom did not convert its
currency to the new common European currency, the euro, on January 1,
1999. All companies with significant markets or operations in Europe
face strategic challenges as these entities adapt to a single currency.
The euro conversion may materially impact revenues, expenses or income;
increase competition; affect issuers' currency exchange rate risk and
derivatives exposure; cause issuers to increase spending on information
technology updates; and result in potentially adverse tax consequences.
We cannot predict when or if the United Kingdom will convert to the euro
or what impact the implementation of the euro throughout a majority of
EU countries will have on U.K. or European issuers.
Exchange Rates. Because securities of foreign issuers generally pay
dividends and trade in foreign currencies, the U.S. dollar value of
these Securities (and therefore Units of the Trusts) will vary with
fluctuations in foreign exchange rates. Most foreign currencies have
fluctuated widely in value against the U.S. dollar for various economic
and political reasons. The recent conversion by eleven of the fifteen EU
members of their national currencies to the euro could negatively impact
the market rate of exchange between such currencies (or the newly
created euro) and the U.S. dollar.
To determine the value of foreign Securities or their dividends, the
Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, these markets can be quite volatile, depending on the activity
of the large international commercial banks, various central banks,
large multi-national corporations, speculators and other buyers and
sellers of foreign currencies. Since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated
by the Evaluator may not reflect the amount the Trusts would receive, in
U.S. dollars, had the Trustee sold any particular currency in the market.
Hypothetical Performance Information
The following table compares hypothetical performance information for
the strategies employed by each Trust and the actual performance of the
Ibbotson Small-Cap Index, MSCI Europe Index and S&P 500 Index in each of
the full years listed below (and as of the most recent quarter).
These hypothetical returns should not be used to predict future
performance of the Trusts. Returns from a Trust will differ from its
strategy for several reasons, including the following:
- - Total Return figures shown do not reflect sales charges, commissions,
Trust expenses or taxes.
- - Strategy returns are for calendar years (and through the most recent
quarter), while the Trusts begin and end on various dates.
- - Trusts have a maturity longer than one year.
- - Trusts may not be fully invested at all times or equally weighted in
all stocks comprising a strategy.
- - Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- - For Trusts investing in foreign Securities, currency exchange rates
may differ.
You should note that the Trusts are not designed to parallel movements
in any index and it is not expected that they will do so. In fact, each
Trust's strategy underperformed its comparative index in certain years
and we cannot guarantee that a Trust will outperform its respective
index over the life of a Trust or over consecutive rollover periods, if
available. Each index differs widely in size and focus, as described
below.
Ibbotson Small-Cap Index. The Ibbotson Small-Cap Index is a market
capitalization weighted index of the ninth and tenth deciles of the New
York Stock Exchange, plus stocks listed on the American Stock Exchange
and over-the-counter with the same or less capitalization as the upper
bound of the NYSE ninth decile.
MSCI Europe Index. The MSCI Europe Index is an equity market
capitalization weighted index consisting of over 500 companies from all
of the developed markets in Europe.
S&P 500 Index. The S&P 500 Index consists of 500 stocks chosen by
Standard and Poor's to be representative of the leaders of various
industries.
Page 16
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN(2)
Hypothetical Strategy Total Returns(1) Index Total Returns
______________________________________ ___________________
Value Line
European Target (registered trademark) MSCI Ibbotson
Target 20 Small-Cap Target Europe Small-Cap S&P 500
Year Strategy Strategy Strategy Index Index Index
_____ ________ ________ _________ ______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
1972 12.66% 4.43%
1973 -25.02% -30.90%
1974 -34.85% -19.95%
1975 40.13% 52.82%
1976 45.70% 57.38%
1977 16.22% 25.38%
1978 17.53% 23.46%
1979 40.78% 43.46%
1980 61.97% 38.88%
1981 -9.46% 13.88%
1982 51.26% 28.01%
1983 31.04% 39.67%
1984 2.00% -1.10% 1.26% -6.67%
1985 79.54% 50.81% 31.91% 79.79% 24.66% 31.77%
1986 42.53% 23.35% 20.28% 44.46% 6.85% 18.31%
1987 14.86% 14.94% 17.06% 4.10% -9.30% 5.33%
1988 16.77% 23.19% -6.94% 16.35% 22.87% 16.64%
1989 33.09% 26.10% 48.06% 29.06% 10.18% 31.35%
1990 -0.49% 1.08% 8.32% -3.37% -21.56% -3.30%
1991 16.59% 59.55% 83.63% 13.66% 44.63% 30.40%
1992 -4.03% 27.81% -10.16% -4.25% 23.35% 7.62%
1993 37.38% 22.47% 25.18% 29.79% 20.98% 9.95%
1994 -0.51% 2.11% 13.79% 2.66% 3.11% 1.34%
1995 34.71% 41.65% 52.56% 22.13% 34.66% 37.22%
1996 24.35% 34.96% 54.77% 21.57% 17.62% 22.82%
1997 28.91% 16.66% 34.37% 24.20% 22.78% 33.21%
1998 35.77% 1.85% 92.41% 28.80% -7.38% 28.57%
1999 29.17% 12.88% 112.48% 14.12% 28.96% 20.94%
________________
<FN>
(1)The Strategy stocks for each Strategy for a given year consist of the
common stocks selected by applying the respective Strategy as of the
beginning of the period (and not the date the Trust actually sells Units).
(2)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 semi-annually and all returns are stated in
terms of U.S. dollars. Based on the year-by-year returns contained in
the table, over the full years as listed above, the European Target 20
Strategy, the Target Small-Cap Strategy and the Value Line(registered
trademark) Target Strategy achieved an average annual total return of
22.83%, 19.19% and 34.42%, respectively. In addition, over this period,
each individual strategy achieved a greater average annual total return
than that of its corresponding index, the MSCI Europe Index, the
Ibbotson Small-Cap Index and the S&P 500 Index which were 18.74%, 15.31%
and 18.82%, respectively.
</FN>
</TABLE>
Page 17
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;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The total sales charge (which combines an initial up-front sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities, changes in the
relevant currency exchange rates, changes in the applicable commissions,
stamp taxes, custodial fees and other costs associated with foreign
trading, and changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust portfolio, legal fees and
the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in a
Trust. Securities will be sold to reimburse the Sponsor for a Trust's
organization costs at the end of the initial offering period (a
significantly shorter time period than the life of the Trusts). During
the initial offering period, there may be a decrease in the value of the
Securities. To the extent the proceeds from the sale of these Securities
are insufficient to repay the Sponsor for Trust organization costs, the
Trustee will sell additional Securities to allow a Trust to fully
reimburse the Sponsor. In that event, the net asset value per Unit of a
Trust will be reduced by the amount of additional Securities sold.
Although the dollar amount of the reimbursement due to the Sponsor will
remain fixed and will never exceed the per Unit amount set forth for a
Trust in "Notes to Statements of Net Assets," this will result in a
greater effective cost per Unit to Unit holders for the reimbursement to
the Sponsor. To the extent actual organization costs are less than the
estimated amount, only the actual organization costs will be deducted
from the assets of a Trust. When Securities are sold to reimburse the
Sponsor for organization costs, the Trustee will sell Securities, to the
extent practicable, which will maintain the same proportionate
relationship among the Securities contained in a Trust as existed prior
to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is initially equal to approximately 1.00% of the Public
Offering Price of a Unit, but will vary with the purchase price of your
Unit. When the Public Offering Price exceeds $10.00 per Unit, the
initial sales charge will exceed 1.00% of the Public Offering Price.
This initial sales charge is actually the difference between the maximum
sales charge of 2.75% and the maximum remaining deferred sales charge
(initially $.175 per Unit) and will vary from 1.00% with changes in the
aggregate underlying value of the Securities, changes in the Income and
Capital Accounts and as deferred sales charge payments are made.
Monthly Deferred Sales Charge. In addition, ten monthly deferred sales
charges of $.0175 per Unit will be deducted from a Trust's assets on
approximately the twentieth day of each month from July 20, 2000 through
Page 18
April 20, 2001. If you buy Units at a price of less than $10.00 per
Unit, the dollar amount of the deferred sales charge will not change,
but the deferred sales charge on a percentage basis will be more than
1.75% of the Public Offering Price.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below) the maximum sales charge is reduced, as
follows:
Your maximum
If you invest sales charge
(in thousands)* will be
_______________ ____________
$50 but less than $100 2.50%
$100 but less than $150 2.25%
$150 but less than $500 1.90%
$500 but less than $1,000 1.75%
$1,000 or more 1.00%
*Breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trusts in this prospectus with any other same day purchases of
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the party
making the sale.
If you commit to purchase Units of the Trusts, or subsequent series of
the Trusts, valued at $1,000,000 or more over a 12-month period,
commencing with your first purchase you will receive the reduced sales
charge set forth above on all individual purchases over $83,000.
If you purchase Units with rollover proceeds from a previous series of a
Trust, you will be subject only to the maximum deferred sales charge on
such Units (for rollover purchases of $1,000,000 or more, the charge
will be a deferred sales charge limited to 1.00% of the Public Offering
Price), but you will not be eligible to receive the reduced sales
charges described in the above table. In addition, you can use
termination proceeds from other unit investments trusts with a similar
strategy as a Trust, or redemption or termination proceeds from any unit
investment trust we sponsor, to purchase Units of the Trusts subject
only to any remaining deferred sales charge. Please note that you will
be charged the amount of any remaining deferred sales charge on Units
you redeem when you redeem them.
The following persons may purchase Units at the Public Offering Price
less the applicable dealer concession:
- - Employees, officers and directors of the Sponsor, our related
companies, dealers and their affiliates, and vendors providing services
to us.
- - Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-
law, and trustees, custodians or fiduciaries for the benefit of such
persons).
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
a Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
If you purchase Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these services as part of an investment account where a comprehensive
"wrap fee" charge is imposed, your Units will only be assessed that
portion of the sales charge retained by the Sponsor, .5% of the Public
Offering Price. This discount for "wrap fee" purchases is available
whether or not you purchase Units with the Wrap CUSIP. However, if you
purchase Units with the Wrap CUSIP, you should be aware that all
distributions of income and/or capital will be automatically reinvested
into additional Units of your Trust subject only to that portion of the
sales charge retained by the Sponsor. See "Distribution of Units-Dealer
Concessions."
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
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the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, you will be credited the difference
between your maximum sales charge and the maximum deferred sales charge
at the time you buy your Units.
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
The total value of the Securities in the European Target 20 Portfolio
during the initial offering period is computed on the basis of the
offering side value of the relevant currency exchange rate expressed in
U.S. dollars as of the Evaluation Time.
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. In
addition, during this period the aggregate underlying value of the
Securities is computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars as of the
Evaluation Time.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of 2.25% of the Public
Offering Price per Unit. However, this amount will be reduced to $0.13
per Unit on purchases by Rollover Unit holders or on the sale of Units
subject only to any remaining deferred sales charge. In addition,
dealers and other selling agents will receive a maximum concession of up
to $0.10 per Unit on purchases of Units resulting from the automatic
reinvestment of income or capital distributions into additional Units.
Dealers and other selling agents who sell Units of a Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total sales per Trust Additional
(in millions) Concession
_____________________ __________
$1 but less than $3 0.050%
$3 but less than $5 0.100%
$5 or more 0.150%
Dealers and other selling agents who, during any consecutive 12-month
period, sell at least $2 billion worth of primary market units of unit
investment trusts sponsored by us will receive a concession of $30,000
in the month following the achievement of this level. We reserve the
right to change the amount of concessions or agency commissions from
time to time. 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
Page 20
us any concession or agency commission relating to the reacquired Units.
Certain commercial banks may be making Units of the Trusts available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is kept by or given to the banks in the amounts shown
above.
Award Programs.
From time to time we may sponsor programs which provide awards to our
dealers' registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of a Trust (which
may show performance net of the expenses and charges a 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 indices, corporate or U.S. Government bonds, bank CDs and money
market accounts or funds, (2) performance data from Morningstar
Publications, Inc. or (3) information from publications such as Money,
The New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. The investment characteristics of each Trust differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of a Trust's future performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit for each Trust less any reduced sales charge as stated
in "Public Offering." Also, any difference between our cost to purchase
the Securities and the price at which we sell them to a Trust is
considered a profit or loss (see Note 2 of "Notes to Schedules of
Investments"). During the initial offering period, dealers and others
may also realize profits or sustain losses as a result of fluctuations
in the Public Offering Price they receive when they sell the Units.
In maintaining a market for Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or
redeem your Units before you have paid the total deferred sales charge
on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trusts are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of the
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Trusts from the Income Account of a Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trusts and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trusts. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase
research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual 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 each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. Each Trust pays this "creation and development
fee" as a percentage of that Trust's net asset value at the end of the
initial offering period. In connection with the creation and development
fee, in no event will the Sponsor collect more than .75% 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 a Trust's operating expenses, and the fees described
above, the Trusts may also incur the following charges:
- - A quarterly license fee (which will fluctuate with a Trust's net asset
value) payable by the Value Line(registered trademark) Target Portfolio
for the use of certain trademarks and trade names of Value Line;
- - All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust;
- - Foreign custodial and transaction fees, if any; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
a 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 a Trust. If there is not enough cash in
the Income or Capital Accounts of a Trust, the Trustee has the power to
sell Securities in a Trust to make cash available to pay these charges
which may result in capital gains or losses to you. See "Tax Status."
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by a Trust, and as
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such you will be considered to have received a pro rata share of income
(i.e., dividends and capital gains, if any) from each Security when such
income is considered to be received by a Trust. This is true even if you
elect to have your distributions automatically reinvested into
additional Units. In addition, the income from the Trust which you must
take into account for federal income tax purposes is not reduced for
amounts used to pay a deferred sales charge.
Your Tax Basis and Income or Loss Upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units,
generally including sales charges, among each Security or other Trust
asset ratably according to their value on the date you purchase your
Units. In certain circumstances, however, you may have to adjust your
tax basis after you purchase your Units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and
profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The Tax Code may, however, treat certain capital gains
as ordinary income in special situations.
Rollovers.
If you elect to have your proceeds from a Trust rolled over into the
next series of such Trust, it is considered a sale for federal income
tax purposes, and any gain on the sale will be treated as a capital
gain, and any loss will be treated as a capital loss. However, any loss
you incur in connection with the exchange of your Units of a Trust for
units of the next series will generally be disallowed with respect to
this deemed sale and subsequent deemed repurchase, to the extent the
trusts have substantially identical Securities under the wash sale
provisions of the Internal Revenue Code.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") from the Target Small-Cap
Portfolio or the Value Line(registered trademark) Target Portfolio when
you redeem your Units or at the Trust's termination. If you request an
In-Kind Distribution you will be responsible for any expenses related to
this distribution. By electing to receive an In-Kind Distribution, you
will receive whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by the Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by such Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of a Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by a Trust that are treated as U.S. source income (e.g.,
dividends received on Securities of domestic corporations) will
generally be subject to U.S. income taxation and withholding in the case
of Units held by non-resident alien individuals, foreign corporations or
other non-U.S. persons, subject to any applicable treaty. However,
distributions by a Trust that are derived from dividends of Securities
of a foreign corporation and that are not effectively connected to your
Page 23
conduct of a trade or business within the United States will generally
not be subject to U.S. income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other U.S. persons, provided that less than 25 percent of the gross
income of the foreign corporation over the three-year period ending with
the close of the taxable year preceding payment was effectively
connected to the conduct of a trade or business within the United States.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trusts for:
- - Individual Retirement Accounts;
- - Keogh Plans;
- - Pension funds; and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with signature
guaranteed by an eligible institution. In certain cases the Trustee may
require additional documentation before they will transfer or redeem
your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- - A written initial transaction statement containing a description of
your Trust;
- - The number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
Page 24
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- - A summary of transactions in your Trust for the year;
- - Any Securities sold during the year and the Securities held at the end
of that year by your Trust;
- - The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- - Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of a Trust. All other receipts,
such as return of capital, are credited to the Capital Account of a
Trust. Dividends received on foreign Securities, if any, are converted
into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses, on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the sale of the Securities. However, if you own Units of the Target
Small-Cap Portfolio or the Value Line(registered trademark) Target
Portfolio, you may elect to receive an In-Kind Distribution as described
under "Amending or Terminating the Indenture." All Unit holders will
receive a pro rata share of any other assets remaining in their Trust,
after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of that Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Distributions on Units identified by the Wrap CUSIP will be
automatically reinvested into additional Units of your Trust. Each later
distribution of income and/or capital on your Units will be reinvested
by the Trustee into additional Units of your Trust. You will have to pay
any remaining deferred sales charge on any Units acquired pursuant to
this distribution reinvestment option. This option may not be available
in all states. PLEASE NOTE THAT EVEN IF YOU REINVEST DISTRIBUTIONS,
THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
Page 25
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust 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 of a Trust. The IRS
will require the Trustee to withhold a portion of your redemption
proceeds if the Trustee does not have your TIN as generally discussed
under "Income and Capital Distributions."
If you tender 1,000 Units or more of the Target Small-Cap Portfolio or
the Value Line(registered trademark) Target Portfolio for redemption,
rather than receiving cash, you may elect to receive an In-Kind
Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to a Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities of a Trust to make funds available for
redemption. If Securities are sold, the size and diversification of a
Trust will be reduced. These sales may result in lower prices than if
the Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in that 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 such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of such Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, during 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
Each Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When each Trust is
Page 26
about to terminate, you may have the option to roll your proceeds into
the next series of a Trust (the "New Trusts") if one is available. We
intend to create the New Trusts in conjunction with the termination of
the Trusts and plan to apply the same strategy we used to select the
portfolio for the Trusts to the New Trusts.
If you wish to have the proceeds from your Units rolled into a New Trust
you must notify the Trustee in writing of your election by the Rollover
Notification Date stated in the "Summary of Essential Information." As a
Rollover Unit holder, your Units will be redeemed and the underlying
Securities sold by the Trustee, in its capacity as Distribution Agent,
during the Special Redemption and Liquidation Period. 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 a 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 (currently expected to be $.175 per unit).
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in a 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 a New Trust may not be fully invested on the next
business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." If you elect not to
participate as a Rollover Unit holder ("Remaining Unit holders"), you
will not incur capital gains or losses due to the Special Redemption and
Liquidation, nor will you be charged any additional sales charge. We may
modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations;
- - 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 a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of a Trust, will reject any offer for new or exchanged securities
or property in exchange for a Security, such as those acquired in a
merger or other transaction. If such exchanged securities or property
are nevertheless acquired by a Trust, at our instruction they will
either be sold or held in such Trust. In making the determination as to
whether to sell or hold the exchanged securities or property we may get
advice from the Portfolio Supervisor. Any proceeds received from the
sale of Securities, exchanged securities or property will be credited to
the Capital Account of a Trust for distribution to Unit holders or to
Page 27
meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trusts to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us, or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of Units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trusts' portfolio
transactions, or when acting as agent for the Trusts in acquiring or
selling Securities on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date. A 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 such Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of a Trust
before the Mandatory Termination Date for any other stated reason will
result in all remaining unpaid deferred sales charges on your Units
being deducted from your termination proceeds. For various reasons,
including Unit holders' participation as Rollover Unit holders, a Trust
may be reduced below the Discretionary Liquidation Amount and could
therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of the Target Small-Cap Portfolio or the
Value Line(registered trademark) Target Portfolio, the Trustee will send
you a form at least 30 days prior to the Mandatory Termination Date
which will enable you to receive an In-Kind Distribution of Securities
(reduced by customary transfer and registration charges) rather than the
typical cash distribution. You must notify the Trustee at least ten
business days prior to the Mandatory Termination Date if you elect this
In-Kind Distribution option. If you do not elect to participate in
either the Rollover Option or the In-Kind Distribution option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after your Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from a 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 28
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $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 Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts 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 Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- - Terminate the Indenture and liquidate the 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 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,
Page 29
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 30
This page is intentionally left blank.
Page 31
FIRST TRUST (registered trademark)
European Target 20 Portfolio, 2(nd) Quarter 2000 Series
Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series
Value Line(registered trademark) Target Portfolio, 2(nd) Quarter 2000 Series
FT 414
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trusts 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 above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- - Securities Act of 1933 (file no. 333-31112) and
- - Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes 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 Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: [email protected]
March 31, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 32
First Trust (registered trademark)
TARGET PORTFOLIO SERIES
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in Target Portfolio Series not found in the prospectus for the
Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should
consider before investing in a Trust. This Information Supplement should
be read in conjunction with the prospectus for the Trust in which an
investor is considering investing.
This Information Supplement is dated March 31, 2000. Capitalized terms
have been defined in the prospectus.
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Value Line Publishing, Inc. 1
Risk Factors
Securities 2
Dividends 2
Foreign Issuers 2
United Kingdom 3
Exchange Rate 4
Concentrations
Banks and Thrifts 7
Small-Cap Companies 8
Technology Companies 9
Portfolios
Equity Securities Selected for European Target 20 Portfolio, 2(nd) Quarter 2000 Series 10
Equity Securities Selected for Target Small-Cap Portfolio, 2(nd) Quarter 2000 Series 11
Equity Securities Selected for Value Line(registered trademark) Target Portfolio, 2(nd) Quarter 2000 Series 13
</TABLE>
Value Line Publishing, Inc.
Value Line Publishing, Inc.'s ("VLPI") only relationship to Nike is
VLPI's licensing to Nike of certain VLPI trademarks and trade names and
the Value Line(registered trademark) Timeliness(TM) Ranking System (the
"System"), which is composed by VLPI without regard to Nike, this
Product or any investor. VLPI has no obligation to take the needs of
Nike or any investor in the Product into consideration in composing the
System. The Product results may differ from the hypothetical or
published results of the Value Line(registered trademark) Timeliness(TM)
Ranking System. VLPI is not responsible for and has not participated in
the determination of the prices and composition of the Product or the
timing of the issuance for sale of the Product or in the calculation of
the equations by which the Product is to be converted into cash.
VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING
FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND
VLPI MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS
THAT MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS
GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY
REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES
NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED
FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION
WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II)
FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY
INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND
Page 1
IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER
CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY
DAMAGES IN CONNECTION WITH THE PRODUCT.
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. From September
30, 1997 through October 30, 1997, amid record trading volume, the S&P
500 Index, DJIA, FT Index and Hang Seng Index declined 4.60%, 7.09%,
6.19% and 31.14%, respectively. In addition, against a backdrop of
continued uncertainty regarding the current global currency crisis and
falling commodity prices, during the period between July 31, 1998 and
September 30, 1998, the S&P 500, DJIA and FT Index declined by 8.97%,
11.32% and 17.80%, respectively, while the Hang Seng Index increased .20%.
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. Shareholders of common stocks of the type held
by the Trusts have a right to receive dividends only when and if, and in
the amounts, declared by the issuer's board of directors and have a
right to participate in amounts available for distribution by the issuer
only after all other claims on the issuer have been paid or provided
for. 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.
Cumulative preferred stock dividends must be paid before common stock
dividends, and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred
stock. Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Foreign Issuers. Since all of the Securities included in the European
Target 20 Portfolio and certain of the Securities in the Value
Line(registered trademark) Target Portfolio consist of securities of
foreign issuers, an investment in these Trusts involves certain
investment risks that are different in some respects from an investment
in a trust which invests entirely in the securities of domestic issuers.
These investment risks include future political or governmental
restrictions which might adversely affect the payment or receipt of
payment of dividends on the relevant Securities, the possibility that
the financial condition of the issuers of the Securities may become
impaired or that the general condition of the relevant stock market may
worsen (both of which would contribute directly to a decrease in the
value of the Securities and thus in the value of the Units), the limited
liquidity and relatively small market capitalization of the relevant
securities market, expropriation or confiscatory taxation, economic
uncertainties and foreign currency devaluations and fluctuations. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. The securities of
many foreign issuers are less liquid and their prices more volatile than
securities of comparable domestic issuers. In addition, fixed brokerage
commissions and other transaction costs on foreign securities exchanges
are generally higher than in the United States and there is generally
less government supervision and regulation of exchanges, brokers and
Page 2
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
such 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. See "Exchange Rate" below.
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 such 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 such 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 such Trust to satisfy their 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 a 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 a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by a
Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the Trusts will encounter
obstacles in disposing of the Securities, investors should realize that
the Securities may be traded in foreign countries where the securities
markets are not as developed or efficient and may not be as liquid as
those in the United States. The value of the Securities will be
adversely affected if trading markets for the Securities are limited or
absent.
United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and makes a
significant contribution to the country's balance of payments. The
portfolios of the Trusts may contain common stocks of British companies
engaged in such industries as banking, chemicals, building and
construction, transportation, telecommunications and insurance. Many of
these industries may be subject to government regulation, which may have
a materially adverse effect on the performance of their stock. In the
first quarter of 1998, gross domestic product (GDP) of the United
Kingdom grew to a level 3.0% higher than in the first quarter of 1997,
however the overall rate of GDP growth has slowed since the third
quarter of 1997. The slow down largely reflects a deteriorating trade
position and higher indirect taxes. The average quarterly rate of GDP
growth in the United Kingdom (as well as in Europe generally) has been
decelerating since 1994. The United Kingdom is a member of the European
Union (the "EU") which was created through the formation of the
Maastricht Treaty on European Union in late 1993. It is expected that
the Treaty will have the effect of eliminating most remaining trade
barriers between the 15 member nations and make Europe one of the
largest common markets in the world. However, the effective
implementation of the Treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of
Securities issued by United Kingdom companies impossible to predict.
A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in this conversion on January 1, 1999
and the Sponsor is unable to predict if or when the United Kingdom will
convert to the euro. Moreover, it is not possible to accurately predict
the effect of the current political and economic situation upon long-
term inflation and balance of trade cycles and how these changes, as
well as the implementation of a common currency throughout a majority of
EU countries, would affect the currency exchange rate between the U.S.
Page 3
dollar and the British pound sterling. In addition, United Kingdom
companies with significant markets or operations in other European
countries (whether or not such countries are participating) face
strategic challenges as these entities adapt to a single trans-national
currency. The euro conversion may have a material impact on revenues,
expenses or income from operations; increase competition due to the
increased price transparency of EU markets; affect issuers' currency
exchange rate risk and derivatives exposure; disrupt current contracts;
cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax
consequences. The Sponsor is unable to predict what impact, if any, the
euro conversion will have on any of the Securities issued by United
Kingdom companies in the Trusts.
Exchange Rate. The European Target 20 Portfolio is comprised totally of
Securities that are principally traded in foreign currencies and as
such, involve investment risks that are substantially different from an
investment in a fund which invests in securities that are principally
traded in United States dollars. The United States dollar value of the
portfolio (and hence of the Units) and of the distributions from the
portfolio will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies. Most foreign
currencies have fluctuated widely in value against the United States
dollar for many reasons, including supply and demand of the respective
currency, the rate of inflation in the respective economies compared to
the United States, the impact of interest rate differentials between
different currencies on the movement of foreign currency rates, the
balance of imports and exports goods and services, the soundness of the
world economy and the strength of the respective economy as compared to
the economies of the United States and other countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of
fixed exchange rates and the convertibility of the United States dollar
into gold through foreign central banks. Starting in 1971, growing
volatility in the foreign exchange markets caused the United States to
abandon gold convertibility and to effect a small devaluation of the
United States dollar. In 1973, the system of fixed exchange rates
between a number of the most important industrial countries of the
world, among them the United States and most Western European countries,
was completely abandoned. Subsequently, major industrialized countries
have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have
continued to "peg" their currencies to the United States dollar although
there has been some interest in recent years in "pegging" currencies to
"baskets" of other currencies or to a Special Drawing Right administered
by the International Monetary Fund. In Europe, the euro has been
developed. Currencies are generally traded by leading international
commercial banks and institutional investors (including corporate
treasurers, money managers, pension funds and insurance companies). From
time to time, central banks in a number of countries also are major
buyers and sellers of foreign currencies, mostly for the purpose of
preventing or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling and the euro:
Page 4
Foreign Exchange Rates
Range of Fluctuations in Foreign Currencies
United Kingdom
Annual Pound Sterling/
Period U.S. Dollar
_____ __________
1983 0.616-0.707
1984 0.670-0.864
1985 0.672-0.951
1986 0.643-0.726
1987 0.530-0.680
1988 0.525-0.601
1989 0.548-0.661
1990 0.504-0.627
1991 0.499-0.624
1992 0.499-0.667
1993 0.630-0.705
1994 0.610-0.684
1995 0.610-0.653
1996 0.583-0.670
1997 0.584-0.633
1998 0.584-0.620
1999 0.597-0.646
Source: Bloomberg L.P.
Page 5
<TABLE>
<CAPTION>
End of Month Exchange Rates End of Month Exchange Rates
for Foreign Currencies for Foreign Currencies (continued)
United Kingdom United Kingdom
Pound Sterling/ Euro/ Pound Sterling/ Euro/
Monthly Period U.S. Dollar U.S. Dollar Monthly Period U.S. Dollar U.S. Dollar
________ __________ ________ __________ __________ ______
<S> <C> <C> <C> <C> <C>
1992: February .653 N.A.
January .559 N.A. March .655 N.A.
February .569 N.A. April .664 N.A.
March .576 N.A. May .645 N.A.
April .563 N.A. June .644 N.A.
May .546 N.A. July .642 N.A.
June .525 N.A. August .639 N.A.
July .519 N.A. September .639 N.A.
August .503 N.A. October .615 N.A.
September .563 N.A. November .595 N.A.
October .641 N.A. December .583 N.A.
November .659 N.A. 1997:
December .662 N.A. January .624 N.A.
1993: February .614 N.A.
January .673 N.A. March .611 N.A.
February .701 N.A. April .616 N.A.
March .660 N.A. May .610 N.A.
April .635 N.A. June .600 N.A.
May .640 N.A. July .609 N.A.
June .671 N.A. August .622 N.A.
July .674 N.A. September .619 N.A.
August .670 N.A. October .598 N.A.
September .668 N.A. November .592 N.A.
October .676 N.A. December .607 N.A.
November .673 N.A. 1998:
December .677 N.A. January .613 N.A.
1994: February .609 N.A.
January .664 N.A. March .598 N.A.
February .673 N.A. April .598 N.A.
March .674 N.A. May .613 N.A.
April .659 N.A. June .600 N.A.
May .662 N.A. July .613 N.A.
June .648 N.A. August .595 N.A.
July .648 N.A. September .589 N.A.
August .652 N.A. October .596 N.A.
September .634 N.A. November .607 N.A.
October .611 N.A. December .602 N.A.
November .639 N.A. 1999:
December .639 N.A. January .608 1.136
1995: February .624 1.103
January .633 N.A. March .621 1.076
February .631 N.A. April .621 1.057
March .617 N.A. May .624 1.042
April .620 N.A. June .634 1.035
May .630 N.A. July .617 1.071
June .627 N.A. August .623 1.056
July .626 N.A. September .607 1.068
August .645 N.A. October .608 1.055
September .631 N.A. November .626 1.009
October .633 N.A. December .618 1.006
November .652 N.A. 2000:
December .645 N.A. January .619 .971
1996: February .633 .964
January .661 N.A. March 30 .627 .961
</TABLE>
Source: Bloomberg L.P.
Page 6
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the Trusts
would receive had the Trustee sold any particular currency in the
market. The foreign exchange transactions of the Trusts will be
conducted by the Trustee with foreign exchange dealers acting as
principals on a spot (i.e., cash) buying basis. Although foreign
exchange dealers trade on a net basis, they do realize a profit based
upon the difference between the price at which they are willing to buy a
particular currency (bid price) and the price at which they are willing
to sell the currency (offer price).
Concentrations
Banks and Thrifts. Certain Trusts may be considered to be concentrated
in common stocks of financial institutions. See "Risk Factors" in the
prospectus which will indicate, if applicable, a Trust's concentration
in this industry. Banks, thrifts and their holding companies are
especially subject to the adverse effects of economic recession,
volatile interest rates, portfolio concentrations in geographic markets
and in commercial and residential real estate loans, and competition
from new entrants in their fields of business. Banks and thrifts are
highly dependent on net interest margin. Recently, bank profits have
come under pressure as net interest margins have contracted, but volume
gains have been strong in both commercial and consumer products. There
is no certainty that such conditions will continue. Bank and thrift
institutions had received significant consumer mortgage fee income as a
result of activity in mortgage and refinance markets. As initial home
purchasing and refinancing activity subsided, this income diminished.
Economic conditions in the real estate markets, which have been weak in
the past, can have a substantial effect upon banks and thrifts because
they generally have a portion of their assets invested in loans secured
by real estate. Banks, thrifts and their holding companies are subject
to extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
Page 7
prospects of the Securities in the Trust's portfolio cannot be predicted
with certainty. The recently enacted Gramm-Leach-Bliley Act repealed
most of the barriers set up by the 1933 Glass-Steagall Act which
separated the banking, insurance and securities industries. Now banks,
insurance companies and securities firms can merge to form one-stop
financial conglomerates marketing a wide range of financial products to
investors. This legislation will likely result in increased merger
activity and heightened competition among existing and new participants
in the field. Efforts to expand the ability of federal thrifts to branch
on an interstate basis have been initially successful through
promulgation of regulations, and legislation to liberalize interstate
banking which has recently been signed into law. Under the legislation,
banks will be able to purchase or establish subsidiary banks in any
state, one year after the legislation's enactment. Starting in mid-1997,
banks were allowed to turn existing banks into branches. Consolidation
is likely to continue. The Securities and Exchange Commission and the
Financial Accounting Standards Board require the expanded use of market
value accounting by banks and have imposed rules requiring market
accounting for investment securities held in trading accounts or
available for sale. Adoption of additional such rules may result in
increased volatility in the reported health of the industry, and
mandated regulatory intervention to correct such problems. In late 1993
the United States Treasury Department proposed a restructuring of the
banks regulatory agencies which, if implemented, may adversely affect
certain of the Securities in the Trust's portfolio. Additional
legislative and regulatory changes may be forthcoming. For example, the
bank regulatory authorities have proposed substantial changes to the
Community Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such
changes would have on the Securities in a Trust's portfolio. In
addition, from time to time the deposit insurance system is reviewed by
Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability as investment opportunities available to bank institutions
become more limited and as consumers look for savings vehicles other
than bank deposits. Banks and thrifts face significant competition from
other financial institutions such as mutual funds, credit unions,
mortgage banking companies and insurance companies, and increased
competition may result from legislative broadening of regional and
national interstate banking powers as has been recently enacted. Among
other benefits, the legislation allows banks and bank holding companies
to acquire across previously prohibited state lines and to consolidate
their various bank subsidiaries into one unit. The Sponsor makes no
prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such actions
might have on a Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Securities or whether such approvals, if necessary, will be
obtained.
Small-Cap Companies. While historically small-cap company stocks have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap companies may have
limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
these companies may distribute, sell or produce products which have
recently been brought to market and may be dependent on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
Page 8
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Trusts
which contain these Securities to buy and sell significant amounts of
such shares without an unfavorable impact on prevailing market prices.
Technology Companies. Certain Portfolios are considered to be
concentrated in common stocks of technology companies. See "Risk
Factors" in the prospectus which will indicate, if applicable, a Trust's
concentration in this industry.
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
a Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
Page 9
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Portfolios
Equity Securities Selected for the European Target 20 Portfolio,
2(nd) Quarter 2000 Series
ABN AMRO Holding NV, headquartered in Amsterdam, the Netherlands,
provides full-service banking operations both in the Netherlands and
worldwide.
Abbey National Plc, headquartered in London, England, offers personal
banking services through its locations in the United Kingdom, France,
Gibraltar, Italy, Spain and other countries worldwide.
BG Group Plc, headquartered in Berkshire, England, is an international
energy company that develops and supplies gas markets worldwide. The
company and its subsidiaries also provide exploration and production;
research and technology; and property development services.
Barclays Plc, headquartered in London, England, is a financial services
group engaged primarily in the banking and investment banking
businesses. Through its subsidiary, Barclay Bank Plc, the company offers
commercial and investment banking, insurance, financial and related
services in more than 60 countries.
Bayer AG, headquartered in Leverkusen, Germany, manufactures industrial
chemicals and polymers, as well as human and animal healthcare products,
pharmaceuticals and agricultural crop protection agents. The company
markets its products to the automotive, electronic, medical,
construction, farming, textile, utility and printing industries worldwide.
CGU Plc, headquartered in London, England, is the holding company for
Commercial Union Assurance Company Plc, an international life and
property-casualty insurance operation. Through its subsidiary, the
company transacts all classes of insurance and life assurance excluding
industrial life. The company also does business in property investment
and development, loans and mortgages.
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.
Diageo Plc, headquartered in London, England, has operations in food,
alcoholic beverages, fast food restaurants and property management. The
company markets food products under the "Pillsbury," "Haagen Dazs," and
"Green Giant" brand names; and liquor and beer products under the
"Smirnoff," "J&B Rare," "Johnnie Walker," "Jose Cuervo," "Baileys,"
"Harp" and "Guinness Stout" names. The company also owns "Burger King"
restaurants.
ENI SpA, headquartered in Rome, Italy, is a fully integrated oil and gas
company with operations worldwide. The company explores for,
distributes, refines and markets petroleum products. The company also
provides offshore oil and gas pipelaying services.
Halifax Group Plc, headquartered in Halifax, England, provides a full
range of personal financial services throughout the United Kingdom.
Hoechst AG, headquartered in Frankfurt, Germany, through subsidiaries,
manufactures pharmaceuticals, agriculture and veterinary products and
industrial chemicals. The company produces prescription drugs,
herbicides, fungicides and insecticides; animal anti-parasitic products,
antibiotics and vaccines; and basic chemicals, plastics, polymers and
industrial gases. The company markets its products worldwide.
ING Groep N.V., headquartered in Amsterdam, the Netherlands, offers a
comprehensive range of financial services worldwide, including life and
non-life insurance, commercial and investment banking, asset management
and related products.
Lloyds TSB Group Plc, headquartered in London, England, through
subsidiaries and associated companies, offers a wide range of banking
and financial services throughout the United Kingdom and a number of
other countries.
RWE AG, headquartered in Essen, Germany, is one of Germany's largest
energy utility companies. Through subsidiaries, the company operates
Page 10
worldwide, offering products and services in the energy, mining, raw
materials, petroleum, chemicals, waste disposal, mechanical and plant
engineering, construction and civil engineering business sectors.
Rio Tinto Plc, headquartered in London, England, is an international
mining company with operations in Australia, Canada, Europe, New
Zealand, South Africa, South America and the United States.
San Paolo-IMI SpA, headquartered in Turin, Italy, operates as a
commercial bank in Italy and abroad and is the holding company of a
diversified financial group which includes municipal lender "Crediop."
Shell Transport & Trading Company Plc, headquartered in London, England,
owns 40% of the Royal Dutch/Shell Group of companies. These companies
are involved in all phases of the petroleum industry, from exploration
to final processing and delivery. The company primarily derives income
from dividends generated by the group's holding companies. The company
has locations in over 130 countries around the world.
Societe Generale, headquartered in Paris, France, provides full banking
and financial services through both domestic and foreign offices. The
company offers clients asset management, capital market services, equity
investments and specialized financing, and operates in 80 countries.
UBS AG, headquartered in Zurich, Switzerland, through its subsidiaries,
Warburg Dillon Read, UBS Capital and UBS Brinson, offers banking,
financing, investment and asset management services.
Unilever Plc, headquartered in London, England, manufactures branded and
packaged consumer goods including food, detergents, fragrances and
personal care products. The company shares operations with Unilever N.V.
The two companies are linked by a series of agreements and operate as a
single entity as much as possible. The company sells its products
internationally.
Equity Securities Selected for the Target Small-Cap Portfolio, 2(nd)
Quarter 2000 Series
Actel Corporation, headquartered in Sunnyvale, California, designs,
develops and markets field programmable gate arrays and associated
development system software and programming hardware.
American Xtal Technology, Inc., headquartered in Fremont, California,
produces high-performance-compound semiconductor base materials, or
substances, for use in a variety of electronic and opto-electronic
applications. The company primarily manufactures and sells compound
semiconductor substrates composed of gallium arsenide.
Belden Inc., headquartered in St. Louis, Missouri, designs, makes and
markets wire, cable and cord products for electronic and electrical
applications. The company's products include multiconductor, coaxial and
fiber optic backbone cables; and cords and lead, hook-up and other wire.
Cerner Corporation, headquartered in Kansas City, Missouri, designs,
develops, markets, installs and supports member/patient-focused clinical
and management information systems that are capable of being implemented
on an individual, combined or enterprise-wide basis.
Charming Shoppes, Inc., headquartered in Bensalem, Pennsylvania,
operates women's specialty apparel stores under the names "Fashion Bug"
and "Fashion Bug Plus." The stores sell sportswear, dresses, coats,
casual footwear, lingerie and accessories mainly to women between the
ages of 20 and 45.
The Cheesecake Factory Incorporated, headquartered in Calabasas Hills,
California, operates upscale, full-service, casual dining restaurants
under the name "The Cheesecake Factory" in 11 states and Washington,
D.C. The company also operates a self-service, limited menu "express"
operation at DisneyQuest in Orlando, Florida and a bakery production
facility.
Computer Horizons Corp., headquartered in Mountain Lakes, New Jersey,
provides a wide range of information technology services and solutions
to major corporations, including staffing, application development,
conversions/migrations, enterprise network management, legacy
maintenance outsourcing, and knowledge transfer and training.
Cost Plus, Inc., headquartered in Oakland, California, operates retail
stores, specializing in the sale of casual home living and entertainment
products, under the name "Cost Plus World Market," mainly in the western
United States.
Cross Timbers Oil Company, headquartered in Fort Worth, Texas, acquires,
exploits and develops producing oil and gas properties, with operations
in Texas, Kansas, New Mexico, Oklahoma and Wyoming. The company also
owns and operates a gas gathering system in Oklahoma.
Dain Rauscher Corporation, headquartered in Minneapolis, Minnesota,
provides investment banking, securities brokerage and money management
Page 11
services to individual investors in the western United States as well as
corporate and government clients nationwide.
Elcor Corporation, headquartered in Dallas, Texas, makes premium
laminated fiberglass asphalt residential roofing products;
remanufactures diesel engine cylinder liners; provides tin plating of
pistons; and applies shielding to computer and electronic equipment.
First Consulting Group, Inc., headquartered in Long Beach, California,
provides information technology and other consulting services to payors
and other healthcare organizations in North America and Europe.
Harman International Industries, Incorporated, headquartered in
Washington, D.C., makes and distributes a broad range of high quality,
high fidelity audio and video system components for the consumer home
and automotive, original equipment manufacturer, and professional
markets worldwide.
hi/fn, inc., headquartered in Los Gatos, California, designs, develops
and markets semiconductor devices which are used in a variety of
networking and storage equipment such as routers, remote access
concentrators, firewalls and back-up storage devices. The company's
devices enable secure, high-bandwidth network connectivity and storage
of business information.
Indus International, Inc., headquartered in San Francisco, California,
develops, markets, implements and supports enterprise asset management
software and service solutions for capital intense industries.
Insight Enterprises, Inc., headquartered in Tempe, Arizona, sells
microcomputers, peripherals and software mainly to small and medium-
sized enterprises, through a combination of targeted direct mail
catalogs, advertising in computer magazines and publications, and a
strong outbound telemarketing sales force.
Insituform Technologies, Inc. (Class A), headquartered in Chesterfield,
Missouri, provides proprietary trenchless technologies for the
rehabilitation and improvement of sewer, water, gas and industrial pipes.
Inter-Tel, Incorporated, headquartered in Phoenix, Arizona, develops and
provides telephone systems, voice processing, computer telephone
integration, and network and long distance calling services to
businesses mainly in the United States. The company also provides
leasing, support and maintenance services through a direct sales and
reseller network.
JAKKS Pacific, Inc., headquartered in Malibu, California, develops,
markets and distributes a variety of toys and electronic products for
children including specialty dolls and related accessories; toys
featuring popular entertainment properties and characters; and
collectible and toy vehicles.
Kennametal Inc., headquartered in Latrobe, Pennsylvania, makes, sells
and distributes a broad range of tools, industrial supplies and
accessories for the metalworking, mining and highway construction
industries. The company's operations are located worldwide.
Kronos Incorporated, headquartered in Chelmsford, Massachusetts,
designs, develops, makes and markets time and attendance, workforce
management and shop floor data collection systems, and application
software that enhances productivity in the workplace.
Landstar System, Inc., headquartered in Jacksonville, Florida, through
subsidiaries, operates as a truckload carrier in North America,
transporting a variety of freight including iron and steel, automotive
products, paper, lumber and building products, aluminum, chemicals,
foodstuffs, heavy machinery, ammunition and explosives, and military
hardware.
META Group, Inc., headquartered in Stamford, Connecticut, provides
research and analysis of developments and trends in the computer
hardware, software, communications and related information technology
("IT") industries to IT users and vendors. The company also provides
related consulting services.
Mobile Mini, Inc., headquartered in Tempe, Arizona, designs and makes
portable steel storage containers, portable offices and
telecommunications shelters; acquires and refurbishes ocean-going
shipping containers for sale and leasing; and designs and makes delivery
systems to complement storage container sales and leasing activities.
National Discount Brokers Group, Inc., headquartered in Jersey City, New
Jersey, through subsidiaries, acts as a broker/dealer, providing
wholesale market-making of Nasdaq and Small-Cap securities; provides
deep discount retail brokerage services; acts as a specialist in equity
securities on the American Stock Exchange and the NYSE; and provides
related financial services.
On Assignment, Inc., headquartered in Calabasas, California, provides
temporary and permanent placement of scientific personnel to
laboratories and other institutions; and provides temporary and
permanent placement of credit, collection and medical billing
professionals to the financial services and healthcare industries.
Page 12
Pacific Sunwear of California, Inc., headquartered in Anaheim,
California, sells everyday casual apparel, footwear and accessories
through mall-based stores in 43 states. The company's customers are
primarily young men aged 12 to 24, as well as young women of the same
age, who generally prefer a casual look.
Power Integrations, Inc., headquartered in Sunnyvale, California,
designs, develops and markets proprietary, high-voltage analog
integrated circuits for use in AC-to-DC power conversion.
Priority Healthcare Corporation (Class B), headquartered in Altamonte
Springs, Florida, distributes specialty pharmaceuticals and related
medical supplies to alternate healthcare markets; and provides patient-
specific, self-injectable biopharmaceuticals and disease treatment
programs to individuals with chronic diseases.
Province Healthcare Company, headquartered in Brentwood, Tennessee,
provides healthcare services in non-urban markets in the United States
through general acute care hospitals in four states. The company also
provides management services to hospitals.
SBS Technologies, Inc., headquartered in Albuquerque, New Mexico,
designs, makes and sells avionics interface equipment for the
development, testing and evaluation of military equipment; telemetry
equipment used in ground stations for system test data reception and
satellite communication; and computer I/O equipment for commercial and
industrial applications.
SierraCities.com Inc., headquartered in Houston, Texas, delivers
financing to small businesses through its online electronic commerce
software system. The company's products enable small businesses to gain
online access to financing for specific equipment purchases and for
general corporate purposes.
The Source Information Management Company, headquartered in St. Louis,
Missouri, provides monitoring, documentation and collection services
required to obtain single copy magazine sales incentive payments
available from magazine publishers to magazine and periodical retailers.
Southwest Securities Group, Inc., headquartered in Dallas, Texas,
provides securities transaction processing to broker/dealers; securities
brokerage to individuals and institutions; investment banking services
to municipal and corporate clients; fixed income and equity securities
trading; and asset management and trust services.
Stericycle, Inc., headquartered in Lake Forest, Illinois, uses
proprietary technology to provide environmentally responsible management
of regulated medical waste for the healthcare industry.
Stone Energy Corporation, headquartered in Lafayette, Louisiana,
acquires, exploits and operates oil and gas properties mainly in the
Gulf Coast Basin.
Take-Two Interactive Software, Inc., headquartered in New York, New
York, designs, develops, publishes and markets interactive software games.
Tetra Tech, Inc., headquartered in Pasadena, California, provides
comprehensive environmental engineering and consulting services
addressing complex water contamination and other environmental problems.
The Timberland Company (Class A), headquartered in Stratham, New
Hampshire, designs, develops, makes and markets boots, shoes, apparel
and accessories under the "Timberland" brand name.
Vicor Corporation, headquartered in Andover, Massachusetts, designs,
manufactures and markets modular power components and complete power
systems using a patented, high frequency electronic power conversion
technology called zero current switching.
Equity Securities Selected for the Value Line(registered trademark)
Target Portfolio, 2(nd) Quarter 2000 Series
AVX Corporation, headquartered in Myrtle Beach, South Carolina, makes
and supplies a broad line of passive electronic components and related
products. The company also makes and sells electronic connectors, and
distributes and sells certain passive components and connectors
manufactured by Kyocera Corp.
Adobe Systems Incorporated, headquartered in San Jose, California,
develops, markets and supports computer software products and
technologies that enable users to express and use information across all
print and electronic media.
Analog Devices, Inc., headquartered in Norwood, Massachusetts, designs,
makes and sells a broad line of high-performance linear, mixed signal
and digital integrated circuits that address a wide range of real-world
signal processing applications.
Applied Materials, Inc., headquartered in Santa Clara, California,
develops, manufactures and markets semiconductor wafer fabrication
Page 13
equipment and related spare parts to semiconductor wafer manufacturers
and semiconductor integrated circuit manufacturers.
BCE Inc., headquartered in Montreal, Canada, with subsidiaries and
affiliates, provides telecommunications services in Canada; publishes
telephone directories in Canada and internationally; and designs and
builds telecommunications networks globally.
Cypress Semiconductor Corporation, headquartered in San Jose,
California, designs, makes and sells a broad line of high performance,
digital integrated circuits which are fabricated using proprietary CMOS
(complementary metal-oxide-silicon), BiCMOS, and Flash technologies. The
company designs, develops and manufactures high-performance integrated
circuits for a range of markets, including computers,
telecommunications, instrumentation and military systems.
Electro Scientific Industries, Inc., headquartered in Portland, Oregon,
provides electronics manufacturers with equipment necessary to produce
key components used in wireless telecommunications, computers,
automotive electronics, and many other electronic products.
Gemstar International Group Limited, headquartered in Pasadena,
California, develops, markets and licenses proprietary technologies and
systems that simplify and enhance the viewing and recording of video and
television programming.
Integrated Device Technology, Inc., headquartered in Santa Clara,
California, designs, develops, makes and sells a broad range of high
performance semiconductor products and modules for its key markets: data
communications and telecommunications equipment; personal computers; and
shared network devices.
IVAX Corporation, headquartered in Miami, Florida, researches, develops,
makes and sells generic and branded pharmaceuticals. The company's
business is focused primarily in oncology products, respiratory products
and specialty generic pharmaceuticals.
Jones Pharma Incorporated, headquartered in St. Louis, Missouri, makes
and sells pharmaceuticals, including products that serve the thyroid
treatment and the critical care segments of the health care industry as
well as the companion animal segment of the veterinary industry.
LSI Logic Corporation, headquartered in Milpitas, California, designs,
develops, makes and sells application-specific integrated circuits.
Micrel, Incorporated, headquartered in San Jose, California, designs,
develops, manufactures and markets a range of high performance analog
integrated circuits that are used in a wide variety of electronic
products, including those in the communications, computer and industrial
markets.
Network Appliance, Inc., headquartered in Sunnyvale, California,
designs, makes, markets and supports high performance network data
storage devices which provide fast, simple, reliable and cost-effective
file service for data-intensive network environments.
Oracle Corporation, headquartered in Redwood Shores, California,
designs, develops, markets and supports computer software products with
a wide variety of uses, including database management, application
development, business intelligence and business applications.
PE Corp.-PE Biosystems Group, headquartered in Norwalk, Connecticut,
supplies instrument systems, reagents, software, and related services to
the life science industry and research community. The company also
provides related consulting and contract research and development
services.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
QLogic Corporation, headquartered in Costa Mesa, California, designs and
supplies semiconductor products that provide interface connections
between computer systems and their attached data storage peripherals
such as hard disk drives, tape drives and subsystems.
QUALCOMM Incorporated, headquartered in San Diego, California, designs,
develops, makes, sells, licenses and operates advanced communications
systems and products based on proprietary digital wireless technology.
The company's products include "CDMA" integrated circuits, wireless
phones and infrastructure products, transportation management
information systems and ground stations, and phones for the low-earth-
orbit satellite communications system.
SCI Systems, Inc., headquartered in Huntsville, Alabama, designs, makes,
markets and services products for the computer, computer peripheral,
telecommunication, medical, industrial, consumer, and military and
aerospace markets.
SDL, Inc., headquartered in San Jose, California, designs, manufactures
and markets semiconductor optoelectronic integrated circuits,
semiconductor lasers, fiber optic products and optoelectronic systems.
Page 14
The company's products are used in the telecommunications, cable
television, dense wavelength division multiplexing and satellite
communications markets.
Siebel Systems, Inc., headquartered in San Mateo, California, designs,
sells and supports enterprise-class sales and marketing information
software systems. The company also designs, develops and markets a Web-
based application software product.
Symantec Corporation, headquartered in Cupertino, California, develops
utility software for business and personal computing. The company's
products are organized into 3 business units: remote productivity
solutions; security and assistance; and Internet tools, royalties and
other.
Teradyne, Inc., headquartered in Boston, Massachusetts, makes electronic
test systems and software for use in the electronics industry, and
backplane connection systems for the military/aerospace,
telecommunications and computer industries.
The Titan Corporation, headquartered in San Diego, California, provides
state-of-the-art information technology and electronic systems and
services to commercial and government customers in the areas of
communications systems, software systems, information technologies, and
medical sterilization and food pasteurization.
We have obtained the foregoing company descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 15
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 414, 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; and FT 412 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 414, 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 March 31, 2000.
FT 414
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 ) March 31, 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 March 31, 2000 in
Amendment No. 3 to the Registration Statement (Form S-6) (File
No. 333-31112) and related Prospectus of FT 414.
ERNST & YOUNG LLP
Chicago, Illinois
March 31, 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 414 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as
Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
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
MEMORANDUM
FT 414
File No. 333-31112
The Prospectus and the Indenture filed with Amendment No. 3
of the Registration Statement on Form S-6 have been revised to
reflect information regarding the execution of the Indenture and
the deposit of Securities on March 31, 2000 and to set forth
certain statistical data based thereon. In addition, there are a
number of other changes described below.
THE PROSPECTUS
Cover Page The date of the Trusts has been added.
Page 3 The following information for the Trusts appear:
The Aggregate Value of Securities initially
deposited have been added.
The initial number of units of the Trusts
Sales charge
The Public Offering Price per Unit as of the
business day before the Initial Date of Deposit
The Mandatory Termination Date has been added.
Page 6 The Report of Independent Auditors has been
completed.
Page 7 The Statements of Net Assets have been completed.
Page 8-10 The Schedules of Investments have been completed.
Back Cover The date of the Prospectus has been included.
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect
the execution thereof.
CHAPMAN AND CUTLER
March 31, 2000
FT 414
TRUST AGREEMENT
Dated: March 31, 2000
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank, as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions
of Trust for The First Trust Special Situations Trust, Series 22
and certain subsequent Series, Effective November 20, 1991"
(herein called the "Standard Terms and Conditions of Trust"), and
such provisions as are incorporated by reference constitute a
single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR EUROPEAN TARGET 20 PORTFOLIO, 2ND QUARTER 2000 SERIES
("EUROPEAN TARGET 20 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Portfolio Supervisors compensation as referred to
in Section 3.13 of the Standard Terms and Conditions of Trust
shall be an annual fee in the amount of $.0025 per Unit.
J. The Initial Date of Deposit for the Trust is March 31,
2000.
K. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
L. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
M. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 1,000 Units of the Trust.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TARGET SMALL-CAP PORTFOLIO, 2ND QUARTER 2000 SERIES ("SMALL-
CAP TARGET 10 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Portfolio Supervisors compensation as referred to
in Section 3.13 of the Standard Terms and Conditions of Trust
shall be an annual fee in the amount of $.0025 per Unit.
J. The Initial Date of Deposit for the Trust is March 31,
2000.
K. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
L. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
M. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 1,000 Units of the Trust.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR VALUE LINE TARGET PORTFOLIO, 2ND QUARTER 2000 SERIES
("VALUE LINE TARGET TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Portfolio Supervisors compensation as referred to
in Section 3.13 of the Standard Terms and Conditions of Trust
shall be an annual fee in the amount of $.0025 per Unit.
J. The Initial Date of Deposit for the Trust is March 31,
2000.
K. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
L. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
M. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 1,000 Units of the Trust.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 24 shall include the FT
Series to which this Trust Agreement relates.
B. Notwithstanding anything to the contrary in the
Prospectus, parties to the trust agreement are hereby advised:
The Trusts are not sponsored, endorsed, sold or
promoted by Dow Jones & Company, Inc. ("Dow Jones"). Dow
Jones makes no representation or warranty, express or
implied, to the owners of the Trusts or any member of the
public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only
relationship to the Sponsor is the licensing of certain
trademarks, trade names and service marks of Dow Jones and
of the Dow Jones Industrial AverageSM , which is determined,
composed and calculated by Dow Jones without regard to the
Sponsor or the Trusts. Dow Jones has no obligation to take
the needs of the Sponsor or the owners of the Trusts into
consideration in determining, composing or calculating to
Dow Jones Industrial AverageSM. Dow Jones is not
responsible for and has not participated in the
determination of the timing of, prices at, or quantities of
the Trusts to be issued or in the determination or
calculation of the equation by which the Trusts are to be
converted into cash. Dow Jones has no obligation or
liability in connection with the administration, marketing
or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE DOW JONES INDUSTRIAL AVERAGESM OR ANY
DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW
JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW
JONES 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 DOW JONES
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES
HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED
OF THE POSSIBILITY THEREOF.
C. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
D. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
E. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
F. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
G. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
H. Section 1.01(27) shall be added to read as follows:
"(27) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Rollover Notification Date" shall be defined as set
forth in the Prospectus under "Summary of Essential
Information."
I. Section 1.01(28) shall be added to read as follows:
"(28) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Rollover Distribution" shall be defined as set forth
in Section 5.05, herein."
J. Section 1.01(29) shall be added to read as follows:
"(29) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Distribution Agent" shall refer to the Trustee acting
in its capacity as distribution agent pursuant to
Section 5.05 herein."
K. Section 1.01(30) shall be added to read as follows:
"(30) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Special Redemption and Liquidation Period" shall be as
set forth in the Prospectus under "Summary of Essential
Information."
L. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit. Cash represented by a foreign currency shall
be replicated in such currency or, if the Trustee has
entered into a contract for the conversion thereof, in U.S.
dollars in an amount replicating the dollars to be received
on such conversion."
M. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for
any Letter(s) of Credit deposited with the Trustee in
connection with the deposits described in Section 2.01(a)
and (b) cash in an amount sufficient to satisfy the
obligations to which the Letter(s) of Credit relates. Any
substituted Letter(s) of Credit shall be released by the
Trustee."
N. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligation requires settlement in
a foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of the
Contract Obligation and cash or a Letter of Credit in U.S.
dollars sufficient to perform such foreign exchange
contact."
O. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
P. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the conclusion of the
period of time during which a Trusts organization expenses
will be included in the Public Offering Price of Units (the
"Organization Expense Period"), as set forth in the
Prospectus for a Trust (as certified by the Depositor to the
Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust in an amount certified to the Trustee
by the Depositor. In no event shall the amount paid by the
Trustee to the Depositor for the Depositors reimbursable
expenses of organizing the Trust exceed the estimated per
Unit amount of organization costs set forth in the
Prospectus for the Trust multiplied by the number of Units
of the Trust outstanding at the conclusion of the
Organization Expense Period; nor shall the Depositor be
entitled to or request reimbursement for expenses of
organizing the Trust incurred after the conclusion of the
Organization Expense Period. If the cash balance of the
Capital Account is insufficient to make such withdrawal, the
Trustee shall, as directed by the Depositor, sell Securities
identified by the Depositor, or distribute to the Depositor
Securities having a value, as determined under Section 4.01
as of the date of distribution, sufficient for such
reimbursement. Securities sold or distributed to the
Depositor to reimburse the Depositor pursuant to this
Section shall be sold or distributed by the Trustee, to
extent practicable, in the percentage ratio then existing.
The reimbursement provided for in this section shall be for
the account of the Unit holders of record at the conclusion
of the Organization Expense Period. Any assets deposited
with the Trustee in respect of the expenses reimbursable
under this Section 3.01 shall be held and administered as
assets of the Trust for all purposes hereunder. The
Depositor shall deliver to the Trustee any cash identified
in the Statement of Net Assets of the Trust included in the
Prospectus not later than the expiration of the Delivery
Period and the Depositors obligation to make such delivery
shall be secured by the letter of credit deposited pursuant
to Section 2.01. Any cash which the Depositor has
identified as to be used for reimbursement of expenses
pursuant to this Section 3.01 shall be held by the Trustee,
without interest, and reserved for such purpose and,
accordingly, prior to the conclusion of the Organization
Expense Period, shall not be subject to distribution or,
unless the Depositor otherwise directs, used for payment of
redemptions in excess of the per Unit amount payable
pursuant to the next sentence. If a Unit holder redeems
Units prior to the conclusion of the Organization Expense
Period, the Trustee shall pay to the Unit holder, in
addition to the Redemption Value of the tendered Units,
unless otherwise directed by the Depositor, an amount equal
to the estimated per Unit cost of organizing the Trust set
forth in the Prospectus, or such lower revision thereof most
recently communicated to the Trustee by the Depositor
pursuant to Section 5.01, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in
the Trust is insufficient for such payment, the Trustee
shall have the power to sell Securities in accordance with
Section 5.02. As used herein, the Depositor's reimbursable
expenses of organizing the Trust shall include the cost of
the initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses."
Q. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
R. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) if provided
for in the Prospectus for a Trust, the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
S. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
T. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
U. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Income Account or,
to the extent funds are not available in such Account, from
the Capital Account and pay to the Depositor the amount that
it is entitled to receive pursuant to Section 3.14."
V. Section 3.07 of the Standard Terms and Conditions of
Trust is amended to delete the word and at the end of Section
3.07(f) and replace Section 3.01(g) with the following:
"(g) that such sale is required due to Units tendered for
redemption;
(h) that the sale of Securities is necessary or advisable
in order to maintain the qualification of the Trust as a
"regulated investment company" in the case of a Trust which has
elected to qualify as such; and
(i) that there has been a public tender offer made for a
Security or a merger or acquisition is announced affecting a
Security, and that in the opinion of the Sponsor the sale or
tender of the Security is in the best interest of the Unit
holders."
W. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
X. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in the per Unit amount set forth in
Part II of the Trust Agreement, calculated based on the
largest number of Units outstanding during the calendar year
except during the initial offering period as determined in
Section 4.01 of this Indenture, in which case the fee is
calculated based on the largest number of Units outstanding
during the period for which the compensation is paid (such
annual fee to be pro rated for any calendar year in which
the Portfolio Supervisor provides services during less than
the whole of such year). Such fee may exceed the actual
cost of providing such portfolio supervision services for
the Trust, but at no time will the total amount received for
portfolio supervision services rendered to unit investment
trusts of which Nike Securities L.P. is the sponsor in any
calendar year exceed the aggregate cost to the Portfolio
Supervisor of supplying such services in such year."
Y. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in the per Unit amount set forth in Part II of the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the
initial offering period as determined in Section 4.01 of
this Indenture, in which case the fee is calculated based on
the largest number of Units outstanding during the period
for which the compensation is paid (such annual fee to be
pro rated for any calendar year in which the Depositor
provides services during less than the whole of such year).
Such fee may exceed the actual cost of providing such
bookkeeping and administrative services for the Trust, but
at not time will the total amount received for bookkeeping
and administrative services rendered to unit investment
trusts of which Nike Securities L.P. is the sponsor in any
calendar year exceed the aggregate cost to the Depositor of
supplying such services in such year. Such compensation
may, from time to time, be adjusted provided that the total
adjustment upward does not, at the time of such adjustment,
exceed the percentage of the total increase, after the date
hereof, in consumer prices for services as measured by the
United States Department of Labor consumer Price Index
entitled "All Services Less Rent of Shelter" or similar
index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall
not be required for any such adjustment or increase. Such
compensation shall be paid by the Trustee, upon receipt of
an invoice therefor from the Depositor, upon which, as to
the cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against
the Income and Capital Accounts on or before the
Distribution Date following the Monthly Record Date on which
such period terminates. The Trustee shall have no liability
to any Certificateholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein."
Z. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus and, except for situations in which the Trust
Fund Evaluation determined as provided in Section 5.01
hereof has been reduced by the amount of any unpaid accrued
deferred sales charge, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02, which amount, except for
situations in which the Trust Fund Evaluation determined as
provided in Section 5.01 hereof has been reduced by the
amount of any unpaid accrued deferred sales charge, shall be
reduced by the unpaid portion of the deferred sales charge.
All advances made by the Trustee pursuant to this Section
shall be secured by a lien on the Trust prior to the
interest of the Unit holders. If the related Prospectus
provides that the deferred sales charge shall accrue on a
daily basis, the "unpaid portion of the deferred sales
charge" as used in this paragraph shall mean the accrued and
unpaid deferred sales charge as of the date of redemption or
termination, as appropriate."
AA. Notwithstanding anything to the contrary in Sections
3.15 and 4.05 of the Standard Terms and Conditions of Trust, so
long as Nike Securities L.P. is acting as Depositor, the Trustee
shall have no power to remove the Portfolio Supervisor.
BB. The following Section 3.16 shall be added:
Section 3.16. Creation and Development Fee. If the
prospectus related to the Trust specifies a creation and
development fee, the Trustee shall, on such date or dates set
forth in the Prospectus for a Trust withdraw from the Capital
Account, an amount equal to either the accrued and unpaid
creation and development fee as of such date (for Trusts in which
the applicable Prospectus provides that the creation and
development accrue on a daily basis) or the entire creation and
development fee (for Trusts in which the applicable Prospectus
provides that the creation and development fee be assessed at the
conclusion of the primary offering period, as certified by the
Depositor to the Trustee) and credit such amount to a special non-
Trust account designated by the Depositor out of which the
creation and development fee will be distributed to the Depositor
(the "Creation and Development Account"). For Trusts in which
the applicable Prospectus provides for daily accrual of the
creation and development fee, the creation and development fee
will accrue on a daily basis at an annual rate as set forth in
such Prospectus for the Trust based on a percentage of the
average daily net asset value of the Trust. For Trusts in which
the applicable Prospectus provides that the entire creation and
development fee will be assessed at the conclusion of the primary
offering period, the reimbursement provided for in this section
shall be for the account of Unit holders of record at the
conclusion of the primary offering period and shall have no
effect on the net asset value of Trust Units prior to such date.
If the balance in the Capital Account is insufficient to make
such withdrawal, the Trustee shall, as directed by the Depositor,
advance funds in an amount required to fund the proposed
withdrawal and be entitled to reimbursement of such advance upon
the deposit of additional monies in the Capital Account, and/or
sell Securities and credit the proceeds thereof to the Creation
and Development Account, provided, however, that the aggregate
amount advanced by the Trustee at any time for payment of the
creation and development fee shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a Security,
identify the Security to be sold and include instructions as to
the execution of such sale. In the absence of such direction by
the Depositor, the Trustee shall sell Securities sufficient to
pay the creation and development fee (and any unreimbursed
advance then outstanding) in full, and shall select Securities to
be sold in such manner as will maintain (to the extent
practicable) the relative proportion of number of shares of each
Security then held. The proceeds of such sales, less any amounts
paid to the Trustee in reimbursement of its advances, shall be
credited to the Creation and Development Account. If the Trust is
terminated pursuant to Section 6.01(g), the Depositor agrees to
reimburse Unitholders for any amounts of the Creation and
Development Fee collected by the Depositor to which it is not
entitled. All advances made by the Trustee pursuant to this
Section shall be secured by a lien on the Trust prior to the
interest of Unit holders. Notwithstanding the foregoing, the
Depositor shall not receive any amount of Creation and
Development Fee which exceeds the maximum amount per Unit stated
in the Prospectus. For Trusts in which the applicable Prospectus
provides for daily accrual of the creation and development fee,
the Depositor shall notify the Trustee, not later than ten
business days prior to the date on which the Depositor
anticipates that the maximum amount of the creation and
development fee the Depositor may receive has been accrued and
shall also notify the Trustee as of the date when the maximum
amount of the creation and development fee has been accrued. The
Trustee shall have no responsibility or liability for damages or
loss resulting from any error in the information in the preceding
sentence. The Depositor agrees to reimburse the Trust and any
Unit holder any amount of Creation and Development Fee it
receives which exceeds the amount which the Depositor may receive
under applicable laws, regulations and rules."
CC. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.17:
"Section 3.17. Foreign Currency Exchange. Unless the
Depositor shall otherwise direct, whenever funds are
received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in
respect of a sale of Securities, concurrently with the
contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Trustee shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars
pursuant to the instruction of the Depositor. The Trustee
shall have no liability for any loss or depreciation
resulting from action taken pursuant to such instruction."
DD. Article IV, Section 4.01 of the Standard Terms and
Conditions of Trust is hereby amended in the following manner:
1. Section 4.01(b) is hereby amended by deleting that
portion of the first sentence appearing after the colon and
the entire second sentence and replacing them in their
entirety with the following:
"if the Securities are listed on a national
or foreign securities exchange or The Nasdaq Stock
Market, such Evaluation shall generally be based
on the closing sale price on the exchange or
system which is the principal market therefor,
which shall be deemed to be the New York Stock
Exchange if the Securities are listed thereon
(unless the Evaluator deems such price
inappropriate as a basis for evaluation), or if
there is no closing sale price on such exchange or
system, at the closing ask prices. If the
Securities are not so listed or, if so listed and
the principal market therefor is other than on an
exchange, the evaluation shall generally be based
on the current ask price on the over-the-counter
market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If
current ask prices are unavailable, the evaluation
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) any combination of
the above. If such prices are in a currency other
than U.S. dollars, the Evaluation of such Security
shall be converted to U.S. dollars based on
current offering side exchange rates, unless the
Security is in the form of an American Depositary
Share or Receipt, in which case the Evaluations
shall be based upon the U.S. dollar prices in the
market for American Depositary Shares or Receipts
(unless the Evaluator deems such prices
inappropriate as a basis for valuation). As used
herein, the closing sale price is deemed to mean
the most recent closing sale price on the relevant
securities exchange immediately prior to the
Evaluation time."
2. Section 4.01(c) is hereby deleted and
replaced in its entirety with the following:
"(c) After the initial offering period and
both during and after the initial offering period,
for purposes of the Trust Fund Evaluations
required by Section 5.01 in determining Redemption
Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section
4.01(b), on the basis of current bid prices for
Zero Coupon Obligations (if any),the bid side
value of the relevant currency exchange rate
expressed in U.S. dollars and, except in those
cases in which the Equity Securities are listed on
a national or foreign securities exchange or The
Nasdaq Stock Market and the closing sale prices
are utilized, on the basis of the current bid
prices of the Equity Securities. In addition, the
Evaluator shall reduce the Evaluation of each
Security by the amount of any liquidation costs
(other than brokerage costs incurred on any
national securities exchange) and any capital
gains or other taxes which would be incurred by
the Trust upon the sale of such Security, such
taxes being computed as if the Security were sold
on the date of the Evaluation."
EE. The first sentence of Section 4.03. shall be amended to
read as follows:
"As compensation for providing evaluation services under
this Indenture, the Evaluator shall receive, in arrears, against
a statement or statements therefor submitted to the Trustee
monthly or annually an aggregate annual fee equal to the amount
specified as compensation for the Evaluator in the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the initial
offering period as determined in Section 4.01 of this Indenture,
in which case the fee is calculated based on the largest number
of Units outstanding during the period for which the compensation
is paid (such annual fee to be pro rated for any calendar year in
which the Evaluator provides services during less than the whole
of such year). Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does not, at
the time of such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for services
as measured by the United States Department of Labor Consumer
Price Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such compensation
shall be paid by the Trustee, upon receipt of invoice therefor
from the Evaluator, upon which, as to the cost incurred by the
Evaluator of providing services hereunder the Trustee may rely,
and shall be charged against the Income and/or Capital Accounts,
in accordance with Section 3.05."
FF. Section 5.01 is hereby amended to add the following at
the conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in a foreign currency
shall be reported to the Evaluator who shall convert the
same to U.S. dollars based on current exchange rates, in the
same manner as provided in Section 4.01(b) or 4.01(c), as
applicable, for the conversion of the valuation of foreign
Equity Securities, and the Evaluator shall report such
conversion with each Evaluation made pursuant to Section
4.01."
GG. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organization costs, (iv) if the Prospectus for a Trust provides
that the creation and development fee, if any, accrue on a daily
basis, amounts representing unpaid accrued creation and
development fees, (v) if the Prospectus for a Trust provides that
the deferred sales charge shall accrue on a daily basis, amounts
representing unpaid accrued deferred sales charge, and (vi)"; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
"Prior to the payment to the Depositor of its
reimbursable organization costs to be made at the
conclusion of the Organization Expense Period in
accordance with Section 3.01, for purposes of
determining the Trust Fund Evaluation under this
Section 5.01, the Trustee shall rely upon the amounts
representing unpaid accrued organization costs in the
estimated amount per Unit set forth in the Prospectus
until such time as the Depositor notifies the Trustee
in writing of a revised estimated amount per Unit
representing unpaid accrued organization costs. Upon
receipt of such notice, the Trustee shall use this
revised estimated amount per Unit representing unpaid
accrued organization costs in determining the Trust
Fund Evaluation but such revision of the estimated
expenses shall not effect calculations made prior
thereto and no adjustment shall be made in respect
thereof."
HH. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the Prospectus
of a Trust, Unit holders of a Trust who redeem that minimum
number of Units of a Trust set forth in Part II of the Trust
Agreement may request a distribution in kind of (i) such
Unit holder's pro rata portion of each of the Securities in
such Trust, in whole shares, and (ii) cash equal to such
Unit holder's pro rata portion of the Income and Capital
Accounts as follows: (x) a pro rata portion of the net
proceeds of sale of the Securities representing any
fractional shares included in such Unit holder's pro rata
share of the Securities and (y) such other cash as may
properly be included in such Unit holder's pro rata share of
the sum of the cash balances of the Income and Principal
Accounts in an amount equal to the Unit Value determined on
the basis of a Trust Fund Evaluation made in accordance with
Section 5.01 determined by the Trustee on the date of tender
less amounts determined in clauses (i) and (ii)(x) of this
Section. Subject to Section 5.05 with respect to Rollover
Unit holders, to the extent possible, distributions of
Securities pursuant to an in kind redemption of Units shall
be made by the Trustee through the distribution of each of
the Securities in book-entry form to the account of the Unit
holder's bank or broker-dealer at the Depository Trust
Company. Any distribution in kind will be reduced by
customary transfer and registration charges."
II. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Trusts,
(the "New Series"), the Trustee shall, at the Depositor's
sole cost and expense, include in the notice sent to Unit
holders specified in Section 8.02 a form of election whereby
Unit holders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Unit(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included
in the redemption distribution sold, and the cash proceeds
applied by the Distribution Agent to purchase Units of a New
Series, all as hereinafter provided. The Trustee shall
honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption
request with respect to uncertificated Units, by its close
of business on the Rollover Notification Date. The notice
and form of election to be sent to Unit holders in respect
of any redemption and purchase of Units of a New Series as
provided in this section shall be in such form and shall be
sent at such time or times as the Depositor shall direct the
Trustee in writing and the Trustee shall have no
responsibility therefor. The Distributions Agent acts
solely as disbursing agent in connection with purchases of
Units pursuant to this Section and nothing herein shall be
deemed to constitute the Distribution Agent a broker in such
transactions
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled during the
Special Redemption and Liquidation Period on such date or
dates specified by Depositor. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
redemption date equal to the net asset value (determined on
the basis of the Trust Fund Evaluation as of the redemption
date in accordance with Section 4.01) multiplied by the
number of Units being redeemed (herein called the "Rollover
Distribution"). Any Securities that are made part of the
Rollover Distribution shall be valued for purposes of the
redemption distribution as of the redemption date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent during
the Special Redemption and Liquidation Period specified in
the Prospectus pursuant to the Depositor's direction, and
the Distribution Agent shall, unless directed otherwise by
the Depositor, employ the Depositor as broker in connection
with such sales. For such brokerage services, the Depositor
shall be entitled to compensation at its customary rates,
provided however, that its compensation shall not exceed the
amount authorized by applicable securities laws and
regulations. The Depositor shall direct that sales be made
in accordance with the guidelines set forth in the
Prospectus under the heading "Special Redemption,
Liquidation and Investment in a New Trust." Should the
Depositor fail to provide direction, the Distribution Agent
shall sell the Securities in the manner provided in the
prospectus. The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon completion of all sales of Securities included in
the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of a New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such Trust. Such contract shall
provide for purchase of the maximum number of Units of a New
Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
Units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of a New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of a New Series
will be uncertificated unless and until the Rollover Unit
holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation
resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in
the event the Depositor does not make Units available for
purchase.
(b) Notwithstanding the foregoing, the Depositor may,
in its discretion at any time, decide not to offer any new
Trust Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
JJ. Paragraph (e) of Section 6.01 of Article VI of the
Standard Terms and Conditions of Trust is amended to read as
follows:
"(e) (I) Subject to the provisions of subparagraphs
(II) and (III) of this paragraph, the Trustee may employ
agents, sub-custodians, attorneys, accountants and auditors
and shall not be answerable for the default or misconduct of
any such agents, sub-custodians, attorneys, accountants or
auditors if such agents, sub-custodians, attorneys,
accountants or auditors shall have been selected with
reasonable care. The Trustee shall be fully protected in
respect of any action under this Indenture taken or suffered
in good faith by the Trustee in accordance with the opinion
of counsel, which may be counsel to the Depositor acceptable
to the Trustee, provided, however, that this disclaimer of
liability shall not (i) excuse the Trustee from the
responsibilities specified in subparagraph II below or
(ii) limit the obligation of the Trustee to indemnify the
Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the
Trust reimbursable from the Income and Capital Accounts of
the affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of
an eligible foreign custodian (which is employed by the
Trustee as a sub-custodian as contemplated by subparagraph
(I) of this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership Income) the Trust's foreign
securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign securities
transactions, provided that the Trustee hereby agrees to
perform all the duties assigned by rule 17f-5 as now in
effect or as it may be amended in the future, to the boards
of management investment companies. The Trustee's duties
under the preceding sentence will not be delegated.
As used in this subparagraph (II),
(1) "foreign securities" include: securities
issued and sold primarily outside the United States by a
foreign government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the government of the United States or by
any state or any political subdivision thereof or by any
agency thereof or by any entity organized under the laws of
the United States or of any state thereof which have been
issued and sold primarily outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for
the central handling of securities or equivalent book
entries which, by appropriate exemptive order issued by the
Securities and Exchange Commission, have been qualified as
eligible foreign custodians for the Trust but only for so
long as such exemptive order continues in effect: Morgan
Guaranty Trust Company of New York, Brussels, Belgium, in
its capacity as operator of the Euroclear System
("Euroclear"), and Cedel Bank S.A. ("CEDEL").
(b) Any other entity that shall have been
qualified as an eligible foreign custodian for the foreign
securities of the Trust by the Securities and Exchange
Commission by exemptive order, rule or other appropriate
action, commencing on such date as it shall have been so
qualified but only for so long as such exemptive order, rule
or other appropriate action continues in effect.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss occurring as a
result of an eligible foreign custodian's willful
misfeasance, reckless disregard, bad faith, or gross
negligence in performing custodial duties."
KK. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value of
Securities deposited in such Trust during the initial
offering period, or (ii)"
LL. Section 6.01(i) of the Standard Terms and Conditions of
Trust shall be deleted in its entirety and replaced with the
following:
"(i) No payment to a Depositor or to any principal
underwriter (as defined in the Investment Company Act of 1940)
for the Trust or to any affiliated person (as so defined) or
agent of a Depositor or such underwriter shall be allowed the
Trustee as an expense except (a) for payment of such reasonable
amounts as the Securities and Exchange Commission may prescribe
as compensation for performing bookkeeping and other
administrative services of a character normally performed by the
Trustee, and (b) such other amounts permitted under the
Investment Company Act of 1940."
MM. The third paragraph of Section 6.02 of the Standard
Terms and Conditions of Trust shall be deleted in its entirety
and replaced with the following:
"If provided for in the Prospectus for a Trust, the Trustee
shall pay, or reimburse to the Depositor, the expenses related to
the updating of the Trusts registration statement, to the extent
of legal fees, typesetting fees, electronic filing expenses and
regulatory filing fees. Such expenses shall be paid from the
Income Account, or to the extent funds are not available in such
Account, from the Capital Account, against an invoice or invoices
therefor presented to the Trustee by the Depositor. By
presenting such invoice or invoices, the Depositor shall be
deemed to certify, upon which certification the Trustee is
authorized conclusively to rely, that the amounts claimed therein
are properly payable pursuant to this paragraph. The Depositor
shall provide the Trustee, from time to time as requested, an
estimate of the amount of such expenses, which the Trustee shall
use for the purpose of estimating the accrual of Trust expenses.
The amount paid by the Trust pursuant to this paragraph in each
year shall be separately identified in the annual statement
provided to Unit holders. The Depositor shall assure that the
Prospectus for the Trust contains such disclosure as shall be
necessary to permit payment by the Trust of the expenses
contemplated by this paragraph under applicable laws and
regulations.
The provisions of this paragraph shall not limit the
authority of the Trustee to pay, or reimburse to the Depositor or
others, such other or additional expenses as may be determined to
be payable from the Trust as provided in Section 6.02 of the
Standard Terms and Conditions of Trust."
NN. The first sentence of the second paragraph of Section
6.04 shall be amended to include the phrase "license fees, if
any," immediately after the reference to legal and auditing
expenses.
OO. The third sentence of paragraph (a) of Section 6.05 of
the Standard Terms and Conditions of Trust shall be replaced in
its entirety by the following:
"The Depositor may remove the Trustee at any time with or
without cause and appoint a successor Trustee by written
instrument or instruments delivered not less than sixty days
prior to the effective date of such removal and appointment to
the Trustee so removed and to the successor Trustee."
PP. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"The Trustee will honor duly executed requests for in-
kind distributions received (accompanied by the electing
Unit holder's Certificate, if issued) by the close of
business ten business days prior to the Mandatory
Termination Date."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Senior Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Rosalia Raviele
Vice President
[SEAL]
ATTEST:
Joan Currie
Assistant Treasurer
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 414
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 31, 2000
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 414
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 414 in connection with the March 31,
2000 among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P. as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-31112)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 31, 2000
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: FT 414
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 414 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in certain of the Trusts of said
Fund (the "Trust"), under a Trust Agreement, dated March 31, 2000
(the "Indenture"), among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by a Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
Each Trust holds Equity Securities as such term is defined in the
Prospectus. For purposes of the following discussion and
opinion, it is assumed that each Equity Security is equity for
Federal income tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing United States Federal income tax
law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of the Trust under the Internal Revenue Code of 1986 (the
"Code") in the proportion that the number of Units held by him
bears to the total number of Units outstanding; under Subpart E,
Subchapter J of Chapter 1 of the Code, income of a Trust will be
treated as income of the Unit holders in the proportion described
above; and an item of Trust income will have the same character
in the hands of a Unit holder as it would have in the hands of
the Trustee. Each Unit holder will be considered to have
received his pro rata share of income derived from each Trust
asset when such income is considered to be received by a Trust.
II. The price a Unit holder pays for his Units, generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by a Trust (in proportion to the
fair market values thereof on the valuation date closest to the
date the Unit holder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Equity Security
held by a Trust. For Federal income tax purposes, a Unit
holder's pro rata portion of distributions of cash or property by
a corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code) is taxable as ordinary income
to the extent of such corporation's current and accumulated
"earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Equity Security which exceeds such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such
Equity Security shall be treated as gain from the sale or
exchange of property.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from a
Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, taxable exchange, liquidation, redemption, payment on
maturity or otherwise) gain or loss will be recognized to the
Unit holder (subject to various nonrecognition provisions under
the Code) and the amount thereof will be measured by comparing
the Unit holder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning the
tax basis for his Units (as of the date on which his Units were
acquired) among each of a Trust's assets (as of the date on which
his Units were acquired) ratably according to their values as of
the valuation date nearest the date on which he purchased such
Units. A Unit holder's basis in his Units and of his fractional
interest in each Trust asset must be reduced, but not below zero,
by the Unit holder's pro rata portion of dividends with respect
to each Equity Security which is not taxable as ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or
upon the termination of a Trust. As previously discussed, prior
to the redemption of Units or the termination of a Trust, a Unit
holder is considered as owning a pro rata portion of each of a
Trust's assets. The receipt of an in kind distribution will
result in a Unit holder receiving an undivided interest in whole
shares of stock and possibly cash. The potential federal income
tax consequences which may occur under an in kind distribution
with respect to each Equity Security owned by a Trust will depend
upon whether or not a Unit holder receives cash in addition to
Equity Securities. An "Equity Security" for this purpose is a
particular class of stock issued by a particular corporation. A
Unit holder will not recognize gain or loss if a Unit holder only
receives Equity Securities in exchange for his or her pro rata
portion of the Equity Securities held by a Trust. However, if a
Unit holder also receives cash in exchange for a fractional share
of an Equity Security held by a Trust, such Unit holder will
generally recognize gain or loss based upon the difference
between the amount of cash received by the Unit holder and his
tax basis in such fractional share of an Equity Security held by
a Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of
the gain (or loss) recognized under the rules described above by
the redeeming Unit holder with respect to each Equity Security
owned by a Trust.
A domestic corporation owning Units in a Trust may be
eligible for the 70% dividends received deduction pursuant to
Section 243(a) of the Code with respect to such Unit holder's pro
rata portion of dividends received by such Trust (to the extent
such dividends are taxable as ordinary income, as discussed
above, and are attributable to domestic corporations), subject to
the limitations imposed by Sections 246 and 246A of the Code.
To the extent dividends received by a Trust are attributable
to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to
its pro rata portion of such dividends since the dividends
received deduction is generally available only with respect to
dividends paid by domestic corporations.
Section 67 of the Code provides that certain miscellaneous
itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
A Unit holder will recognize taxable gain (or loss) when all
or part of the pro rata interest in an Equity Security is either
sold by a Trust or redeemed or when a Unit holder disposes of his
Units in a taxable transaction, in each case for an amount
greater (or less) than his tax basis therefor; subject to various
nonrecognition provisions of the Code.
It should be noted that payments to a Trust of dividends on
Equity Securities that are attributable to foreign corporations
may be subject to foreign withholding taxes and Unit holders
should consult their tax advisers regarding the potential tax
consequences relating to the payment of any such withholding
taxes by a Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unit holders.
Because under the grantor trust rules, an investor is deemed to
have paid directly his share of foreign taxes that have been paid
or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect
to such taxes. The Taxpayer Relief Act of 1997 imposes a required
holding period for such credits.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including foreign, state or local taxes or collateral tax
consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-31112)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
March 31, 2000
The Chase Manhattan Bank, as Trustee of
FT 414
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 414
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts included in
FT 414 (each, a "Trust"), which will be established under a
certain Standard Terms and Conditions of Trust dated November 20,
1991, and a related Trust Agreement dated as of today
(collectively, the "Indenture") among Nike Securities L.P., as
Depositor (the "Depositor"), First Trust Advisors L.P., as
Evaluator, First Trust Advisors L.P., as Portfolio Supervisor,
and The Chase Manhattan Bank as Trustee (the "Trustee").
Pursuant to the terms of the Indenture, units of fractional
undivided interest in the Trust (the "Units") will be issued in
the aggregate number set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that the
Trust will not constitute an association taxable as a corporation
under New York law, and accordingly will not be subject to the
New York State franchise tax or the New York City general
corporation tax.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-31112) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name in such Registration Statement and the preliminary
prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
March 31, 2000
The Chase Manhattan Bank, as Trustee of
FT 414
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 414
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor, and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in FT
414 (each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "Units"), each of which
represents an undivided interest in the respective Trust which
consists of common stocks (including, confirmations of contracts
for the purchase of certain stocks not delivered and cash, cash
equivalents or an irrevocable letter of credit or a combination
thereof, in the amount required for such purchase upon the
receipt of such stocks), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued thereunder (the "Certificates"), the
Closing Memorandum dated today's date, and such other documents
as we have deemed necessary in order to render this opinion.
Based on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a Trust Company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration
books of the Trust the ownership of the Units by the Depositor.
Upon receipt of confirmation of the effectiveness of the
registration statement for the sale of the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, the Trustee may cause the Units to be transferred on the
registration books of the Trust to, and registered in, such other
names, and in such denominations, as the Depositor may order, and
may deliver, unless the Indenture provides that the Units will be
uncertificated, Certificates evidencing such ownership.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
March 31, 2000
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 414
Gentlemen:
We have examined the Registration Statement File No. 333-
31112 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to First Trust
Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Senior Vice President
