<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 17, 2000
REGISTRATION NO. 333-30680
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
AMENDMENT NO. 1
TO
FORM S-6
---------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
---------------------------------
A. EXACT NAME OF TRUST:
EQUITY INVESTOR FUND
NUVEEN GLOBAL TELECOM FIVE-YEAR SECTOR PORTFOLIO, MARCH 2000
B. NAME OF DEPOSITOR:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NJ 08543-9051
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
<TABLE>
<S> <C>
TERESA KONCICK, ESQ. COPIES TO:
P.O. BOX 9051 PIERRE DE SAINT PHALLE, ESQ.
PRINCETON, NJ 08543-9051 450 LEXINGTON AVENUE
NEW YORK, NY 10017
</TABLE>
E. TITLE OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest 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.
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED MARCH 17, 2000
Distributed Exclusively Through
[LOGO]
Nuveen Global Telecom Five-Year Sector Portfolio, March 2000
EIF
Prospectus Part A dated March , 2000
- --------------------------------------------------------------------------------
- -Portfolio Seeks Capital Appreciation
- -Reinvestment Option
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
TEL-03-00-P
<PAGE>
Nuveen Global Telecom Five-Year Sector Portfolio, March 2000
<TABLE>
<CAPTION>
CUSIP NOS:
<S> <C> <C>
DIVIDEND IN
CASH REINVESTED WRAP
67068A287 67068A295 67068A303
</TABLE>
Overview
The Portfolio seeks to provide capital appreciation by investing in the
securities of companies in the global telecommunications sector.
Units are not deposits or obligations of, or guaranteed by any bank. Units are
not FDIC insured and involve investment risk, including the possible loss of
principal.
Contents
<TABLE>
<C> <S>
2 Overview
3 NUVEEN GLOBAL TELECOM FIVE-YEAR SECTOR
PORTFOLIO, MARCH 2000
7 How to Buy and Sell Units
7 Investing in the Portfolio
7 Sales or Redemptions
7 Risk Factors
8 Distributions
8 Income Distributions
8 Capital Distributions
8 General Information
8 Termination
8 The Sponsor
9 Optional Features
9 REINVESTMENT
9 ROLLOVER TRUSTS
10 Statement of Condition
11 Report of Independent Accountants
For the Table of Contents of Part B, see Part B of
the Prospectus.
</TABLE>
- ------------
------
2
<PAGE>
Nuveen Global Telecom Five-Year Sector Portfolio, March 2000
RISK/RETURN SUMMARY
INVESTMENT OBJECTIVE
The Portfolio seeks to provide capital appreciation by investing for a period of
five years in a fixed portfolio of stocks in the telecommunications industry.
INVESTMENT STRATEGY
The Portfolio consists of stocks of global telecommunications companies. The
Portfolio is diversified across the global telecommunications sector including
international companies and U.S. companies that provide telecommunications
equipment, networking and services, including long distance, Bell Regionals,
independents, internet services, telecom/software services and wireless
services.
Additional portfolios that will invest in stocks in this sector may be offered
in the future. If these future portfolios are available, you may be able to
reinvest into one of the portfolios at a reduced sales charge.
The stocks are expected to remain in the Portfolio until termination.
SECURITY SELECTION
To create the Portfolio, the Sponsor follows these steps:
- - considers the quality of the common stocks; capitalization of the issuers;
the issuers' earnings and dividend payment records; and the prices of the
common stocks.
- - identifies companies with five-year growth potential;
- - performs a thorough fundamental financial analysis;
- - evaluates liquidity, market share and timeliness of purchase; and
- - selects the companies it considers to be well positioned to benefit from:
- advances in telecommunications technology;
- increasing demand for telecommunications products and services;
- global expansion of telecommunications services (especially from
privatization of government-owned facilities); and
- U.S. legislation enabling telephone companies, cable providers and others
to offer multi-service packages.
As of the Initial Date of Deposit, the stocks in the Portfolio are approximately
equally dollar weighted.
SECTOR DESCRIPTION
Telecommunications companies:
- - provide local, long-distance, wireless, cable television and internet
services and information systems;
- - manufacture telecommunications products; and
- - operate voice, data and video telecommunications networks.
Dividends on common stocks of companies in this industry generally depend upon:
- - the amount and growth of customer demand;
- - the level of rates they are allowed to charge; and
- - the effects of inflation on the cost of providing services and the rate of
technological innovation.
The domestic telecommunications industry is characterized by increasing
competition in all sectors and regulation by the Federal Communications
Commission and various state regulatory authorities. To meet increasing
competition, companies may have to commit substantial capital, particularly in
the formulation of new products and services using new technology.
Telecommunications companies in both developed and emerging countries are
undergoing significant change due to varying and evolving levels of governmental
regulation or deregulation and other factors. As a result, competitive pressures
are intense and the securities of such companies may be subject to significant
price volatility.
In addition, all telecommunications companies in both developed and emerging
countries are subject to the additional risk that technological innovations will
make their products and services obsolete.
While the worldwide market for telecommunications equipment is expected to grow,
the Sponsor cannot predict the overall effect on the Portfolio of factors such
as:
- - competing technologies;
- - increasing capital requirements;
------
3
<PAGE>
- - protectionist actions by foreign governments; and
- - demand for new technologies.
The international companies in the Portfolio consist predominantly of former
government-owned telecommunications systems that have been privatized in stages.
The Sponsor cannot predict whether privatization will continue in the future or
what, if any, effect this will have on the Portfolio.
PRIMARY RISKS
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. In addition, the Portfolio may
not perform as well as you hope. These things can happen for various reasons,
including:
- - stock prices can be volatile.
- - share prices or dividend rates on the stocks may decline during the life of
the Portfolio.
- - the Portfolio is not actively managed and may continue to purchase or hold a
stock included in the Portfolio even though the stock's outlook or its market
value or yield may have changed.
- - the Portfolio is concentrated in the global telecommunications industry.
Adverse developments in this industry may affect the value of your Units.
Companies involved in this industry must contend with intense competition,
changing regulations, and product obsolescence.
- - certain of the securities included in the Portfolio are American Depositary
Receipts that evidence ownership of underlying foreign securities. Foreign
securities present risks beyond those of U.S. issuers.
INVESTOR SUITABILITY
The Portfolio may be suitable for you if:
- - You are seeking to own telecommunications stocks in one convenient package;
- - You want capital appreciation potential;
- - The Portfolio represents only a portion of your overall investment portfolio;
and
- - The Portfolio is part of a longer term investment strategy that includes the
investment in subsequent portfolios, if available.
The Portfolio is not appropriate for you if:
- - You are unwilling to take the risks involved with owning a concentrated
equity investment; or
- - You are seeking preservation of capital or high current income.
FEES AND EXPENSES
This table shows the fees and expenses you may pay, directly or indirectly, when
you invest in the Portfolio.
<TABLE>
<CAPTION>
PERCENT OF
PUBLIC AMOUNT
OFFERING PER $1,000
PRICE INVESTED(1)
---------- -----------
<S> <C> <C>
SALES CHARGE
Initial Sales Charge(2)..... 1.00% $10.00
Deferred Sales Charge(3).... 3.50% $35.00
----- ------
TOTAL MAXIMUM SALES
CHARGE.................... 4.50% $45.00
</TABLE>
ESTIMATED ANNUAL OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT APPROXIMATE %
PER UNIT OF PUBLIC
(BASED ON OFFERING
$10 UNIT) PRICE(1)
--------- -------------
<S> <C> <C>
Trustee's Fee............ $0. 0.%
Sponsor's Supervisory,
Bookkeeping and
Administrative Fees.... $0. 0.%
Other Operating
Expenses(4)............ $0. 0.%
--- ---
TOTAL.................... $0. 0.%
MAXIMUM ORGANIZATION
COSTS(5)............... $0. 0.%
</TABLE>
- ------------
(1) Based on 100 Units with a $10 per Unit Public Offering Price as of the
Initial Date of Deposit.
(2) As provided below, the initial sales charge equals the difference between
the maximum sales charge of 4.5% and any remaining deferred sales charges.
Accordingly, the percentage amount of the initial sales charge will vary
over time.
(3) The deferred sales charge is a fixed dollar amount of $0.35 per Unit. The
percentage provided is based on a $10 Unit as of the Initial Date of Deposit
and will vary over time.
(4) Other Operating Expenses do not include brokerage costs and other
transactional fees.
(5) Organization costs are deducted from Portfolio assets at the close of the
initial offering period.
You will pay both an initial and a deferred sales charge. The initial sales
charge equals the difference between
------
4
<PAGE>
the maximum sales charge of 4.5% of the Public Offering Price and any remaining
deferred sales charges. The deferred sales charges are $0.35 per Unit and are
deducted monthly in installments of $0.07 per Unit on the business day of the
month from , 2000 through , 2001.
THE MAXIMUM PER UNIT SALES CHARGES ARE REDUCED AS FOLLOWS:
<TABLE>
<CAPTION>
TOTAL
DEFERRED MAXIMUM
INITIAL SALES SALES
NUMBER OF UNITS(1) CHARGE(2) CHARGE CHARGE
- --------------------- --------- -------- --------
<S> <C> <C> <C>
Less than 5,000...... 1.00% $0.35 4.50%
5,000 to 9,999....... 0.75 $0.35 4.25
10,000 to 24,999..... 0.50 $0.35 4.00
25,000 to 49,999..... 0.00 $0.35 3.50
50,000 to 99,999..... 0.00 $0.35(3) 2.50
100,000 or more...... 0.00 $0.35(3) 1.50
Wrap and Trust
Account Purchases.. 0.00 $0.35(3) 1.00
</TABLE>
- ------------
(1) Sales charge reductions are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 5,000 Units to
$50,000, 10,000 Units to $100,000, etc., and will be applied on that basis
which is more favorable to you.
(2) The initial sales charge percentages are based on the Unit price on the
Initial Date of Deposit. The percentage amount of the initial sales charge
will vary as the Unit price varies and after deferred charges begin.
(3) All Units are subject to the same deferred sales charges. When the deferred
charges exceed the maximum sales charge, you will be given extra Units at
the time of purchase.
The maximum sales charge on reinvested dividends is $0.35 per Unit.
As described in "Public Offering Price" in Part B of the Prospectus, certain
classes of investors are also entitled to reduced sales charges. See "Public
Offering Price" in Part B of the Prospectus for secondary market sales charges.
EXAMPLE
This example may help you to compare the cost of investing in the Portfolio to
the cost of investing in other funds.
The example assumes that you invest $10,000 in the Portfolio for the periods
indicated and then either redeem or do not redeem your Units at the end of those
periods. The example also assumes a 5% return on your investment each year and
that the Portfolio's operating expenses stay the same. The example does not
include brokerage costs and other transactional fees. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------- -------- -------- --------
<S> <C> <C> <C>
</TABLE>
See "Trust Operating Expenses" in Part B of the Prospectus for additional
information regarding expenses.
DEALER CONCESSIONS
The Sponsor plans to allow a concession to Nuveen of 3.60% from which Nuveen
will allow dealers a concession of 3.50% for non-breakpoint purchases of Units
to dealer firms in connection with the sale of Units in a given transaction.
Nuveen will also share in a portion of the sales charge received by the Sponsor.
The concession paid to Nuveen and to dealers is reduced or eliminated in
connection with Units sold in transactions to investors that receive reduced
sales charges based on the number of Units sold or in connection with Units sold
in Rollover Purchases, Wrap Account Purchases and to other investors entitled to
the sales charge reduction applicable for Wrap Account Purchases, as follows:
<TABLE>
<CAPTION>
DEALER
CONCESSION
NUMBER OF UNITS* PER UNIT+
- ---------------- ----------
<S> <C>
Less than 5,000...................... 3.50%
5,000 to 9,999....................... 3.25%
10,000 to 24,999..................... 3.00%
25,000 to 49,999..................... 2.50%
50,000 to 99,999..................... 1.50%
100,000 or more...................... 0.75%
Rollover Purchases (per Unit)........ $0.25
Wrap and Trust Account Purchases..... None
</TABLE>
*Sales charge reductions are computed both on a dollar basis and on the basis of
the number of Units purchased, using the equivalent of 5,000 Units to $50,000,
10,000 Units to $100,000 etc., and will be applied on that basis which is more
favorable to the purchaser and may result in a reduction in the concession per
Unit.
+The concession to Nuveen will be the applicable Dealer concession plus 0.10%.
See "Distributions of Units to the Public" in Part B of the Prospectus for
additional information on dealer concessions, volume incentives and secondary
market concessions.
------
5
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
(AT THE INITIAL DATE OF DEPOSIT, MARCH , 2000)
NUVEEN GLOBAL TELECOM FIVE-YEAR SECTOR PORTFOLIO, MARCH 2000
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE COST OF
TICKER OFFERING MARKET VALUE SECURITIES TO
NAME OF ISSUER OF SECURITIES(1) SYMBOL PRICE(1) PER SHARE PORTFOLIO(2)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
BELL REGIONALS
1. Bell Atlantic Corporation BEL
2. BellSouth Corporation BLS
3. SBC Communications, Inc. SBC
INDEPENDENTS
4. ALLTEL Corporation AT
5. CenturyTel, Inc. CTL
6. GTE Corporation GTE
INTERNATIONAL
7. Alcatel+ ALA
8. BCE, Inc.+ BCE
9. British Telecommunications PLC+ BTY
10. France Telecom S.A.+ FTE
11. KPN NV+ KPN
12. Nokia Corporation+ NOK
13. Nortel Networks Corporation+ NT
14. Telecom Italia SpA+ TI
15. Telefonaktiebolaget LM Ericsson+ ERICY
16. Telefonica S.A.+* TEF
17. Vodafone AirTouch PLC+ VOD
INTERNET SERVICES
18. Network Solutions, Inc.* NSOL
LONG DISTANCE
19. AT&T Corporation T
20. MCI WorldCom, Inc.* WCOM
21. Sprint Corporation FON
TELECOM/SOFTWARE SERVICES
22. Convergys Corporation* CVG
TELECOMMUNICATIONS EQUIPMENT
23. ADC Telecommunications, Inc.* ADCT
24. ADTRAN, Inc.* ADTN
25. Dycom Industries, Inc.* DY
26. E-Tek Dynamics, Inc.* ETEK
27. Inter-Tel, Inc. INTL
28. Lucent Technologies, Inc. LU
29. Motorola, Inc. MOT
30. QUALCOMM, Inc.* QCOM
31. Scientific-Atlanta, Inc. SFA
32. Symbol Technologies, Inc. SBL
33. Tellabs, Inc.* TLAB
TELECOMMUNICATIONS NETWORKING
34. 3Com Corporation* COMS
35. Broadcom Corporation* BRCM
36. Cisco Systems, Inc.* CSCO
37. Network Appliance, Inc.* NTAP
WIRELESS
38. United States Cellular Corporation* USM
------ --------
100% $ 0.01
====== ========
</TABLE>
- ---------------
(1) Based on Cost to Portfolio.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on March , 2000, the business day prior to the initial
date of deposit. The value of the Securities on any subsequent business day
will vary. Sponsor's loss on deposit of the securities was $ .
* Only these stocks currently pay dividends.
------------------------------
The securities were acquired on March , 2000 and are represented entirely by
contracts to purchase the securities. The Sponsor may have acted as underwriter,
manager or co-manager of a public offering of the securities in this Portfolio
during the last three years. Affiliates of the Sponsor may serve as specialists
in the securities in this Portfolio on one or more stock exchanges and may have
a long or short position in any of these securities or options on any of them,
and may be on the opposite side of public orders executed on the floor of an
exchange where the securities are listed. An officer, director or employee of
the Sponsor may be an officer or director of one or more of the issuers of the
securities in the Portfolio. The Sponsor may trade for its own account as an
odd-lot dealer, market maker, block positioner and/or arbitrageur in any of the
securities or in options on them. The Sponsor, its affiliates, directors,
elected officers and employee benefits programs may have either a long or short
position in any securities or in options on them.
------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY PROSPECTUS FOR
FUTURE PORTFOLIOS, THE PORTFOLIO WILL CONTAIN DIFFERENT STOCKS FROM THOSE
DESCRIBED ABOVE.
------
6
<PAGE>
How to Buy and Sell Units
INVESTING IN THE PORTFOLIO
The MINIMUM INVESTMENT is normally $1,000 or 100 Units, whichever is less.
However, for IRA purchases the minimum investment is $500 or the nearest whole
number of Units whose value is less than $500.
YOU CAN BUY UNITS FROM ANY PARTICIPATING DEALER.
As of March , 2000, the Initial Date of Deposit, the PER UNIT PUBLIC OFFERING
PRICE FOR THE PORTFOLIO IS $10.00. As described above, Units are subject to an
upfront sales charge that is equal to the difference between the total maximum
sales charge of 4.50% of the Public Offering Price and the remaining deferred
sales charges. If the Portfolio has any remaining deferred sales charges, you
will also pay those charges. The Public Offering Price includes the initial
sales charge and the estimated organization cost of $0. per Unit (to which
no sales charge is applied). The Public Offering Price changes every day with
changes in the price of the securities. As of the close of business on March ,
2000, the number of Units of the Portfolio may be adjusted so that the per Unit
Public Offering Price will equal $10.00.
If you are buying Units with assets received from the redemption or termination
of another unit trust with a similar investment strategy, you will pay a reduced
sales charge of $0.35 per Unit. Such purchases entitled to this sales charge
reduction may be classified as "Rollover Purchases."
Wrap Account Purchases and certain other investors described in Part B of the
Prospectus, may buy Units with a sales charge equal to 1% of the Public Offering
Price. If you choose, your Wrap Account Purchases may be made with the Wrap
CUSIP option which means that all distributions (other than the liquidation
distribution) from such Units will automatically be invested in additional Units
of the Portfolio and will be subject to any remaining deferred sales charges.
The Portfolio securities are valued by the Evaluator, The Chase Manhattan Bank,
generally on the basis of their closing sales prices on the applicable national
securities exchange or The Nasdaq Stock Market, Inc. every business day.
The Sponsor intends to periodically create additional Units of the Portfolio.
See "Defined Portfolio" and "Composition of Trust" in Part B of the Prospectus
for more details.
See "Public Offering Price" and "Market for Units" in Part B for additional
information.
SALES OR REDEMPTIONS
Units may be redeemed by the Trustee, The Chase Manhattan Bank, on any business
day at their current market value. Unitholders who purchase at least 3,000 Units
or whose Units are worth at least $30,000 may elect to receive an in-kind
distribution of the underlying stocks, rather than cash, if the election is made
at least five business days prior to the Portfolio's termination.
Although not obligated to do so, the Sponsor may maintain a market for Units and
offer to repurchase the Units at prices based on their current market value. If
a secondary market is not maintained, a Unitholder may still redeem Units
through the Trustee.
During the initial offering period, the price at which the Trustee will redeem
Units and the price at which the Sponsor may repurchase Units include estimated
organization costs. After such period, the amount paid will not include such
estimated organization costs but will be reduced by the costs of liquidating
securities to meet the redemption.
Any applicable deferred sales charges remaining on Units at the time of their
sale or redemption will be collected at that time.
See "Redemption" and "Market for Units" in Part B of the Prospectus for details.
Risk Factors
YOU CAN LOSE MONEY BY INVESTING IN A PORTFOLIO. Your investment is at risk
primarily because of:
- - MARKET RISK
Market risk is the risk that a particular stock in the Portfolio, the
Portfolio itself or stocks in general may fall in value. Market value may be
affected by a variety of factors including:
-- General stock market movements;
-- Changes in the financial condition of an issuer or an industry;
-- Changes in perceptions about an issuer or an industry;
-- Interest rates and inflation;
-- Governmental policies and litigation; and
-- Purchases and sales of securities by the Portfolio.
------
7
<PAGE>
- - INFLATION RISK
Inflation risk is the risk that the value of assets or income from
investments will be less in the future as inflation decreases the value of
money.
- - CONCENTRATION RISK
When stocks in a particular industry make up 25% or more of the Portfolio, it
is said to be "concentrated" in that industry, which makes the Portfolio less
diversified and subject to more market risk. The Portfolio is concentrated in
securities of the global telecommunications industry. Please be aware that
the industry predictions contained in the Prospectus may not materialize, and
that the companies selected for the Portfolio do not represent the entire
industry and the Portfolio may not participate in the expected over-all
industry growth. See "Sector Description" on page 3 above.
- - FOREIGN RISKS
Certain of the securities included in the Portfolios are American Depositary
Receipts ("ADRs") of foreign companies. ADRs are denominated in U.S. dollars
and are typically issued by a U.S. bank or trust company. An ADR evidences
ownership of an underlying foreign security. The terms and conditions of the
depositary facility may result in less liquidity or lower market prices for
the ADRs than for the underlying shares.
Foreign securities present risks beyond securities of U.S. issuers. Foreign
companies may be affected by:
-- adverse political, diplomatic and economic developments;
-- changes in foreign currency exchange rates;
-- exchange controls or other government restrictions on the payment of
dividends; and
-- taxes, absence of uniform accounting and reporting standards and less
publicly available information.
Distributions
INCOME DISTRIBUTIONS
Cash dividends received by the Portfolio, net of expenses, will be paid each
June 30 and December 31 ("Income Distribution Dates"), beginning ,
2000, to Unitholders of record on the 15th of those months ("Income Record
Dates").
CAPITAL DISTRIBUTIONS
Distribution of funds in the Capital Account, net of expenses and charges, will
be made on the last day of each month to Unitholders of record on the 15th of
that month if the amount available for distribution equals at least $1.00 per
100 Units, and when the Portfolio terminates.
See "Distributions To Unitholders" in Part B of the Prospectus for more details.
General Information
TERMINATION
Commencing on or shortly before , 2005, the Mandatory Termination Date,
the securities in the Portfolio will begin to be sold as prescribed by the
Sponsor. The Trustee will provide written notice of the termination to
Unitholders which will specify when certificates may be surrendered.
Unitholders will receive a cash distribution within a reasonable time after the
Portfolio terminates. However, Unitholders who purchase at least 3,000 Units or
whose Units are worth $30,000 may elect to receive an in-kind distribution of
the underlying stocks if the election is made at least five business days prior
to the Portfolio's termination. See "Distributions to Unitholders" and "Other
Information--Termination of Indenture" in Part B of the Prospectus for more
details.
THE SPONSOR
The Sponsor, Merrill Lynch, Pierce, Fenner & Smith Incorporated, is a
wholly-owned subsidiary of Merrill Lynch & Co., Inc. The Sponsor, or one of its
predecessor corporations, has acted as Sponsor of a number of series of unit
investment trusts and as principal underwriter and managing underwriter of other
investment companies. The Sponsor, in addition to participating as a member of
various selling groups or as agent of other investment companies, executes
orders on behalf of investment companies for the purchase and sale of securities
of these companies and sells securities to these companies in its capacities as
broker or dealer in securities.
The Prospectus describes in detail the investment objectives, policies and risks
of the Portfolio. We invite you to discuss the contents with your financial
adviser, or you may call the Trustee at 800-257-8787 for additional information.
------
8
<PAGE>
OPTIONAL FEATURES
REINVESTMENT
Income and certain capital distributions from the Portfolio can be reinvested
into additional Units of the Portfolio. Distributions reinvested into the
Portfolio are subject to any remaining deferred sales charges. See
"Distributions to Unitholders" in Part B of the Prospectus for details.
ROLLOVER PORTFOLIOS
The Sponsor intends to create future portfolios that will invest in stocks in
the telecommunications industry. If these portfolios are available, you may be
able to reinvest into one of the portfolios at a reduced sales charge.
------
9
<PAGE>
- --------------------------------------------------------------------------------
Statement of Condition
AS OF MARCH , 2000
<TABLE>
<S> <C>
Trust Property
Investments--Contracts to purchase Securities(1)............ $
-----------
Total............................................... $
===========
Liability and Interest of Holders
Reimbursement of Sponsor for organization expenses(2)... $
-----------
Subtotal................................................ $
-----------
INTEREST OF HOLDERS OF UNITS OF FRACTIONAL
UNDIVIDED INTEREST OUTSTANDING:(3)
Cost to investors(4)...................................... $
Gross underwriting commissions and organization
expenses(5)(2)........................................... $
-----------
Subtotal................................................ $
-----------
Total............................................... $
===========
</TABLE>
- -------------
(1) Aggregate cost to the Portfolio of the securities listed under Schedule of
Investments determined by the Trustee at 4:00 p.m., Eastern time on March
, 2000. The contracts to purchase securities are collateralized by an
irrevocable letter of credit which has been issued by Bank, New York
Branch, in the amount of $ and deposited with the Trustee. The
amount of the letter of credit includes $ for the purchase of
securities.
(2) A portion of the Unit Price consists of securities in an amount sufficient
to pay all or a portion of the costs incurred in establishing the Portfolio.
These costs have been estimated at $1.05 per 1,000 Units. A distribution
will be made as of the close of the initial offering period to an account
maintained by the Trustee from which the organization expenses obligation of
the investors will be satisfied. If the actual organization costs exceed the
estimated aggregate amount shown above, the Sponsor will pay for this excess
amount.
(3) Because the value of securities at the evaluation time on the Initial Date
of Deposit may differ from the amounts shown in this statement of condition,
the number of Units offered on the Initial Date of Deposit will be adjusted
to maintain the $ per 1,000 Units offering price only for that day.
The Unit Price on any subsequent business day will vary.
(4) Aggregate public offering price computed on the basis of the value of the
underlying securities at 4:00 p.m., Eastern time on March , 2000.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00% of the
Unit Price. A deferred sales charge of $0.07 per Unit is payable on
, 2000, and thereafter on the last business day of each month
through , 2001. Distributions will be made to an account maintained
by the Trustee from which the deferred sales charge obligation of the
investors to the Sponsor will be satisfied.
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Report of Independent Accountants
The Sponsor, Trustee and Holders of Nuveen Global Telecom Five-Year Sector
Portfolio (the "Portfolio"):
We have audited the accompanying statement of condition and the related Schedule
of Investments included in the prospectus of the Portfolio as of March , 2000.
This financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Portfolio as of March ,
2000 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
March , 2000
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12
<PAGE>
Nuveen Global Telecom
Five-Year Sector Portfolio,
March 2000
Prospectus Part B dated March , 2000
- --------------------------------------------------------------------------------
THIS PROSPECTUS IS DIVIDED INTO TWO PARTS. PART A OF THE PROSPECTUS PROVIDES
SPECIFIC INFORMATION ABOUT THE PORTFOLIO (REFERRED TO IN THIS PART B AS THE
"TRUST") INCLUDING ITS STRATEGIES, INVESTMENT OBJECTIVES, EXPENSES, FINANCIAL
HIGHLIGHTS, INCOME AND CAPITAL DISTRIBUTIONS, RISK FACTORS AND OPTIONAL
FEATURES. PART B OF THE PROSPECTUS PROVIDES MORE GENERAL INFORMATION REGARDING
THE TRUST. YOU SHOULD READ BOTH PARTS OF THE PROSPECTUS AND RETAIN THEM FOR
FUTURE REFERENCE.
Additional information about the Trust is provided in the Information
Supplement. You can receive an Information Supplement by calling The Chase
Manhattan Bank (the "Trustee") at (800) 257-8787.
THE PORTFOLIO
The Trust consists of a portfolio of Securities of companies described in
Part A of the Prospectus (see "Schedule of Investments" in Part A of the
Prospectus for a list of the Securities included in the Trust).
REDEEMABLE UNITS. Units of the Trust are redeemable at the offices of the
Trustee at prices based upon the aggregate underlying value of the Securities
(generally determined by the closing sale prices of listed Securities and the
bid prices of over-the-counter traded Securities). During the period ending with
the earlier of six months after the Initial Date of Deposit or the end of the
initial offering period, the Redemption Price per Unit includes estimated
organization costs per Unit. After such period, the Redemption Price will not
include such estimated organization costs. See "RISK/RETURN SUMMARY--FEES AND
EXPENSES" in Part A of the Prospectus for the organization costs and see
"REDEMPTION" herein for a more detailed discussion of redeeming your Units.
DIVIDEND AND CAPITAL DISTRIBUTIONS. Cash dividends received by the Trust
will be paid on those dates set forth under "DISTRIBUTIONS" in Part A of the
Prospectus. Distributions of funds in the Capital Account, if any, will be made
as part of the final liquidation distribution, if applicable, and in certain
circumstances, earlier. See "DISTRIBUTIONS TO UNITHOLDERS."
PUBLIC OFFERING PRICE. Public Offering Price of the Trust during the
Initial Offering Period is based upon the aggregate underlying value of the
Securities in the Trust's portfolio (generally determined by the closing sale
prices of the listed Securities and the ask prices of over-the-counter traded
Securities) plus or minus cash, if any, in the Income and Capital Accounts of
the Trust, plus a sales charge as set forth in Part A of the Prospectus and is
rounded to the nearest cent. The Public Offering Price during the period ending
with the earlier of six months after the Initial Date of Deposit or the end of
the initial offering period also includes organization costs incurred in
establishing the Trust. These costs will be deducted from the assets of the
Trust as of the close of such period. See "RISK/RETURN SUMMARY--FEES AND
EXPENSES" in Part A of the Prospectus. For Units purchased in the secondary
market, the Public Offering Price is based upon the aggregate underlying value
of the Securities in the Trust (generally determined by the closing sale prices
of the listed Securities and the bid prices of over-the-counter traded
Securities) plus the applicable sales charges. A pro rata share of accumulated
dividends, if any, in the Income Account from the preceding Record Date to, but
not including, the settlement date (normally three business days after purchase)
is added to the Public Offering Price. (See "PUBLIC OFFERING PRICE.")
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINED PORTFOLIO........................................... 3
COMPOSITION OF TRUST........................................ 4
PUBLIC OFFERING PRICE....................................... 5
MARKET FOR UNITS............................................ 7
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT..... 7
TAXES....................................................... 8
RETIREMENT PLANS............................................ 9
TRUST OPERATING EXPENSES.................................... 9
DISTRIBUTIONS TO UNITHOLDERS................................ 10
REPORTS TO UNITHOLDERS...................................... 11
UNIT VALUE AND EVALUATION................................... 11
DISTRIBUTIONS OF UNITS TO THE PUBLIC........................ 12
OWNERSHIP AND TRANSFER OF UNITS............................. 13
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES....... 14
REDEMPTION.................................................. 14
PURCHASE OF UNITS BY THE SPONSOR............................ 16
REMOVAL OF SECURITIES FROM THE TRUST........................ 16
INFORMATION ABOUT THE TRUSTEE............................... 17
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE........... 17
SUCCESSOR TRUSTEES AND SPONSORS............................. 17
INFORMATION ABOUT THE SPONSOR...............................
INFORMATION ABOUT THE EVALUATOR.............................
OTHER INFORMATION........................................... 18
LEGAL OPINION............................................... 18
AUDITORS.................................................... 18
SUPPLEMENTAL INFORMATION.................................... 19
</TABLE>
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DEFINED PORTFOLIO
The Trust was created under the laws of the State of New York pursuant to a
Trust Indenture dated the Initial Date of Deposit (the "INDENTURE") between
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "SPONSOR") and The Chase
Manhattan Bank (the "TRUSTEE").
The Sponsor has deposited with the Trustee contracts for the purchase of the
securities of the companies described in Part A of the Prospectus, together with
funds represented by an irrevocable letter of credit issued by a major
commercial bank in the amount required for their purchase (or the securities
themselves). See "SCHEDULE OF INVESTMENTS" in Part A of the Prospectus, for a
description of the Securities deposited. See also, "RISK/RETURN SUMMARY" and
"RISK FACTORS" in Part A of the Prospectus. As used herein, the term
"Securities" means the Securities (including contracts for the purchase thereof)
initially deposited in the Trust and described in the related portfolio and any
additional equity securities that may be held by the Trust.
The Trustee has delivered to the Sponsor registered Units which represent
ownership of the entire Trust, and which are offered for sale by this
Prospectus. Each Unit represents a fractional undivided interest in the
Securities deposited in the Trust. Units may only be sold in states in which
they are registered. To the extent that any Units of the Trust are redeemed by
the Trustee, the aggregate value of the Trust's assets will decrease by the
amount paid to the redeeming Unitholder, but the fractional undivided interest
of each unredeemed Unit in such Trust will increase proportionately. The Sponsor
will initially, and from time to time thereafter, hold Units in connection with
their offering.
Additional Units of the Trust may be issued from time to time following the
Initial Date of Deposit by depositing in the Trust additional Securities (or
contracts) or cash (including a letter of credit) with instructions to purchase
additional Securities in the Trust. As additional Units are issued by the Trust
as a result of the deposit of additional Securities or cash by the Sponsor, the
aggregate value of the Securities will be increased and the fractional undivided
interest in the Trust represented by each Unit will be decreased. The Sponsor
may continue to make additional deposits of Securities, or cash with
instructions to purchase additional Securities, into the Trust following the
Initial Date of Deposit, provided that such additional deposits will be in
amounts which will maintain, within reasonable parameters, the same original
proportionate relationship among the Securities in such Trust established on the
Initial Date of Deposit. Thus, although additional Units will be issued, each
Unit will continue to represent the same proportionate amount of each Security.
To the extent that any Units are redeemed by the Trustee or additional Units are
issued as a result of additional Securities or cash being deposited by the
Sponsor, the fractional undivided interest in the Trust represented by each
unredeemed Unit will decrease or increase accordingly, although the actual
interest in such Trust represented by such fraction will remain unchanged. If
the Sponsor deposits cash, however, existing and new investors may experience a
dilution of their investment and a reduction in their anticipated income because
of fluctuations in the price of the Securities between the time of the cash
deposit and the purchase of the Securities and because the Trust will pay the
associated brokerage fees. To minimize this effect, the Trust will try to
purchase the Securities as close to the evaluation time or as close to the
evaluation price as possible. Units will remain outstanding until redeemed upon
tender to the Trustee by Unitholders, which may include the Sponsor, or until
termination of the Indenture.
The Sponsor may realize a profit (or sustain a loss) as of the opening of
business on the Initial Date of Deposit resulting from the difference between
the purchase prices of the Securities and the cost of such Securities to the
Trust, which is based on the evaluation of the Securities as of the opening of
business on the Initial Date of Deposit. (See "SCHEDULE OF INVESTMENTS" in
Part A of the Prospectus.) The Sponsor may also be considered to have realized a
profit or to have sustained a loss, as the case may be, in the amount of any
difference between the cost of the Securities to the Trust (which is based on
the Evaluator's determination of the aggregate value of the underlying
Securities of the Trust) on the subsequent date(s) of deposit and the cost of
such Securities to the Sponsor, if applicable.
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<PAGE>
COMPOSITION OF TRUST
The Trust initially consists of contracts to purchase Securities as are
listed under "SCHEDULE OF INVESTMENTS" in Part A of this Prospectus and,
thereafter, of such Securities as may continue to be held from time to time
(including certain Securities deposited in the Trust to create additional Units
or in substitution for Securities not delivered to the Trust).
LIMITED REPLACEMENT OF CERTAIN SECURITIES. Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
Security. In the event of a failure to deliver any Security that has been
purchased for the Trust under a contract, including those Securities purchased
on a when, as and if issued basis ("FAILED SECURITIES"), the Sponsor is
authorized under the Indenture to direct the Trustee to acquire other specified
Securities ("REPLACEMENT SECURITIES") to make up the original corpus of the
Trust within 20 days after delivery of notice of the failed contract and the
cost to the Trust may not exceed the amount of funds reserved for the purchase
of the Failed Securities.
If the right of limited substitution described in the preceding paragraph is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to Failed
Securities to all Unitholders of the Trust and the Trustee will distribute the
principal attributable to such Failed Securities not more than 120 days after
the date on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unitholders should be aware that, at the time of receipt of such principal, they
may not be able to reinvest such proceeds in other securities with equivalent
growth potential at a comparable price.
The Indenture also authorizes the Sponsor to increase the size of the Trust
and the number of Units thereof by the deposit of additional Securities in the
Trust or cash (including a letter of credit) with instructions to purchase
additional Securities in the Trust and the issuance of a corresponding number of
additional Units. If the Sponsor deposits cash, however, existing and new
investors may experience a dilution of their investment and a reduction in their
anticipated income because of fluctuations in the prices of the Securities
between the time of the cash deposit and the purchase of the Securities and
because the Trust will pay the associated brokerage fees.
SALE OF SECURITIES. Certain of the Securities may from time to time under
certain circumstances be sold. The proceeds from such events will be used to pay
for expenses or for Units redeemed or distributed to Unitholders and not
reinvested; accordingly, no assurance can be given that a Trust will retain for
any length of time its present size and composition.
Whether or not the Securities are listed on a securities exchange, the
principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Trust may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemptions and the value of
the Trust will be adversely affected if trading markets for the Securities are
limited or absent. THERE CAN BE NO ASSURANCE THAT THE TRUST OR, IF APPLICABLE,
SUCCESSIVE TRUSTS THAT EMPLOY THE SAME OR A SIMILAR INVESTMENT STRATEGY, WILL
ACHIEVE THEIR INVESTMENT OBJECTIVES.
YEAR 2000 PROBLEM. Like other investment companies, financial and business
organizations and individuals around the world the Trust could be adversely
affected if the computer systems used by the Sponsor or Trustee or other service
providers to the Trust do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 Problem." The Sponsor and Trustee have taken steps that they
believe are reasonably designed to address the Year 2000 Problem with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps have been taken by the Trust's other service providers. At this
time, however, there can be no assurance that these steps will be sufficient to
avoid any adverse impact to a Trust.
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<PAGE>
The Year 2000 Problem may impact corporations and other parties, which may
include issuers of the Securities contained in the Trust, to varying degrees
based upon various factors, including, but not limited to, their industry sector
and degree of technological sophistication. The Sponsor is unable to predict
what impact, if any, the Year 2000 Problem will have on issuers of the
Securities contained in a Trust. Foreign issuers are believed to be exposed to
greater risk by the Year 2000 Problem than domestic issuers.
LEGISLATION. At any time after the Initial Date of Deposit, legislation may
be enacted, with respect to the Securities in a Trust or the issuers of the
Securities. Changing approaches to regulation may have a negative impact on
certain companies represented in the Trust. There can be no assurance that
future legislation, regulation or deregulation will not have a material adverse
effect on the Trust or will not impair the ability of the issuers of the
Securities to achieve their business goals.
Unitholders will be unable to dispose of any of the Securities in the Trust
and will not be able to vote the Securities. As the holder of the Securities,
the Trustee will have the right to vote all of the voting stocks in the Trust
and will vote such stocks in accordance with the instructions of the Sponsor.
LITIGATION. Except as provided in Part A of the Prospectus, to the best
knowledge of the Sponsor, there is no litigation pending as of the Initial Date
of Deposit in respect of any Securities which might reasonably be expected to
have a material adverse effect on the Trust. It is possible that after the
Initial Date of Deposit, litigation may be initiated with respect to Securities
in the Trust or current litigation may have unexpected results. The Sponsor is
unable to predict whether any litigation may have such results or may be
instituted, or if instituted, whether any litigation might have a material
adverse effect on the Trust.
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is based on the aggregate underlying
value of the Securities in the Trust (generally determined by the closing sale
prices of listed Securities and the ask prices of over-the-counter traded
Securities), plus or minus cash, if any, in the Income and Capital Accounts of
the Trust, plus an initial sales charge equal to the difference between the
maximum sales charge (as set forth in Part A of the Prospectus) per Unit and the
maximum remaining deferred sales charge (as set forth in Part A of the
Prospectus) and is rounded to the nearest cent. In addition, a portion of the
Public Offering Price during the initial offering period also consists of
Securities in an amount sufficient to pay for all or a portion of the costs
incurred in establishing the Trust, including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and states, the
initial audit of the Trust portfolio, the initial evaluation, legal fees, the
initial fees and expenses of the Trustee and any non-material out-of-pocket
expenses.
The Securities purchased with the portion of the Public Offering Price
intended to be used to reimburse the Sponsor for the Trust's organization costs
will be purchased in the same proportionate relationship as all the Securities
contained in the Trust. Securities will be sold to reimburse the Sponsor for the
Trust's organization costs at the end of the initial offering period (a shorter
time period than the life of the Trust). 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 the Trust organization costs, the Trustee will sell additional Securities to
allow the Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit 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 amount per Unit set forth for the Trust in
"STATEMENT OF CONDITION," this will result in a greater effective cost per Unit
to Unitholders for the reimbursement to the Sponsor. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell such
Securities to an extent which will maintain the same proportionate relationship
among the Securities contained in the Trust as existed prior to such sale. See
"RISK/RETURN SUMMARY--FEES AND EXPENSES" in Part A of the Prospectus.
Commencing on the date set forth under "RISK/RETURN SUMMARY--FEES AND
EXPENSES" in Part A of this Prospectus, a deferred sales charge in an amount
described in Part A of the Prospectus will be assessed per Unit per applicable
month. The deferred sales charges will be paid from funds in the Capital
Account, if
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<PAGE>
sufficient, or from the periodic sale of Securities. A pro rata share of
accumulated dividends, if any, in the Income Account from the preceding Record
Date to, but not including, the settlement date (normally three business days
after purchase) is added to the Public Offering Price. The total maximum sales
charge assessed to Unitholders on a per Unit basis will be the amount set forth
in "RISK/RETURN SUMMARY--FEES AND EXPENSES" in Part A of the Prospectus. See
"UNIT VALUE AND EVALUATION."
The sales charge applicable to quantity purchases is reduced on a graduated
scale as set forth in Part A of this Prospectus. For "secondary market" sales,
the Public Offering Price is based on the aggregate underlying value of the
Securities in the Trust (generally determined by the closing sale prices of
listed Securities and the bid prices of over-the-counter traded Securities),
plus or minus cash, if any, in the Income and Capital Accounts of the Trust,
plus an initial sales charge equal to the difference between the maximum sales
charge and any remaining deferred sales charges. The maximum sales charge for
certain trusts is described in Part A of the Prospectus. See "UNIT VALUE AND
EVALUATION."
At all times while Units are being offered for sale, the Trustee will
appraise or cause to be appraised daily the value of the underlying Securities
in the Trust as of 4:00 p.m. eastern time, or as of any earlier closing time on
a day on which the New York Stock Exchange (the "EXCHANGE") is scheduled in
advance to close at such earlier time and will adjust the Public Offering Price
of the Units commensurate with such appraisal ("Evaluation Time"). Such Public
Offering Price will be effective for all orders received by a dealer or the
Sponsor at or prior to 4:00 p.m. eastern time on each such day or as of any
earlier closing time on a day on which the Exchange is scheduled in advance to
close at such earlier time. Orders received after that time, or on a day when
the Exchange is closed for a scheduled holiday or weekend, will be held until
the next determination of price.
The graduated sales charges for the primary offering period set forth in the
table provided in Part A of this Prospectus will apply on all applicable
purchases of Units on any one day by the same purchaser in the amounts stated,
and for this purpose purchases of a Trust will be aggregated with concurrent
purchases of any other unit investment trust sponsored or distributed by Nuveen
with respect to the purchase of which a sales charge is imposed. Purchases by or
for the account of individuals and their spouses, parents, children,
grandchildren, grandparents, parents-in-law, sons- and daughters-in-law,
siblings, a sibling's spouse and a spouse's siblings ("immediate family
members") will be aggregated to determine the applicable sales charge. The
graduated sales charges are also applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account.
Unitholders of other unit investment trusts having a similar strategy as the
Trust may utilize their termination proceeds to purchase Units of the Trust with
the sales charge applicable for "Rollover Purchases" as provided in "HOW TO BUY
AND SELL UNITS" in Part A of the Prospectus. The dealer concession for such
purchases will be that applicable to "Rollover Purchases."
Units may be purchased with the applicable reduced sales charge provided for
"Wrap Account Purchases" under "HOW TO BUY AND SELL UNITS" in Part A of the
Prospectus or herein by (1) investors who purchase Units through registered
investment advisers, certified financial planners and registered broker-dealers
who in each case either charge periodic fees for financial planning, investment
advisory or asset management services, or provide such services in connection
with the establishment of an investment account for which a comprehensive "wrap
fee" charge is imposed, (2) bank trust departments investing funds over which
they exercise discretionary investment authority and that are held in a
fiduciary, agency, custodial or similar capacity, (3) any person who for at
least 90 days, has been an officer, director or bona fide employee of any firm
offering Units for sale to investors, (4) officers and directors of bank holding
companies that make Units available directly or through subsidiaries or bank
affiliates, and (5) officers or directors and bona fide, full-time employees of
Nuveen or certain affiliates of Nuveen. Notwithstanding anything to the contrary
in this Prospectus, investors who purchase Units as described in this paragraph
will not receive sales charge reductions for quantity purchases.
Whether or not Units are being offered for sale, the Trustee will determine
or cause to be determined the aggregate value of the Trust as of 4:00 p.m.
eastern time: (i) on each June 30 or December 31 (or, if such date is not a
business day, the last business day prior thereto), (ii) on any day on which a
Unit is tendered for
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redemption (or the next succeeding business day if the date of tender is a
non-business day) and (iii) at such other times as may be necessary. For this
purpose, a "business day" shall be any day on which the Exchange is normally
open. (See "UNIT VALUE AND EVALUATION.")
MARKET FOR UNITS
During the initial public offering period, the Sponsor intends to offer to
purchase Units of the Trust at a price based upon the pro rata share per Unit of
the aggregate underlying value of the Securities in the Trust (generally
determined by the closing sale prices of listed Securities and the ask prices of
over-the-counter traded Securities). Afterward, although it is not obligated to
do so, the Sponsor may maintain a secondary market for Units of the Trust at its
own expense and continuously offer to purchase Units of the Trust at prices,
subject to change at any time, which are based upon the aggregate underlying
value of the Securities in the Trust (generally determined by the closing sale
prices of listed Securities and the bid prices of over-the-counter traded
Securities). During the initial offering period, the price at which the Sponsor
expects to repurchase Units (the "SPONSOR'S REPURCHASE PRICE") includes
estimated organization costs per Unit. After such period, the Sponsor's
Repurchase Price will not include such estimated organization costs but will be
reduced by the cost of liquidating Securities to meet redemptions. See
"RISK/RETURN SUMMARY--FEES AND EXPENSES" in Part A of the Prospectus.
UNITHOLDERS WHO WISH TO DISPOSE OF THEIR UNITS SHOULD INQUIRE OF THE TRUSTEE OR
THEIR BROKER AS TO THE CURRENT REDEMPTION PRICE. Units subject to a deferred
sales charge which are sold or tendered for redemption prior to such time as the
entire deferred sales charge on such Units has been collected will be assessed
the amount of the remaining deferred sales charge at the time of sale or
redemption.
In connection with its secondary market making activities, the Sponsor may
from time to time enter into secondary market joint account agreements with
other brokers and dealers. Pursuant to these agreements, the Sponsor will
generally purchase Units from the broker or dealer at the Redemption Price (as
defined in "REDEMPTION") and will place the Units into a joint account managed
by the Sponsor; sales from the account will be made in accordance with the then
current prospectus and the Sponsor and the broker or dealer will share profits
and losses in the joint account in accordance with the terms of their joint
account agreement.
In maintaining a market for the Units, the Sponsor will realize profits or
sustain losses in the amount of any difference between the price at which Units
are purchased and the price at which Units are resold or redeemed. The secondary
market Public Offering Price of Units may be greater or less than the cost of
such Units to the Sponsor.
Certificates, if any, for Units are delivered to the purchaser as promptly
after the date of settlement (three business days after purchase) as the Trustee
can complete the mechanics of registration, normally within 48 hours after
registration instructions are received. Purchasers of Units to whom Certificates
are issued will be unable to exercise any right of redemption until they have
received their Certificates, properly endorsed for transfer. (See "REDEMPTION.")
EVALUATION OF SECURITIES AT THE INITIAL DATE OF DEPOSIT
The prices of the Securities deposited in the Trust included in Part A of
the Prospectus were determined by the Trustee.
The amount by which the Trustee's determination of the AGGREGATE VALUE of
the Securities deposited in the Trust was greater or less than the cost of such
Securities to the Sponsor was PROFIT or LOSS to the Sponsor. (See Part A of this
Prospectus.) The Sponsor also may realize FURTHER PROFIT OR SUSTAIN FURTHER LOSS
as a result of fluctuations in the Public Offering Price of the Units. Cash, if
any, made available to the Sponsor prior to the settlement date for a purchase
of Units, or prior to the acquisition of all Portfolio securities by the Trust,
may be available for use in the Sponsor's business, and may be of benefit to the
Sponsor.
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TAXES
The following summary describes some of the important income tax
consequences of holding Units. It assumes that you are not a dealer, financial
institution, insurance company or other investor with special circumstances or
subject to special rules. You should consult your own tax adviser about your
particular circumstances.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE TRUST AND YOUR INVESTMENT
The Trust will not be taxed as a corporation for federal income tax
purposes, and you will be considered to own directly your share of each Security
in the Trust.
You will be considered to receive your share of any dividends paid when
those dividends are received by the Trust regardless of when you receive
distributions and regardless of whether you reinvest your dividends in
additional Units of the Trust. Income from dividends will be taxed at ordinary
income rates. A portion of the dividend payment may be used to pay expenses of
the Trust. If you are a corporate investor, you may be eligible for the
dividends-received deduction if you satisfy the applicable holding period and
other requirements. You should consult your tax adviser in this regard.
GAIN OR LOSS UPON DISPOSITION
You will generally recognize gain or loss when you dispose of your Units for
cash (by sale or redemption), when you exchange your Units for units of another
trust or when the Trustee disposes of the Securities in the Trust. You generally
will not recognize gain or loss on an "in-kind" distribution to you of your
proportional share of the Trust's Securities, whether it is in redemption of
your Units or upon termination of the Trust. Your holding period for the
distributed Securities will include your holding period in your units.
If your net long-term capital gains exceed your net short-term capital
losses, the excess may be subject to tax at a lower rate than ordinary income.
Any capital gain or loss from the Trust will be long-term if you are considered
to have held your investment that produces the gain or loss for more than one
year and short-term otherwise. Because the deductibility of capital losses is
subject to limitations, you may not be able to deduct all of your capital
losses. You should consult your tax adviser in this regard.
YOUR TAX BASIS IN THE SECURITIES
Your aggregate tax basis in units that you have purchased for cash will be
equal to the cost of the Units, including the initial sales charge. You should
not increase your basis in your units by deferred sales charges or
organizational expenses. The tax reporting form and annual statements you
receive will be based on the net amounts paid to you, from which these expenses
will already have been deducted. Your basis for Securities distributed to you
will be the same as the portion of your basis in your Units that is attributable
to the distributed Securities and your holding period for the distributed
Securities will include your holding period in your Units.
EXPENSES
If you are an individual who itemizes deductions, you may deduct your share
of Trust expenses, but only to the extent that your share of the expenses,
together with your other miscellaneous deductions, exceeds 2% of your adjusted
gross income. Your ability to deduct Trust expenses will be limited further if
your adjusted gross income exceeds a specified amount, currently $128,950
($64,475 for a married person filing separately).
8
<PAGE>
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Trust will
not be taxed as a corporation, and the income of the Trust will be treated as
the income of the investors in the same manner as for federal income tax
purposes.
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will be subject to withholding tax at a rate of 30% (or
a lower applicable treaty rate) on your share of dividend income. You should
consult your tax adviser about the possible application of federal, state and
local, and foreign taxes.
RETIREMENT PLANS
You may wish to purchase Units for an Individual Retirement Account ("IRAs")
or other retirement plan. Generally, capital gains and income received in each
of these plans are exempt from federal taxation. All distributions from these
types of plans are generally treated as ordinary income but may, in some cases,
be eligible for tax-deferred rollover treatment. You should consult your
attorney or tax adviser about the specific tax rules relating to these plans.
These plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
TRUST OPERATING EXPENSES
Estimated annual Trust expenses are as set forth in Part A of this
Prospectus; if actual expenses are higher than the estimate, the excess will be
borne by the Trust. The estimated expenses do not include the brokerage
commissions and other transactional fees payable by the Trust in purchasing and
selling Securities.
No annual advisory fee is charged to the Trust by the Sponsor. The Sponsor
does, however, receive an annual fee as set forth in "RISK/RETURN SUMMARY--FEES
AND EXPENSES" in Part A of the Prospectus for supervising the Trust's portfolio
and for performing certain bookkeeping and administrative services for the
Trust. Legal, typesetting, electronic filing and regulatory filing fees and
expenses associated with updating the Trust's registration statement yearly are
chargeable to the Trust. While this fee may exceed the amount of these costs and
expenses attributable to the Trust, the total of these fees for all trusts
sponsored by the Sponsor will not exceed the aggregate amount attributable to
all such trusts for any calendar year.
The Trustee receives for ordinary recurring services an annual fee from the
Trust as set forth in "RISK/ RETURN SUMMARY--FEES AND EXPENSES" appearing in
Part A of this Prospectus. The Trustee's Fee may be periodically adjusted in
response to fluctuations in short-term interest rates (reflecting the cost to
the Trustee of advancing funds to a Trust to meet scheduled distributions). The
Trustee has the use of funds, if any, being held in the Income and Capital
Accounts of the Trust for future distributions, payment of expenses and
redemptions. These Accounts are non-interest bearing to Unitholders. Pursuant to
normal banking procedures, the Trustee benefits from the use of funds held
therein. Part of the Trustee's compensation for its services to the Trust is
expected to result from such use of these funds.
The Sponsor's supervisory, bookkeeping and administrative fee and the
Trustee's fee may be adjusted for inflation without Unitholders' approval.
The following are additional expenses of the Trust and, when paid by or are
owed to the Trustee, are secured by a lien on the assets of the Trust: (1) the
expenses and costs of any action undertaken by the Trustee to protect the Trust
and the rights and interests of the Unitholders; (2) all taxes and other
governmental charges upon the Securities or any part of the Trust (no such taxes
or charges are being levied or made or, to the knowledge of the Sponsor,
contemplated); (3) amounts payable to the Trustee as fees for ordinary recurring
services and for extraordinary non-recurring services rendered pursuant to the
Indenture, all disbursements and expenses, including counsel fees (including
fees of counsel which the Trustee may
9
<PAGE>
retain) sustained or incurred by the Trustee in connection therewith; and
(4) any losses or liabilities accruing to the Trustee without negligence, bad
faith or willful misconduct on its part. The expenses are paid monthly and the
Trustee is empowered to sell Securities in order to pay these amounts if funds
are not otherwise available in the Income and Capital Accounts.
Unless the Sponsor determines that an audit is not required, the Indenture
requires the Trust to be audited on an annual basis at the expense of the Trust
by independent public accountants selected by the Sponsor. Unitholders may
obtain a copy of the audited financial statements upon request.
DISTRIBUTIONS TO UNITHOLDERS
The Trustee will distribute any net income received with respect to any of
the Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Date. See "DISTRIBUTIONS"
in Part A of this Prospectus. Persons who purchase Units will commence receiving
distributions only after becoming a Record Owner. Notification to the Trustee of
the transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker/dealer.
Proceeds received on the sale of any Securities in the Trust, to the extent not
used to meet redemptions of Units, pay the deferred sales charge or pay expenses
will be distributed on the last day of each month if the amount available for
distribution equals at least $1.00 per 100 Units ("CAPITAL DISTRIBUTION DATES")
to Unitholders of record on the fifteenth day of each applicable month ("CAPITAL
RECORD DATES"). The Trustee is not required to pay interest on funds held in the
Capital Account of the Trust (but may itself earn interest thereon and therefore
benefit from the use of such funds). A Unitholder's pro rata portion of the
Capital Account, less expenses, will be distributed as part of the final
liquidation distribution.
It is anticipated that the deferred sales charge will be collected from the
Capital Account of the Trust and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. To the extent that
amounts in the Capital Account are insufficient to satisfy the then current
deferred sales charge obligation, Securities may be sold to meet such shortfall.
Distributions of amounts necessary to pay the deferred portion of the sales
charge will be made to an account designated by the Sponsor for purposes of
satisfying a Unitholder's deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by the
Trust if the Trustee has not been furnished with the Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder under certain circumstances by contacting the Trustee, otherwise
the amount may be recoverable only when filing a tax return. Under normal
circumstances, the Trustee obtains the Unitholder's tax identification number
from the selling broker. However, a Unitholder should examine his or her
statements from the Trustee to make sure that the Trustee has been provided a
certified tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided such
number, one should be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unitholder
will, upon surrender of his Units for redemption, receive (i) the pro rata share
of the amounts realized upon the disposition of Securities, unless he or she
elects an In-Kind Distribution as described under "REDEMPTION" and (ii) a pro
rata share of any other assets of the Trust, less expenses of the Trust.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Securities therein. All other receipts (E.G., return of capital,
etc.) are credited to the Capital Account.
The Trustee may establish reserves (the "RESERVE ACCOUNT") within the Trust
for state and local taxes, if any, and any governmental charges payable out of
the Trust.
DISTRIBUTION REINVESTMENT. Any Unitholder may elect to have each
distribution of income on his Units, other than the final liquidating
distribution in connection with the termination of the Trust, automatically
reinvested in additional Units of the Trust. Each person who purchases Units of
the Trust may elect to
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<PAGE>
participate in the reinvestment option by notifying the Trustee in writing of
their election. Reinvestment may not be available in all states. Notification to
the Trustee must be received within one year after the Initial Date of Deposit.
So long as the election is received by the Trustee at least 10 days prior to the
Record Date for a given distribution, each subsequent distribution of income
and/or capital, as selected by the Unitholder, will be automatically applied by
the Trustee to purchase additional Units of the Trust. The remaining deferred
sales charge payments will be assessed on Units acquired pursuant to
reinvestment. IT SHOULD BE REMEMBERED THAT FOR FEDERAL INCOME TAX PURPOSES, YOU
WILL BE CONSIDERED TO RECEIVE YOUR SHARE OF ANY DIVIDENDS PAID WHEN THOSE
DIVIDENDS ARE RECEIVED BY THE TRUST, EVEN IF YOU REINVEST YOUR DIVIDENDS IN
ADDITIONAL UNITS OF THE TRUST.
REPORTS TO UNITHOLDERS
The Trustee shall furnish Unitholders of a Trust in connection with each
distribution, a statement of the amount of income, if any, and the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit of a Trust outstanding. Within a reasonable period of time after the
end of each calendar year, the Trustee shall furnish to each person, who at any
time during the calendar year was a registered Unitholder of a Trust, a
statement that provides (1) a summary of transactions in the Trust for such
year; (2) any Security sold during the year and the Securities held at the end
of such year by the Trust; (3) the redemption price per Unit based upon a
computation thereof the 31st day of December of such year (or the last business
day prior thereto); and (4) amounts of income and capital distributed during
such year.
In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust.
UNIT VALUE AND EVALUATION
The value of the Trust is determined by the Trustee on the basis of (1) the
cash on hand in the Trust other than cash deposited in the Trust to purchase
Securities not applied to the purchase of such Securities; (2) the aggregate
value of the Securities held in the Trust, as determined by the Evaluator on the
basis of the aggregate underlying value of the Securities in the Trust next
computed; (3) dividends receivable on the Securities trading ex-dividend as of
the date of computation; and (4) all other assets of the Trust; and deducting
therefrom; (1) amounts representing any applicable taxes or governmental charges
and amounts due the Sponsor or Trustee for indemnification or extraordinary
expenses payable out of the Trust for which no deductions had been made for the
purpose of additions to the Reserve Account; (2) any amounts owing to the
Trustee for its advances; (3) an amount representing estimated accrued expenses
of the Trust, including, but not limited to, unpaid fees and expenses of the
Trustee (including legal fees) and the Sponsor; (4) amounts representing unpaid
organization costs; (5) cash held for distribution to Unitholders of record of
the Trust or for redemption of tendered Units as of the business day prior to
the evaluation being made; and (6) other liabilities incurred by the Trust. The
result of such computation is divided by the number of Units of the Trust
outstanding as of the date thereof and rounded to the nearest cent to determine
the per Unit value ("UNIT VALUE") of the Trust. The Trustee may determine the
aggregate value of the Securities in the Trust in the following manner: if the
Securities are listed on a securities exchange or The NASDAQ Stock Market, Inc.
("listed Securities"), this evaluation is generally based on the closing sale
price on that exchange or that system (if a listed Security is listed on the New
York Stock Exchange ("NYSE") the closing sale price on the NYSE shall apply) or,
if there is no closing sale price on that exchange or system, at the mean
between the closing bid and asked prices. If the Securities are not so listed,
or, if so listed and the principal market therefor is other than on that
exchange or systems, the evaluation shall generally be based on the current bid
prices on the over-the-counter market (unless it is determined that these prices
are inappropriate as a basis for valuation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of current
bid prices for comparable securities, (b) by appraising the value of the
Securities on the bid side of the market or (c) by any combination of the above.
With respect to any Security not listed on a national exchange or The NASDAQ
Stock Market, Inc. or, with respect to a Security so listed but the Trustee
deems the closing sale price on the relevant exchange to be
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<PAGE>
inappropriate as a basis for valuation, upon the Trustee's request, the Sponsor
shall, from time to time, designate one or more evaluation services or other
sources of information on which the Trustee shall be authorized conclusively to
rely in evaluating such Security, and the Trustee shall have no liability for
any errors in the information so received. The cost thereof shall be an expense
reimbursable to the Trustee from the Income and Capital Accounts.
DISTRIBUTIONS OF UNITS TO THE PUBLIC
Nuveen is the sole Underwriter of the Units. It is intended that Units of
the Trust be qualified for sale under the laws of substantially all of the
states of the United States of America.
To facilitate the handling of transactions, sales of Units shall be limited
to transactions involving a minimum of either $1,000 or 100 Units ($500 or
nearest whole number of Units whose value is less than $500 for IRA purchases),
whichever is less. The Sponsor reserves the right to reject, in whole or in
part, any order for the purchase of Units.
The Sponsor plans to allow a discount to brokers and dealers in connection
with the distribution of Units. The amounts of such discounts are set forth in
Part A of this Prospectus.
The Sponsor may maintain a secondary market for Units of the Trust. See
"MARKET FOR UNITS."
The Sponsor reserves the right to change the amount of the dealer
concessions set forth in Part A of this Prospectus from time to time.
For Units purchased during the initial offering period by Unitholders who
utilize redemption or termination proceeds from other unit investment trusts and
receive the sales charge applicable for "Rollover Purchases" as described in
Part A of the Prospectus, dealers are entitled to receive the concession
applicable for "Rollover Purchases" as provided in Part A of the Prospectus.
Initially, the Sponsor plans to allow a concession to Nuveen of 3.60% from
which Nuveen plans to allow a concession to selling dealers in the secondary
market of 3.5% of the Public Offering Price for non-breakpoint purchases of
Units in a given transaction. The concession paid to Nuveen and to dealers is
reduced or eliminated in connection with Units sold in transactions to investors
that receive reduced sales charges based on the number of Units sold or in
connection with Units sold in Wrap and Trust Account Purchases and to other
investors entitled to the sales charge reduction applicable for Wrap and Trust
Account Purchases as provided in "PUBLIC OFFERING PRICE," as show below.
<TABLE>
<CAPTION>
DEALER
CONCESSION
PER UNIT+
NUMBER OF UNITS* ----------
<S> <C>
Less than 5,000............................................. 3.50%
5,000 to 9,999.............................................. 3.25%
10,000 to 24,999............................................ 3.00%
25,000 to 49,999............................................ 2.50%
50,000 to 99,999............................................ 1.50%
100,000 or more............................................. 0.75%
Rollover Purchases (per Unit) $ 0.25
Wrap and Trust Account Purchases............................ None
- ------------------------------------------------------------------------
* Sales charge reductions are computed both on a dollar basis and on
the basis of the number of Units purchased, using the equivalent of
5,000 Units to $50,000, 10,000 Units to $100,000 etc., and will be
applied on that basis which is more favorable to you and may result
in a reduction in the discount per Unit.
+ The concession to Nuveen will be the applicable dealer concession
plus 0.10%. Nuveen will also share in a portion of the sales charge
received by the Sponsor
</TABLE>
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<PAGE>
Volume incentives can be earned as a marketing allowance by Eligible Dealer
Firms who reach cumulative firm sales or sales arrangement levels of a specified
dollar amount of Nuveen unit trusts (other than any series of the Nuveen--The
Dow 5(SM) Portfolios and Nuveen--The Dow 10(SM) Portfolios) sold in the primary
or secondary market during any quarter as set forth in the table below. For
purposes of determining the applicable volume incentive rate for a given
quarter, the dollar amount of all units sold over the current and three previous
quarters (the "Measuring Period") is aggregated. The volume incentive received
by the dealer firm will equal the dollar amount of units sold during the current
quarter times the highest applicable rate for the Measuring Period. For firms
that meet the necessary volume level, volume incentives may be given on all
applicable trades originated from or by that firm.
<TABLE>
<CAPTION>
TOTAL DOLLAR AMOUNT SOLD
OVER MEASURING PERIOD VOLUME INCENTIVE
- -------------------------- ----------------
<S> <C>
$ 5,000,000 to $ 9,999,999 0.10% of current quarter sales
$10,000,000 to $19,999,999 0.125% of current quarter sales
$20,000,000 to $49,999,999 0.1375% of current quarter sales
$50,000,000 or more 0.15% of current quarter sales
</TABLE>
Only sales through Nuveen qualify for volume incentives and for meeting
minimum requirements. Nuveen reserves the right to modify or change the volume
incentive schedule at any time and make the determination as to which firms
qualify for the marketing allowance and the amount paid.
Firms are not entitled to receive any dealer concession or volume incentives
for any sales made to investors which qualified as Discounted Purchases (as
defined in "PUBLIC OFFERING PRICE") during the primary or secondary market. (See
"PUBLIC OFFERING PRICE.")
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in Part A
of the Prospectus under "DEALER CONCESSIONS." The Glass-Steagall Act prohibits
banks from underwriting Trust Units; the Act does, however, permit certain
agency transactions and banking regulators have not indicated that these
particular agency transactions are not permitted under the Act. In Texas and in
certain other states, any bank making Units available must be registered as a
broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by registered Certificates unless the
Unitholder expressly requests that ownership be evidenced by a book entry
position recorded on the books and records of the Trustee. The Trustee is
authorized to treat as the owner of Units that person who at the time is
registered as such on the books of the Trustee. Any Unitholder who holds a
Certificate may change to book entry ownership by submitting to the Trustee the
Certificate along with a written request that the Units represented by such
Certificate be held in book entry form. Likewise, a Unitholder who holds Units
in book entry form may obtain a Certificate for such Units by written request to
the Trustee. Units may be held in denominations of one Unit or any multiple or
fraction thereof. Fractions of Units are computed to three decimal places. Any
Certificates issued will be numbered serially for identification, and are issued
in fully registered form, transferable only on the books of the Trustee. Book
entry Unitholders will receive a Book Entry Position Confirmation reflecting
their ownership.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by Certificate(s), by presenting and surrendering
such Certificate(s) to the Trustee, The Chase Manhattan Bank, at 4 New York
Plaza, New York, NY 10004-2413, properly endorsed or accompanied by a written
instrument or instruments of transfer. The Certificate(s) should be sent
registered or certified mail for the protection of the Unitholders. Each
Unitholder must sign such written request, and such Certificate(s) or transfer
instrument, exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book Entry Position
Confirmation(s) relating to the Units to be transferred. Such signature(s) must
be guaranteed by a guarantor acceptable to the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or
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<PAGE>
administrator or certificates of corporate authority. Mutilated Certificates
must be surrendered to the Trustee in order for a replacement Certificate to be
issued. Although at the date hereof no charge is made and none is contemplated,
a Unitholder may be required to pay $2.00 to the Trustee for each Certificate
reissued or transfer of Units requested and to pay any governmental charge which
may be imposed in connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
REDEMPTION
Unitholders may redeem all or a portion of their Units by (1) making a
written request for such redemption (book entry Unitholders may use the
redemption form on the reverse side of their Book Entry Position Confirmation)
to the Trustee at 4 New York Plaza, New York, NY 10004-2413 (redemptions of
1,000 Units or more will require a signature guarantee), (2) in the case of
Units evidenced by a Certificate, by also tendering such Certificate to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signatures guaranteed as explained above, or provide satisfactory indemnity
required in connection with lost, stolen or destroyed Certificates and
(3) payment of applicable governmental charges, if any. Certificates should be
sent only by registered or certified mail to minimize the possibility of their
being lost or stolen. (See "OWNERSHIP AND TRANSFER OF UNITS.") No redemption fee
will be charged. A Unitholder may authorize the Trustee to honor telephone
instructions for the redemption of Units held in book entry form. Units
represented by Certificates may not be redeemed by telephone. The proceeds of
Units redeemed by telephone will be sent by check either to the Unitholder at
the address specified on his account or to a financial institution specified by
the Unitholder for credit to the account of the Unitholder. A Unitholder wishing
to use this method of redemption must complete a Telephone Redemption
Authorization Form and furnish the Form to the Trustee. Telephone Redemption
Authorization Forms can be obtained from a Unitholder's registered
representative or by calling the Trustee. Once the completed Form is on file,
the Trustee will honor telephone redemption requests by any authorized person.
The time a telephone redemption request is received determines the "date of
tender" as discussed below. The redemption proceeds will be mailed within three
business days following the telephone redemption request. Only Units held in the
name of individuals may be redeemed by telephone; accounts registered in broker
name, or accounts of corporations or fiduciaries (including among others,
trustees, guardians, executors and administrators) may not use the telephone
redemption privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern
time, or as of any earlier closing time on a day on which the Exchange is
scheduled in advance to close at such earlier time, on the date of tender as
defined hereafter ("REDEMPTION PRICE"). During the period ending with the
earlier of six months after the Initial Date of Deposit or the end of the
initial offering period, the price at which the Trustee will redeem Units and
the price at which the Sponsor may repurchase Units includes estimated
organization costs. After such period, the amount paid will not include such
estimated organization costs but will be reduced by the cost of liquidating
Securities to meet the redemption. See "RISK/RETURN SUMMARY--FEES AND EXPENSES"
in Part A of the Prospectus. The price received upon redemption may be more or
less than the amount paid by the Unitholder depending on the value of the
Securities on the date of tender. Units subject to a deferred sales charge which
are tendered for redemption prior to such time as the entire deferred sales
charge on such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of redemption. In addition, in the
event of the death of a Unitholder within the one-year period prior to
redemption, any deferred sales charge
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<PAGE>
remaining at the time of redemption shall be waived. Unitholders should check
with the Trustee or their broker to determine the Redemption Price before
tendering Units.
The "DATE OF TENDER" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that a
redemption request received after 4:00 p.m. eastern time, or as of any earlier
closing time on a day on which the Exchange is scheduled in advance to close at
such earlier time, or on any day on which the Exchange is normally closed, the
date of tender is the next day on which such Exchange is normally open for
trading and such request will be deemed to have been made on such day and the
redemption will be effected at the Redemption Price computed on that day.
Any Unitholder tendering a minimum of at least 3,000 Units of the Trust for
redemption or whose Units are worth $30,000 may request by written notice
submitted at the time of tender to the Trustee, in lieu of a cash redemption, a
distribution of shares of Securities in an amount and value of Securities per
Unit equal to the Redemption Price Per Unit, as determined as of the evaluation
next following tender, less any deferred sales charge remaining at the time of
redemption. In-kind distributions ("IN-KIND DISTRIBUTIONS") shall be made by the
Trustee through the distribution of each of the Securities in book-entry form to
the account of the Unitholder's bank or broker/dealer at the Depository Trust
Company. An In-Kind Distribution will be reduced by customary transfer and
registration charges. The tendering Unitholder will receive his pro rata number
of whole shares of each of the Securities comprising the Trust's portfolio and
cash from the Capital Account equal to the fractional shares to which the
tendering Unitholder is entitled. The Trustee may adjust the number of shares of
any issue of Securities included in a Unitholder's In-Kind Distribution to
facilitate the distribution of whole shares, such adjustment to be made on the
basis of the value of Securities on the date of tender. If funds in the Capital
Account are insufficient to cover the required cash distribution to the
tendering Unitholder, the Trustee may sell Securities in the manner described
below.
Under regulations issued by the Internal Revenue Service, the Trustee may be
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. For further
information regarding this withholding, see "DISTRIBUTIONS TO UNITHOLDERS." In
the event the Trustee has not been previously provided such number, one must be
provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn from
the Income Account of a Trust to the extent that funds are available for such
purpose, or from the Capital Account. All other amounts paid on redemption shall
be withdrawn from the Capital Account.
The Trustee is empowered to sell Securities of the Trust in order to make
funds available for redemption. To the extent that Securities are sold, the size
and diversity of the Trust will be reduced. Such sales may be required at a time
when Securities would not otherwise be sold and might result in lower prices
than might otherwise be realized.
The Redemption Price per Unit during the secondary market will be determined
on the basis of the Unit Value of the Trust. After the period ending with the
earlier of six months after the Initial Date of Deposit or the end of the
initial offering period, the Redemption Price will not include estimated
organization costs. See "RISK/RETURN SUMMARY--FEES AND EXPENSES" in Part A of
the Prospectus. See "UNIT VALUE AND EVALUATION" for a more detailed discussion
of the factors included in determining Unit Value. The Redemption Price per Unit
will be assessed the amount, if any, of the remaining deferred sales charge at
the time of redemption.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than for
customary weekend and holiday closings, or during which the Securities and
Exchange Commission determines that trading on the New York Stock Exchange is
restricted or any emergency exists, as a result of which disposal or evaluation
of the Securities is not reasonably practicable, or for such other periods as
the Securities and Exchange Commission may by order permit. Under certain
extreme circumstances, the Sponsor may apply to the Securities and Exchange
Commission for an order permitting a full or partial suspension of the right of
Unitholders to redeem their
15
<PAGE>
Units. The Trustee is not liable to any person in any way for any loss or damage
which may result from any such suspension or postponement.
PURCHASE OF UNITS BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption.
If the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "REDEMPTION.") The Sponsor's
current practice is to bid at the Redemption Price in the secondary market.
Units held by the Sponsor may be tendered to the Trustee for redemption as any
other Units.
REMOVAL OF SECURITIES FROM THE TRUST
The portfolio of the Trust is not "managed" by the Sponsor or the Trustee;
their activities described herein are governed solely by the provisions of the
Indenture. The Indenture provides that the Sponsor may (but need not) direct the
Trustee to dispose of a Security in the event that an issuer fails to declare a
regular dividend or defaults in the payment of a dividend that has been
declared, that any action or proceeding has been instituted restraining
declaration or the payment of dividends or there exists any legal question or
impediment affecting such Security, that the issuer of the Security has breached
a covenant which would affect the payments of dividends, the credit standing of
the issuer or otherwise impair the sound investment character of the Security,
that the issuer has defaulted on the payment on any other of its outstanding
obligations, that the price of the Security declined to such an extent or other
such market or credit factors exist so that in the opinion of the Sponsor, the
retention of such Securities would be detrimental to a Trust. Except as stated
in this Prospectus, the acquisition by the Trust of any securities or other
property other than the Securities is prohibited. Pursuant to the Indenture and
with limited exceptions, the Trustee may sell any securities or other property
acquired in exchange for Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
properties, the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee or held in the
Trust pursuant to the direction of the Sponsor. Proceeds from the sale of
Securities by the Trustee are credited to the Capital Account of the Trust for
distribution to Unitholders or to meet redemptions.
The Trustee may also sell Securities designated by the Sponsor, or if not so
directed, in its own discretion, for the purpose of redeeming Units of the Trust
tendered for redemption and the payment of expenses.
The Sponsor, in designating Securities to be sold by the Trustee, will
generally make selections in order to maintain, to the extent practicable, the
proportionate relationship among the number of shares of individual issues of
Securities. To the extent this is not practicable, the composition and diversity
of the Securities may be altered. In order to obtain the best price for the
Trust, it may be necessary for the Sponsor to specify minimum amounts (generally
100 shares) in which blocks of Securities are to be sold. The Sponsor may
consider sales of Units of unit investment trusts which it sponsors in making
recommendations to the Trustee as to the selection of broker/dealers to execute
the Trust's portfolio transactions.
INFORMATION ABOUT THE TRUSTEE
The Trustee is The Chase Manhattan Bank. Its address is 4 New York Plaza,
New York, NY 10004-2413. The Trustee is subject to supervision and examination
by the Federal Deposit Insurance Corporation, the Board of Governors of the
Federal Reserve System and either the Comptroller of the Currency or state
banking authorities.
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LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, but shall be liable only for their own negligence (gross
negligence in the case of the Sponsor), willful misfeasance, bad faith or
reckless disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee of
any of the Securities. In the event of the failure of the Sponsor to act under
the Indenture, the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Indenture or upon or in respect of the Trust which
the Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument
of resignation in writing and filing same with the Sponsor and mailing a copy of
a notice of resignation to all Unitholders then of record. Upon receiving such
notice, the Sponsor is required to promptly appoint a successor trustee. If the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent, or a
receiver or other public officer shall take charge of its property or affairs or
if under certain conditions the Sponsor determines in good faith that the
Trustee's replacement is in the best interests of Unitholders, the Sponsor may
remove the Trustee and appoint a successor by written instrument. The
resignation or removal of a trustee and the appointment of a successor trustee
shall become effective only when the successor trustee accepts its appointment
as such. Any successor trustee shall be a corporation authorized to exercise
corporate trust powers, having capital, surplus and undivided profits of not
less than $5,000,000. Any corporation into which a trustee may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which a trustee shall be a party, shall be the successor
trustee.
If upon resignation of a trustee no successor has been appointed and has
accepted the appointment within 30 days after notification, the retiring trustee
may apply to a court of competent jurisdiction for the appointment of a
successor.
If the Sponsor fails to undertake any of its duties under the Indenture, and
no express provision is made for action by the Trustee in such event, the
Trustee may, in addition to its other powers under the Indenture (1) appoint a
successor sponsor; (2) terminate the Indenture and liquidate the Trust or (3)
continue to act as Trustee without terminating the Indenture.
OTHER INFORMATION
AMENDMENT OF INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders (1) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent, or (2)
to make such other provisions as shall not adversely affect the Unitholders,
provided, however, that the Indenture may not be amended, without the consent of
100% of the Unitholders, to permit the deposit or acquisition of securities
either in addition to, or in substitution for any of the Securities initially
deposited in the Trust except as stated in "COMPOSITION OF TRUST" regarding the
creation of additional Units and the limited right of substitution of
Replacement Securities, except for the substitution of refunding securities
under certain circumstances or except as otherwise provided in this Prospectus.
The Trustee shall advise the Unitholders of any amendment requiring the consent
of Unitholders, or upon request of the Sponsor, promptly after execution
thereof.
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TERMINATION OF INDENTURE
The sale of Securities from the Trust upon termination may result in
realization of a lesser amount than might otherwise be realized if such sale
were not required at such time. For this reason, among others, the amount
realized by a Unitholder upon termination may be less than the amount of
Securities originally represented by the Units held by such Unitholder. The
Indenture will terminate upon the redemption, sale or other disposition of the
last Security held thereunder, but in no event shall it continue beyond the
Mandatory Termination Date set forth under "GENERAL INFORMATION--TERMINATION" in
Part A of this Prospectus. The Trust may be terminated if its value is less than
40% of the value of Securities when deposited in the Trust.
Commencing on or shortly before the Mandatory Termination Date, Securities
will begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of the
Securities. Written notice of the termination of a Trust specifying the time or
times at which Unitholders may surrender their certificates for cancellation
shall be given by the Trustee to each Unitholder at his address appearing on the
registration books of such Trust maintained by the Trustee. Unitholders not
electing a distribution of shares of Securities will receive a cash distribution
from the sale of the remaining Securities within a reasonable time after the
Trust is terminated. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances or
indemnities provided by the Indenture, including estimated compensation of the
Trustee and costs of liquidation and any amounts required as a reserve to
provide for payment of any applicable taxes or other governmental charges. The
Trustee will then distribute to each Unitholder his pro rata share of the
balance of the Income and Capital Accounts.
CODE OF ETHICS
The Trust and the Sponsor have each adopted a code of ethics requiring
reporting of personal securities transactions by its employees with access to
information on Trust transactions. Subject to certain conditions, the codes
permit employees to invest in Trust securities for their own accounts. The codes
are designed to prevent fraud, deception and misconduct against the Trust and to
provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this Prospectus.
LEGAL OPINION
The legality of the Units offered hereby has been passed upon by Davis Polk
& Wardwell, 450 Lexington Avenue, New York, New York 10017.
AUDITORS
The "STATEMENT OF CONDITION" and "SCHEDULE OF INVESTMENTS" at the Initial
Date of Deposit included in Part A of this Prospectus have been audited by
Deloitte & Touche LLP, independent public accountants, as indicated in their
report in Part A of this Prospectus, and are included herein in reliance upon
the authority of said firm as experts in giving said report.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about this Trust, which has
been filed with the Securities and Exchange Commission and is intended to
supplement information contained in Part A and Part B of this Prospectus. This
supplement includes additional general information about the Sponsor and the
Trust.
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19
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NUVEEN GLOBAL TELECOM FIVE-YEAR SECTOR PORTFOLIO
PROSPECTUS
MARCH , 2000
<TABLE>
<C> <S> <C>
Trustee The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
Telephone: 800-257-8787
</TABLE>
This Prospectus does not contain complete information about the Portfolio
filed with the Securities and Exchange Commission in Washington, DC under the:
Securities Act of 1933 (file no. 333-30680)
Investment Company Act of 1940 (file no. 811-3044)
To obtain copies at proscribed rates--
<TABLE>
<S> <C>
Write: Public Reference Section of the Commission, 450 Fifth Street
NW, Washington, DC 20549-6009
Call: (800) SEC-0330
Visit: http://www.sec.gov
</TABLE>
No person is authorized to give any information or representation about the
Portfolio not contained in Parts A or B of this Prospectus or the Information
Supplement and you should not rely on any other information.
When Units of the Portfolio are no longer available or for investors who
will reinvest into subsequent series of the Portfolio, this Prospectus may be
used as a preliminary Prospectus for a future series. If this is the case,
investors should note the following:
1. Information in this Prospectus is not complete and may be changed;
2. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective; and
3. This prospectus is not an offer to sell the securities of a future
series and is not soliciting an offer to buy such securities in any state
where the offer or sale is not permitted.
<PAGE>
PART II
Additional Information Not Included in the Prospectus
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
I. Bonding arrangements of the Depositor are incorporated by reference to
Item A of Part II to the Registration Statement on Form S-6 under the Securities
Act of 1933 for Municipal Investment Trust Fund, Monthly Payment Series--573
Defined Asset Funds (Reg. No. 333-08241).
II. The date of organization of the Depositor is set forth in Item B of
Part II to the Registration Statement on Form S-6 under the Securities Act of
1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241) and is herein incorporated by reference
thereto.
III. The Charter and By-Laws of the Depositor are incorporated herein by
reference to Exhibits 1.3 through 1.12 to the Registration Statement on Form S-6
under the Securities Act of 1933 for Municipal Investment Trust Fund, Monthly
Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositor has been
filed pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of
the Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filings indicated and made a part of this Registration Statement:
<TABLE>
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated......... 8-7221
</TABLE>
---------------------------------
B. The Internal Revenue Service Employer Identification Numbers of the
Sponsor and Trustee are as follows:
<TABLE>
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated......... 13-5674085
The Chase Manhattan Bank, Trustee.......................... 13-4994650
</TABLE>
UNDERTAKING
The Sponsor undertakes that it will not make any amendment to the Supplement
to this Registration Statement which includes material changes without
submitting the amendment for Staff review prior to distribution.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference to the
Cross-Reference Sheet to the Registration Statement of Defined Asset Funds
Municipal Insured Series, 1933 Act File No. 33-54565.
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The following exhibits:
<TABLE>
<S> <C>
1.1 -- Form of Trust Indenture (incorporated by reference to Exhibit
1.1 to the Registration Statement of Equity Income Fund, Select
S&P Industrial Portfolio 1997 Series A, 1933 Act File No.
33-05683).
1.1.1 -- Form of Standard Terms and Conditions of Trust Effective
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to
the Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
1.11.1 -- Merrill Lynch Code of Ethics (incorporated by reference to
Exhibit 1.11.1 to Post-Effective Amendment No. 2 to the
Registration Statement of Equity Participation Series, Low Five
Portfolio, Defined Asset Funds, 1933 Act File No. 333-05685).
1.11.2 -- Equity Investor Fund Code of Ethics (incorporated by reference
to Exhibit 1.11.2 to Post-Effective Amendment No. 2 to the
Registration Statement of Equity Participation Series Low Five
Portfolio, Defined Asset Funds, 1933 Act File No. 333-05685).
*3.1 -- Opinion of counsel as to the legality of the securities being
issued including their consent to the use of their names under
the heading "Legal Opinion" in the Prospectus.
*5.1 -- Consent of independent accountants.
9.1 -- Information Supplement.
</TABLE>
- ------------------------
* To be filed by amendment
R-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 17TH DAY OF
MARCH 2000.
SIGNATURES APPEAR ON PAGE R-3
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute a Powers of Attorney have been filed under
majority Form SE and the following 1933 Act File
of the Board of Directors of Merrill Lynch, Number: 333-70593
Pierce,
Fenner & Smith Incorporated:
GEORGE A. SCHIEREN
JOHN L. STEFFENS
JAY FIFE
(As authorized signatory for Merrill
Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons
listed above)
</TABLE>
R-3
<PAGE>
EXHIBIT 9.1
INFORMATION SUPPLEMENT
EQUITY INVESTOR FUND--NUVEEN PORTFOLIOS
This Information Supplement provides additional information concerning the
structure, operations and risks of trusts (each, a "Portfolio") of Equity
Investor Fund--Nuveen Portfolios not found in the prospectuses for the
Portfolios. 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 Portfolio. This Information Supplement should be read in
conjunction with the prospectus for the Portfolio in which an investor is
considering investing ("Prospectus"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone number and address indicated
on the back cover of the Prospectus.
This Information Supplement is dated March 1, 2000. Capitalized terms have
been defined in the Prospectus.
-------------------
TABLE OF CONTENTS
-------------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Description of Portfolio Investments........................ 2
Portfolio Supervision..................................... 2
Risk Factors................................................ 2
Equity Securities......................................... 2
International Risk Factors................................ 3
Concentration........................................... 5
Technology Companies.................................. 5
The Telecommunications Industry....................... 6
</TABLE>
<PAGE>
DESCRIPTION OF PORTFOLIO INVESTMENTS
PORTFOLIO SUPERVISION
Each Portfolio is a unit investment trust which normally follows a buy and
hold investment strategy. Traditional methods of investment management for
mutual funds typically involve frequent changes in portfolio holdings based on
economic, financial and market analyses. Because a Portfolio is not actively
managed the adverse financial condition of an issuer or its failure to maintain
its current dividend rate will not necessarily require the sale of its
securities from a Portfolio. In the event a public tender offer is made for a
security or a merger or acquisition is announced affecting a security, the
Sponsor may instruct the Trustee to tender or sell the security on the open
market when in its opinion it is in the best interest of investors to do so. The
Sponsor may also instruct a Trustee to sell a security in the following
circumstances: (i) failure to declare or pay a regular dividend on a security or
anticipated dividends generally; (ii) institution of certain legal proceedings;
(iii) other legal questions or impediments affecting the security or payments on
that security; (iv) default under certain documents adversely affecting the
declaration or payment of anticipated dividends on the security, the issuer's
general credit standing or the sound investment character of the security, or a
default on other outstanding securities of the same issuer; (v) if a security
becomes inconsistent with a Portfolio's investment objectives; (vi) if the sale
is necessary or advisable to maintain the qualification of the Portfolio as a
Regulated Investment Company under the Internal Revenue Code or to provide funds
to make any distribution for a taxable year as required by the Internal Revenue
Code; or (vii) decline in security price or other market or credit factors that,
in the opinion of the Sponsor, makes retention of the security detrimental to
the interests of investors. If there is a failure to declare or pay a regular
dividend on a security or anticipated dividends generally on that security and
the Sponsor fails to instruct the Trustee within 30 days after notice of the
failure, the Trustee will sell the security.
Any monies allocated to the purchase of a security will generally be held
for the purchase of the security. However, a Portfolio may not be able to buy
each security at the same time, because of unavailability of the security or
because of any restrictions applicable to the Portfolio relating to the purchase
of the security by reason of the federal securities laws or otherwise.
Voting rights with respect to the securities will be exercised by the
Trustee in accordance with directions given by the Sponsor.
RISK FACTORS
EQUITY SECURITIES
An investment in Units of a Portfolio should be made with an understanding
of the risks inherent in an investment in equity securities, including the risk
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 may contribute directly to a decrease in the value of the
securities and thus in the value of the Units). Common stocks may be especially
susceptible to general stock market movements and to volatile increases and
decreases in 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.
Holders of common stocks incur more risk than holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Holders of common stocks of the type held by a Portfolio
have a right to receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stocks have the right to
receive dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in
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<PAGE>
other amounts available for distribution by the issuing corporation. 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 stocks are also entitled
to rights on liquidation which are senior to those of common stocks. Moreover,
common stocks do not represent an obligation of the issuer and therefore do not
offer any assurance of income or provide the degree of protection of capital
provided by debt securities. Indeed, the issuance of debt securities or even
preferred stock will create prior claims for payment of principal, interest,
liquidation preferences 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. Further, unlike debt securities which typically have
a stated principal amount payable at maturity (whose value, however, will be
subject to market fluctuations prior thereto), common stocks have neither a
fixed principal amount nor a maturity and have values which are subject to
market fluctuations for as long as the stocks remain outstanding. The value of
the securities in a Portfolio thus may be expected to fluctuate over the entire
life of the Portfolio to values higher or lower than those prevailing on the
Portfolio's initial date of deposit.
INTERNATIONAL RISK FACTORS
FOREIGN ISSUERS. Investments in Portfolios consisting partially or entirely
of securities of foreign issuers involve investment risks that are different in
some respects from an investment in a Portfolio that invests partially or
entirely in securities of domestic issuers. Those investment risks include
future political and economic developments and the possible establishment of
exchange controls or other governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant
securities. 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 such as those
applicable to domestic issuers.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies, and even if purchased by a Fund in American Depositary Receipt
("ADR") form in the United States, 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 United States dollar foreign
exchange rates for the relevant currencies. Moreover, for those Securities that
are ADRs, currency fluctuations will affect the U.S. dollar equivalent of the
local currency price of the underlying domestic shares and, as a result, are
likely to affect the value of the ADRs and consequently the value of the
Securities. In addition, the rights of holders of ADRs may be different than
those of holders of the underlying shares, and the market for ADRs may be less
liquid than that for the underlying shares.
ADRs evidence American Depositary Shares which, in turn, represent common
stock deposited with a custodian in a depositary. ADRs may be sponsored or
unsponsored. In an unsponsored facility, the depositary initiates and arranges
the facility at the request of market makers and acts as agent for the ADR
holder, while the company itself is not involved in the transaction. In a
sponsored facility, the issuing company initiates the facility and agrees to pay
certain administrative and shareholder-related expenses. Sponsored facilities
use a single depositary and entail a contractual relationship between the
issuer, the shareholder and the depositary; unsponsored facilities involve
several depositories with no contractual relationship to the company. ADRs are
registered securities pursuant to the Securities Act of 1933 and may be subject
to the reporting requirements of the Securities Exchange Act of 1934.
FOREIGN EXCHANGE RATES. A Portfolio of securities that are principally
traded in foreign currencies involves investment risks that are substantially
different from an investment in a fund which invests in securities that are
principally traded in United States dollars. This is because the United States
dollar value of a 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 soundness of the
world economy and the strength of the respective economy as compared to the
economies of the United States and other countries.
3
<PAGE>
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. Since
1983, the Hong Kong dollar has been pegged to the U.S. dollar although there is
no guarantee that the Hong Kong dollar will continue to be "pegged" to the U.S.
dollar in the future. 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 Trustee 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 Trustee may
not be indicative of the amount in United States dollars a Portfolio would
receive had the Trustee sold any particular currency in the market.
The Trustee is required to conduct the foreign exchange transactions of a
Portfolio either on a spot (I.E., cash) buying basis or on a forward foreign
exchange basis, whichever will synchronize the currency conversions as exactly
as practicable with the settlement dates of the foreign stock or with the
dividend distribution dates of the Portfolio, as the case may be. These forward
foreign exchange transactions will generally be of as short a duration as
practicable and will generally settle on the date of receipt of the applicable
foreign currency involving specific receivables or payables of the Portfolio
accruing in connection with the purchase and sale of its securities and income
received on the securities or the sale and redemption of Units. These
transactions are accomplished by contracting to purchase or sell a specific
currency at a future date and price set at the time of the contract. The cost to
a Portfolio of engaging in these foreign currency transactions varies with such
factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency
exchange are usually conducted on a principal basis, fees or commissions are not
normally involved. 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). The relevant exchange rate used
for evaluations of securities will include the cost of buying or selling, as the
case may be, of any forward foreign exchange contract in the relevant currency
to correspond to the
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<PAGE>
requirement that Units when purchased settle on a regular basis and that the
Trustee settle redemption requests in United States dollars within seven days.
EXCHANGE CONTROLS. On the basis of the best information available to the
Sponsor at the present time none of the securities, except as otherwise
indicated in a Portfolio's prospectus, is subject to exchange control
restrictions under existing law which would materially interfere with payment to
a Portfolio of amounts due on securities either because the particular
jurisdictions have not adopted any currency regulations of this type or because
the issues qualify for an exemption or the Portfolio, as an extraterritorial
investor, has qualified its purchase of securities as exempt by following
applicable "validation" or similar regulatory or exemptive procedures. However,
there can be no assurance that exchange control regulations might not be adopted
in the future which might adversely affect payments to a Portfolio.
In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in a Portfolio and on the ability of a Portfolio to satisfy its
obligation to redeem Units tendered to the Trustee for redemption.
LIQUIDITY. Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration requirements
of the Act. Sales of non-exempt securities by a Portfolio in United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these securities by a Portfolio will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that a Portfolio 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. To the extent the
liquidity of these markets becomes impaired, however, the value of a Portfolio
when responding to a substantial volume of requests for redemption of Units
(should redemptions be necessary despite the market making activities of the
Sponsor) received at or about the same time could be adversely affected. This
might occur, for example, as a result of economic or political turmoil in a
country in whose currency a Portfolio had a substantial portion of its assets
invested, or should relations between the United States and a foreign country
deteriorate markedly. Even though the securities are listed, the principal
trading market for the securities may be in the over-the-counter market. As a
result, the existence of a liquid trading market for the securities may depend
on whether dealers will make a market in the securities. There can be no
assurance that a market will be made for any of the securities, that any market
for the securities will be maintained or of the liquidity of the securities in
any markets made. In addition, a Portfolio may be restricted under the
Investment Company Act of 1940 from selling securities to the Sponsor. The price
at which the securities may be sold to meet redemptions and the value of a
Portfolio will be adversely affected if trading markets for the securities are
limited or absent.
CONCENTRATION
A Portfolio may contain or be concentrated in securities of issuers engaged
in the categories discussed below. An investment in a Portfolio should be made
with an understanding of the risks that these securities may entail, certain of
which are described below.
TECHNOLOGY COMPANIES
A Portfolio may be concentrated in stocks of issuers that manufacture
semiconductors, computers, electronics components, software, integrated systems
and other related products. These kinds of companies present certain risks that
may not exist to the same degree in other industries. The industry is rapidly
developing and highly competitive, both domestically and internationally.
Technology stocks, in general, tend to be relatively volatile as compared to
other types of investments. While volatility may create investment
opportunities, it does entail risk. Companies throughout the technology field
include many smaller and less seasoned companies. These types of companies may
present greater opportunities for capital appreciation, but usually involve
greater risks. These companies may have limited product lines, markets or
financial resources, or may have limited management or marketing personnel. In
addition, the securities that have wide institutional holding are more volatile
than the securities with lower institutional holding. The industry is also
strongly affected by worldwide scientific and technological developments and the
products of these companies may rapidly fall into obsolescence. Certain of these
companies may offer products or services that
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are subject to (or may become subject to) government regulation and may,
therefore, be affected adversely by government policies. Other factors that
characterize the industry include low barriers to entry, short product life
cycles, aggressive pricing and reduced profit margins, dramatic and often
unpredictable changes in growth rates, a high degree of investment needed to
maintain competitiveness, frequent new product introduction, the need to enhance
existing products, intense competition from large established companies, and
potential competition from small start up companies. In addition, these
companies are subject to events that affect manufacturing companies in general,
such as increases in material or labor costs, changes in distribution channels
and the need to manage inventory levels in line with product demand.
THE TELECOMMUNICATIONS INDUSTRY
The telecommunications industry is subject to varying degrees of competitive
regulatory, political and economic risk which may affect the price of the stocks
of companies involved in such industry. Such risks depend on a number of factors
including the country in which a company is located. Telecommunications
companies in both developed and emerging countries are undergoing significant
change due to varying and evolving levels of governmental regulation or
deregulation and technological advances as well as other factors. As a result,
competitive pressures are intense and the securities of such companies may be
subject to rapid price volatility. In addition, companies offering telephone
services are experiencing increasing competition from each other and alternate
service providers. The cellular telephone industry also faces increased
competition as the Federal Communications Commission ("FCC") has sold additional
spectrum to personal communications service providers, doubling the competitors
in a service area. All telecommunications companies in both developed and
emerging countries are subject to the additional risk that technological
innovations will make their products and services obsolete.
UNITED STATES. A Portfolio may be concentrated in stocks of companies that
are engaged in providing local, long-distance and cellular services, in the
manufacture of telecommunications products and in a wide range of other
activities including directory publishing, information systems and the operation
of voice, data and video telecommunications networks. Technological innovations
in fiber optics, cellular products and services, voice messaging, call waiting
and automatic dialing offer additional potential for significant expansion.
Advances like formation of a national cellular grid may also contribute to the
growth of this industry.
REGIONAL BELL HOLDING COMPANIES. The five RBHCs, which were spun off from
AT&T in 1984, are seeking to increase profits through the development and sale
of new high-margined products, such as caller ID, voicemail, call return, call
waiting and interactive multimedia, to their existing customer base. To the
extent that the demand for such products is less than anticipated, the price of
securities of RBHCs could be adversely affected. Many of the RBHCs are also
aggressively looking to expand into overseas markets through both direct and
indirect investment. The impact of this expansion on the price of securities of
the RBHCs is uncertain. These companies provide near monopoly local and
intrastate telephone service as well as cellular and other generally unregulated
services. A Portfolio may contain the securities of certain independent
telephone companies which are subject to regulation by the FCC and state utility
commissions and of certain long-distance telecommunications carriers, certain
telecommunications equipment manufacturers and certain non-U.S. companies which
provide telecommunications services or equipment mainly outside the United
States. International communications facilities in the United States are also
subject to the jurisdiction of the FCC, and the provision of service to foreign
countries is subject to the approval of the FCC and the appropriate foreign
governmental agencies.
THE TELECOMMUNICATIONS ACT OF 1996. The Telecommunications Act of 1996;
Communication Decency Act of 1996 (the "Communications Act") permits greater
competition in the local and long distance telephone and equipment manufacturing
markets. In addition, it changed the regulatory structure governing the RBHCs
from one based on rate of return to one based on price. Prior to passage of the
Communications Act, the RBHCs provided local telephone service, including
exchange access for long-distance companies, directory advertising and new
customer equipment. Many RBHCs, pursuant to waivers, could also engage in a
broad range of businesses including foreign consulting, servicing computers and
marketing or leasing office equipment. The RBHCs are allowed to provide long
distance services, video services and manufacturing. AT&T, which since 1984 has
provided interexchange long-distance service in competition with numerous
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other providers, is now allowed to also provide local telephone service and
video services. AT&T also provides certain other products, services and customer
equipment.
The independent telephone companies, like the RBHCs, provide local
telecommunications service, but operate in more rural areas. These companies
were not subject to the consent decree and therefore could provide the full
range of telecommunications services including local exchange and long distance
services, the installation of business systems, telephone consulting, the
manufacture of telecommunications equipment, operation of voice and data
networks and directory publishing. Cellular service is providing an increasing
component of the revenues of the RBHCs and independent telephone companies. Both
the RBHCs and independents are subject to regulation by the FCC and state
regulatory authorities. Long-distance companies which provide long-distance
telecommunications services are subject to regulation by the FCC. The
long-distance industry is consolidating into larger carriers and will experience
increased competition as local telephone companies and cable television
operators enter the long distance market. Conversely, local exchange carriers,
be they RBHCs or independents will also face competition in their local markets
from long-distance providers and cable television operators.
Business conditions of the telecommunications industry may affect the
ability of the issuers of the Securities in the Fund to meet their obligations.
The FCC and certain state utility regulators have introduced certain incentive
plans such as price-cap regulation. Price-cap regulation offers local exchange
carriers an opportunity to share in higher earnings provided they become more
efficient. These new approaches to regulation by the FCC and various state or
other regulatory agencies result in increased competition, and could lead to
greater risks as well as greater rewards for operating telephone companies.
Technology has tended to offset the effects of inflation and is expected to
continue to do so. Under traditional regulation, continuing cost increases, to
the extent not offset by improved productivity and revenues from increased
volume of business, would result in a decreasing rate of return and a continuing
need for rate increases. The long-distance industry has been increasingly opened
to competition over the last number of years. As a result, the major
long-distance companies compete actively for market share. Indeed, to meet
increasing competition, telephone companies will have to commit substantial
capital, technological and marketing resources. Many telecommunications
companies are currently considering partnerships with utilities, positioning
themselves to provide high-speed, two-way video services and high quality
telephone service.
Cellular and cable companies provide wireless services including paging,
dispatch and cellular services throughout the U.S. Most of the RBHCs,
independents as well as long distance companies, are seeking to increase their
share of the cellular market in view of perceived future growth prospects. It is
unclear what effect, if any, increased competition between wireless and
traditional services will have on the telecommunications industry. Other
potential competition for local service has also developed. The deregulated
cellular telephone industry has a limited operating history and there is
significant uncertainty regarding its future, particularly with regard to
increased competition, the continued growth in the number of customers, the
usage and pricing of cellular services, and the cost of providing cellular
services, including the cost of attracting new customers, developing new
technology and the ability to obtain licenses to provide cellular services.
Recent industry developments may provide increased competition and reduced
revenues from cellular service for RBHCs and independent telephone companies.
The uncertain outcomes of future labor agreements and employee and retiree
benefit costs may also have a negative impact on profitability. Telephone usage,
and therefore revenues, could also be adversely affected by any sustained
economic recession. Each of these problems would adversely affect the
profitability of the telecommunications issuers of the Securities in a Portfolio
and their ability to meet their obligations.
Telecommunications equipment companies design, manufacture, and distribute
telecommunication equipment such as central office switching equipment,
switches, displays, mobile and cellular equipment and systems, network
transmission equipment, PBXS, satellite, microwave, antennas, and digital
communications networks. Growth of these companies may result from telephone
service industry expansion, modernization requirements and possible new
technology such as interactive television. As less developed countries modernize
their telecommunications infrastructure, the demand for these products
increases. This segment of the industry is subject to rapidly changing
technology and the risk of technological obsolescence although it is generally
not subject to regulation as other telecommunications services are.
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In addition, a Portfolio may contain securities issued by telephone
companies which provide telecommunications services or equipment outside the
United States; these companies are subject to regulation by foreign governments
or governmental authorities which have broad authority regulating the provision
of telecommunications services and the use of certain telecommunication
equipment. Consequently, certain Securities in a Portfolio may be affected by
the rules and regulations adopted by regulatory agencies in other countries from
time to time.
FOREIGN TELECOMMUNICATIONS ISSUES. Many European, Latin American and Asian
telephone systems appear to have significant growth potential. The international
sector in a Portfolio consists predominantly of former government-owned
telecommunications systems that have been privatized in stages. Most are similar
to AT&T before 1984 in their dominance of local, long-distance and international
service within their country. As governments privatize their systems by selling
stock to the public, telephone service is likely to expand and, as a result of
greater efficiency, potentially become more profitable. On the other hand, the
countries are allowing more companies to compete with the recently privatized
companies. Many of these companies have expanded into other countries. The
Sponsor believes there is significant potential for expansion of telephone
services in foreign countries. Of course, there can be no assurance of whether
or when telephone service in these countries will expand or its effects on the
non-U.S. companies represented in any Portfolio.
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