Registration No. 333-40294
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 444
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on July 20, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
Dow Jones Internet Index(sm) Securities Portfolio
Series 6
FT 444
FT 444 is a series of a unit investment trust, the FT Series. FT 444
consists of a single portfolio known as Dow Jones Internet Index(sm)
Securities Portfolio, Series 6 (the "Trust"). The Trust invests in a
diversified portfolio of common stocks ("Securities") of companies which
comprise the Dow Jones Internet Composite Index(sm). The Trust seeks to
provide above-average capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust(registered trademark)
1-800-621-9533
The date of this prospectus is July 20, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 9
Portfolio 9
Risk Factors 11
Portfolio Securities Descriptions 12
Public Offering 14
Distribution of Units 16
The Sponsor's Profits 17
The Secondary Market 17
How We Purchase Units 17
Expenses and Charges 17
Tax Status 18
Retirement Plans 19
Rights of Unit Holders 20
Income and Capital Distributions 20
Redeeming Your Units 21
Investing in a New Trust 22
Removing Securities from the Trust 23
Amending or Terminating the Indenture 23
Information on the Sponsor, Trustee and Evaluator 24
Other Information 25
Page 2
Summary of Essential Information
Dow Jones Internet Index(sm) Securities Portfolio, Series 6
FT 444
At the Opening of Business on the
Initial Date of Deposit-July 20, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
<S> <C>
Initial Number of Units (1) 14,346
Fractional Undivided Interest in the Trust per Unit (1) 1/14,346
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 10.000
Maximum Sales Charge of 1.50% of the Public Offering Price per Unit
(1.50% of the net amount invested, exclusive of the deferred sales charge) (3) $ .150
Less Deferred Sales Charge per Unit $ (.150)
Public Offering Price per Unit (4) $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.850
Redemption Price per Unit (based on aggregate underlying value of Securities
less the deferred sales charge) (5) $ 9.850
Cash CUSIP Number 30265M 835
Reinvestment CUSIP Number 30265M 843
Fee Accounts Cash CUSIP Number 30265M 850
Fee Accounts Reinvestment CUSIP Number 30265M 868
Security Code 59154
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date July 25, 2000
Rollover Notification Date September 15, 2001
Special Redemption and Liquidation Period October 15, 2001 to October 24, 2001
Mandatory Termination Date (6) October 24, 2001
Income Distribution Record Date December 15, 2000
Income Distribution Date (7) December 31, 2000
______________
<FN>
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the Trust so that the Public Offering
Price per Unit will equal approximately $10.00. If we make such an
adjustment, the fractional undivided interest per Unit will vary from
the amount indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum sales charge is entirely deferred. See "Fee Table" and
"Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) During the initial offering period the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
the initial offering period, the Sponsor's Repurchase Price and
Redemption Price per Unit will not include such estimated organization
costs. See "Redeeming Your Units."
(6) See "Amending or Terminating the Indenture."
(7) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for Remaining Unit holders, amounts in the
Income Account (which consist of dividends on the Securities) will be
included in amounts distributed to Unit holders. We will distribute
money from the Capital Account monthly on the last day of each month to
Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $1.00 per 100 Units. In any
case, we will distribute any funds in the Capital Account as part of the
final liquidation distribution.
</FN>
</TABLE>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust. See "Public
Offering" and "Expenses and Charges." Although the Trust has a term of
approximately 15 months and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge 1.50%(a) $.150
====== ======
Initial sales charge (paid at time of purchase) 0.00% $.000
Deferred sales charge (paid in installments or at redemption) 1.50% .150
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .250%(b) $.0250
====== ======
Estimated Annual Trust Operating Expenses(c)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .079% $.0080
Creation and development fee .350%(d) .0353
Trustee's fee and other operating expenses .141%(e) .0142
________ ________
Total .570% $.0575
======== ========
Example
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that the Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
$232 $715 $1,224 $2,621
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you pay only the deferred sales
charge.
_____________
<FN>
(a) The maximum sales charge is entirely deferred. The deferred sales
charge is a fixed dollar amount equal to $.15 per Unit which, as a
percentage of the Public Offering Price, will vary over time. The
deferred sales charge will be deducted in three monthly installments
commencing November 20, 2000.
(b) Estimated organization costs will be deducted from the assets of the
Trust at the end of the initial offering period.
(c) With the exception of the creation and development fee, each of the
fees listed herein is assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time.
(d) The creation and development fee compensates the Sponsor for creating
and developing the Trust. During the life of the Trust, this fee is
accrued daily based on the Trust's net asset value at the annual rate of
.35%. The Trust pays the amount of any accrued creation and development
fee to the Sponsor monthly from the Trust's assets. In connection with
the creation and development fee, in no event will the Sponsor collect
more than 1.00% of a Unit holder's initial investment.
(e) Other operating expenses include costs associated with a license fee,
but do not include brokerage costs and other portfolio transaction fees.
In certain circumstances the Trust may incur additional expenses not set
forth above. See "Expenses and Charges."
</FN>
</TABLE>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 444
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 444, comprised of the Dow Jones Internet
Index(sm) Securities Portfolio, Series 6, as of the opening of business
on July 20, 2000. This statement of net assets is the responsibility of
the Trust's Sponsor. Our responsibility is to express an opinion on this
statement of net assets based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
statement of net assets is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on July 20, 2000. An audit also includes assessing the
accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall presentation of the statement
of net assets. We believe that our audit of the statement of net assets
provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 444,
comprised of the Dow Jones Internet Index(sm) Securities Portfolio,
Series 6, at the opening of business on July 20, 2000 in conformity with
accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
July 20, 2000
Page 5
Statement of Net Assets
Dow Jones Internet Index(sm) Securities Portfolio, Series 6
FT 444
At the Opening of Business on the
Initial Date of Deposit-July 20, 2000
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $143,456
Less liability for reimbursement to Sponsor for organization costs (3) (359)
Less liability for deferred sales charge (4) (2,152)
________
Net assets $140,945
========
Units outstanding 14,346
ANALYSIS OF NET ASSETS
Cost to investors (5) $143,456
Less maximum sales charge (5) (2,152)
Less estimated reimbursement to Sponsor for organization costs (3) (359)
________
Net assets $140,945
========
_____________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $200,000 will be allocated to the Trust, has been deposited
with the Trustee as collateral, covering the monies necessary for the
purchase of the Securities according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trust. These costs have been estimated at $.0250 per
Unit for the Trust. A payment will be made at end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of the Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from the Trust ($.15 per Unit), payable to us in three
equal monthly installments beginning on November 20, 2000 and on the
twentieth day of each month thereafter (or if such date is not a
business day, on the preceding business day) through January 19, 2001.
If you redeem Units before January 19, 2001 you will have to pay the
remaining amount of the deferred sales charge applicable to such Units
when you redeem them.
(5) The aggregate cost to investors in the Trust includes a deferred
sales charge computed at the rate of 1.50% of the Public Offering Price
per Unit (equivalent to 1.50% of the net amount invested, exclusive of
the deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering."
</FN>
</TABLE>
Page 6
Schedule of Investments
Dow Jones Internet Index(sm) Securities Portfolio, Series 6
FT 444
At the Opening of Business on the
Initial Date of Deposit-July 20, 2000
<TABLE>
<CAPTION>
Number Percentage Market Cost of
of Ticker Symbol and of Aggregate Value per Securities to
Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_____ ____________________________________ __________ ______ _____________
<C> <S> <C> <C> <C>
E*COMMERCE
___________
39 AMZN Amazon.com, Inc. 1.11% $ 40.875 $ 1,594
71 AMTD Ameritrade Holding Corporation (Class A) 0.63% 12.750 905
34 CNET CNET Networks, Inc. 0.70% 29.688 1,009
100 EGRP E*TRADE Group, Inc. 1.24% 17.750 1,775
29 EBAY eBay Inc. 1.15% 56.875 1,649
49 ETYS eToys Inc. 0.19% 5.688 279
12 GNET Go2Net, Inc. 0.42% 50.375 605
88 HLTH Healtheon/WebMD Corporation 0.97% 15.875 1,397
27 LCOS Lycos, Inc. 1.00% 52.938 1,429
28 MPPP MP3.com, Inc. 0.23% 12.000 336
41 PCLN Priceline.com Incorporated 1.14% 39.750 1,630
35 TMCS Ticketmaster Online-CitySearch, Inc. (Class B) 0.49% 19.938 698
29 VERT VerticalNet, Inc. 1.03% 50.875 1,475
127 WBVN Webvan Group Inc. 0.62% 6.969 885
13 YHOO Yahoo! Inc. 1.21% 134.000 1,742
INTERNET SERVICES
_________________
42 AKAM Akamai Technologies, Inc. 3.54% 121.000 5,082
209 AOL America Online, Inc. 8.64% 59.313 12,397
78 ARBA Ariba, Inc. 6.83% 125.563 9,794
141 ATHM At Home Corporation 1.87% 19.000 2,679
151 BEAS BEA Systems, Inc. 5.51% 52.375 7,909
97 BVSN BroadVision, Inc. 2.76% 40.813 3,959
106 CMGI CMGI Inc. 3.19% 43.125 4,571
24 CKFR CheckFree Holdings Corporation 1.00% 60.000 1,440
30 CHKP Check Point Software Technologies Ltd. (3) 4.70% 224.875 6,746
59 CMRC Commerce One, Inc. 2.28% 55.313 3,264
59 COVD Covad Communications Group, Inc. 0.82% 20.000 1,180
25 ISLD Digital Island, Inc. 0.61% 35.250 881
</TABLE>
Page 7
Schedule of Investments (cont'd.)
Dow Jones Internet Index(sm) Securities Portfolio, Series 6
FT 444
At the Opening of Business on the
Initial Date of Deposit-July 20, 2000
<TABLE>
<CAPTION>
Number Percentage Market Cost of
of Ticker Symbol and of Aggregate Value per Securities to
Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_____ ____________________________________ __________ _______ _____________
<C> <S> <C> <C> <C>
48 DCLK DoubleClick Inc. 1.09% $ 32.688 $ 1,569
47 ELNK EarthLink, Inc. 0.52% 15.750 740
168 EXDS Exodus Communications, Inc. 5.97% 50.938 8,558
76 ITWO i2 Technologies, Inc. 6.98% 131.750 10,013
93 INSP InfoSpace, Inc. 3.13% 48.250 4,487
44 INKT Inktomi Corporation 3.77% 123.063 5,415
103 ICGE Internet Capital Group, Inc. 2.89% 40.188 4,139
77 PSIX PSINet Inc. 1.24% 23.125 1,781
62 RNWK RealNetworks, Inc. 2.11% 48.875 3,030
77 TIBX TIBCO Software Inc. 6.09% 113.438 8,735
31 VRIO Verio Inc. 1.21% 55.813 1,730
69 VRSN VeriSign, Inc. 8.27% 172.000 11,868
88 VIGN Vignette Corporation 2.85% 46.375 4,081
________ ________
Total Investments 100% $143,456
======= ========
_____________
<FN>
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on July 19, 2000. The Trust has a Mandatory Termination Date
of October 24, 2001.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of ours. The cost of the Securities to us and our loss (which
is the difference between the cost of the Securities to us and the cost
of the Securities to the Trust) are $143,590 and $134, respectively.
(3) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
</FN>
</TABLE>
Page 8
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
444, consists of a single portfolio known as Dow Jones Internet
Index(sm) Securities Portfolio, Series 6.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This
agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
How We Created the Trust.
On the Initial Date of Deposit, we deposited a portfolio of common
stocks with the Trustee and in turn, the Trustee delivered documents to
us representing our ownership of the Trust in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trust, or cash (including a letter of credit) with instructions
to buy more Securities, to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"),
and not the percentage relationship existing on the day we are creating
new Units, since the two may differ. This difference may be due to the
sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in
the Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of the Securities
will fluctuate between the time of the cash deposit and the purchase of
the Securities, and because the Trust pays the associated brokerage
fees. To reduce this dilution, the Trust will try to buy the Securities
as close to the Evaluation Time and as close to the evaluation price as
possible. In addition, because the Trust pays the brokerage fees
associated with its creation of new Units and with the sale of
Securities to meet redemption and exchange requests, frequent redemption
and exchange activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trust to buy Securities. If we or an affiliate of ours act as agent to
the Trust, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trust. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities"), we will
refund to you that portion of the purchase price and sales charge
resulting from the failed contract on the next Income Distribution Date.
Any Replacement Security the Trust acquires will be identical to those
from the failed contract.
Portfolio
Objectives.
The Trust's investment objective is to provide the potential for above
average capital appreciation through an investment in common stocks of
Page 9
companies which comprise the Dow Jones Internet Composite Index(sm).
The Dow Jones Internet Composite Index(sm) is a modified market
capitalization index, the long-term goal of which is to represent 80% of
the market capitalization of Internet stocks by selecting a cross-
section of companies. It consists of 40 firms that derive the majority
of their revenue from the Internet. A total of 15 engage in e-commerce
while the other 25 are Internet service providers. The 40 companies
listed on the Dow Jones Internet Composite Index(sm) also make up two
subindexes called the Dow Jones Internet Commerce Index(sm) and the
Dow Jones Internet Services Index(sm). To qualify for listing on these
subindexes, companies must generate at least 50% of their revenue from
the Internet, have a minimum of three months trading history, and have a
market capitalization of at least $100 million. No single company will
represent more than 10% of the Dow Jones Internet Composite Index(sm)
any time the Index is rebalanced.
The Internet has developed quite a following in the investment community
over the past few years. The returns posted by companies like Yahoo!,
America Online, Excite@Home and Amazon.com have encouraged some
investors to chase short-term gains rather than invest for long-term
growth.
We believe that the Trust offers a more balanced approach to owning
these high-tech equities by providing a diversified portfolio of
companies that derive the majority of their revenue from the Internet.
The portfolio invests in the common stocks of companies that are listed
on the Dow Jones Internet Composite Index(sm) as of the business day
prior to the date of this prospectus. The weighting of the Securities in
the Trust attempts to match the weighting of the common stocks in the
Dow Jones Internet Composite Index(sm) as of the close of business on
the business day prior to the date of this prospectus, subject to the
limitation that only whole shares are purchased for the Trust.
The following factors support our positive outlook for the companies in
the Dow Jones Internet Composite Index(sm):
- The number of Internet addresses expanded by 45% over the one-year
period ending January 31, 1999. There were 43.2 million registered
Internet addresses, up from 29.7 million the year before. Recent reports
indicate that the number of Internet addresses has increased
significantly from these figures.
- Advertising spending on the Internet grew substantially from $266
million in 1996 to $1.26 billion for the first three quarters of 1998,
and has continued to show strong growth subsequent to this date. At that
time, consumer product companies accounted for 27% of spending, the most
on the Internet.
- The small business community, defined as firms with less than 100
employees, represents 98% of all U.S. businesses, yet many of these
firms do not utilize the Internet. This represents a potential growth
opportunity.
Internet Demographics
1995 1998
______ ______
Percentage of Americans Who
Own a computer 36% 43%
Use the Internet 14% 41%
Use e-mail 10% 35%
Go online every day 3% 12%
Bought something online 1% 13%
Percentage of Internet Users Who
Get entertainment information 44% 73%
Get travel / vacation information 27% 68%
Get financial information 26% 49%
source: The Industry Standard, January 99
Investors looking for an affordable way to invest in the growth
potential of the Internet should consider the Trust. It invests in 40
Internet-related companies, something the average investor would not be
in a position to do without a substantial financial commitment. Also,
the disciplined "buy and hold" approach may prove to be an effective way
to cope with volatility over time.
The Trust consists of the securities contained in the Dow Jones Internet
Composite Index(sm) as of the business day prior to the Initial Date of
Deposit. The composition of the Trust will not be adjusted to reflect
changes in the composition of the Dow Jones Internet Composite Index
(sm) which occur after the Initial Date of Deposit. In addition, during
the initial offering period the Trust will not invest more than 5% of
its portfolio in shares of any one securities-related issuer.
The Dow Jones Internet Composite Index(sm) is compiled by and is the
property of Dow Jones & Company, Inc. ("Dow Jones"). The Trust is not
sponsored, managed, sold or promoted by Dow Jones and Dow Jones has not
participated in the creation of the Trust or in the selection of the
Securities.
You should be aware that predictions stated herein for the technology
industry may not be realized. In addition, the Securities contained in
the Trust are not intended to be representative of the technology
Page 10
industry as a whole and the performance of the Trust is expected to
differ from that of the technology industry. Of course, as with any
similar investments, there can be no guarantee that the objective of the
Trust will be achieved. See "Risk Factors" for a discussion of the risks
of investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of companies that
are listed on the Dow Jones Internet Composite Index(sm). The value of
the Trust's Units will fluctuate with changes in the value of these
common stocks. Common stock prices fluctuate for several reasons
including changes in investors' perceptions of the financial condition
of an issuer or the general condition of the relevant stock market, or
when political or economic events affecting the issuers occur. In
addition, common stock prices may be particularly sensitive to rising
interest rates, as the cost of capital rises and borrowing costs increase.
Because the Trust is not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of the Trust will be positive over any period of time,
especially the relatively short 15-month life of the Trust, or that you
won't lose money. Units of the Trust are not deposits of any bank and
are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
The Trust may be considered to be concentrated in Securities issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies. This is a result of several factors common to many
such issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Securities Selection. The Trust consists of the securities contained in
the Dow Jones Internet Composite Index(sm) as of the business day prior
to the Initial Date of Deposit. The composition of the Trust will not be
adjusted to reflect changes in the composition of the Dow Jones Internet
Composite Index(sm) which occur after the Initial Date of Deposit.
Technology Industry. Because more than 25% of the Trust is invested in
common stocks of companies in the Internet area of the technology
industry, the Trust is considered to be concentrated in the technology
industry. A portfolio concentrated in a single industry may present more
risk than a portfolio broadly diversified over several industries.
Technology companies are generally subject to the risks of rapidly
changing technologies; short product life cycles; fierce competition;
aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving
industry standards and frequent new product introductions. Technology
companies may be smaller and less experienced companies, with limited
product lines, markets or financial resources and fewer experienced
management or marketing personnel. Technology company stocks, especially
those which are Internet-related, have experienced extreme price and
volume fluctuations that are often unrelated to their operating
performance. Also, the stocks of many Internet companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain companies represented in the Trust. In
addition, litigation regarding any of the issuers of the Securities, or
the technology industry, may negatively impact the share prices of these
Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the share
prices of the Securities.
Foreign Stocks. One of the Securities in the Trust is issued by a
foreign company, which makes the Trust subject to more risks than if it
invested solely in domestic common stocks. The Security is listed
directly on a U.S. securities exchange. Risks of foreign common stocks
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Page 11
Portfolio Securities Descriptions
E*COMMERCE
__________
Amazon.com, Inc., headquartered in Seattle, Washington, operates as an
on-line retailer of books, music, videotapes, audiotapes and other
products via a commercial site on the World Wide Web. Additionally, the
company is involved in hosting on-line auctions.
Ameritrade Holding Corporation (Class A), headquartered in Omaha,
Nebraska, through subsidiaries, operates as an online discount brokerage
firm which provides brokerage and clearing services to individual
consumer investors and other financial institutions.
CNET Networks, Inc., headquartered in San Francisco, California,
provides information on computers, the Internet and digital technologies
through sites on the Internet and also provides television programming.
E*TRADE Group, Inc., headquartered in Palo Alto, California, provides
online discount brokerage services, using its proprietary processing
technology. Services include automated order placement, portfolio
tracking and related market information, news and other information.
eBay Inc., headquartered in San Jose, California, operates an online
person-to-person trading community on the Internet, bringing together
buyers and sellers in an auction format to trade personal items such as
antiques, coins, collectibles, computers, memorabilia, stamps and toys.
eToys Inc., headquartered in Santa Monica, California, is a Web-based
retailer that is exclusively focused on children's products including
toys, video games, software, videos, books and music.
Go2Net, Inc., headquartered in Seattle, Washington, offers through the
World Wide Web a network of Web sites focused on personal finance,
information search, commerce and games.
Healtheon/WebMD Corporation, headquartered in Santa Clara, California,
provides healthcare services including membership, administration,
financial management and clinical information over the Internet, private
intranets and other networks.
Lycos, Inc., headquartered in Framingham, Massachusetts, owns and
operates a free global Internet navigation and community network which
provides Web search and navigation, communications and personalization
tools, homepage building, Web community services and a contemporary
shopping center.
MP3.com, Inc., headquartered in San Diego, California, promotes and
distributes music through the Internet and file formats that enable
recording artists to distribute and promote their music. The company
also enables consumers to access its music catalog to search, sample and
download music free of charge.
Priceline.com Incorporated, headquartered in Stamford, Connecticut,
collects individual customer offers for particular products or services
at prices set by those customers and communicates those demands directly
to participating sellers, which include domestic and international
airlines and hotel chains.
Ticketmaster Online-CitySearch, Inc. (Class B), headquartered in
Pasadena, California, provides local city guides, local advertising and
live event ticketing on the Internet.
VerticalNet, Inc., headquartered in Horsham, Pennsylvania, is one of the
Internet's leading creators and operators of vertical trade communities.
The company leverages the interactive features and global reach of the
Internet to create multi-national, targeted business-to-business
communities. These narrowly focused Web sites attract buyers and sellers
from around the world by catering to individuals with similar
professional interests. The company's communities include industries
such as electronics, the environment and services.
Webvan Group Inc., headquartered in Foster City, California, is a full-
service online grocer and drugstore that provides free delivery. The
company's customers can place their orders online 24 hours a day, 7 days
a week, and select a 30-minute delivery window at the time most
convenient for them. Orders are then hand-delivered to the customer's
desired location on the same day or up to seven days later.
Yahoo! Inc., headquartered in Santa Clara, California, offers a family
of branded online media properties, including "YAHOO!" that is among the
most widely used sources of information and discovery on the World Wide
Web.
INTERNET SERVICES
_________________
Akamai Technologies, Inc., headquartered in Cambridge, Massachusetts,
provides businesses with dependable, high-performance delivery of
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streaming media, rich Web content and Internet applications through
services that are scalable, easily implemented and easily managed.
America Online, Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada, Europe and Japan
offering subscribers a wide variety of services, including electronic
mail, conferencing, news, sports, Internet access, entertainment,
weather, stock quotes, software, computing support and online classes.
Ariba, Inc., headquartered in Sunnyvale, California, provides Internet-
and intranet-based business-to-business e-commerce solutions for
operating resources that include information technology and
telecommunications equipment, professional services, facilities and
office equipment, and expense items.
At Home Corporation (d/b/a Excite@Home), headquartered in Redwood City,
California, provides Internet services over the cable television
infrastructure and leased digital telecommunications lines to consumers
and businesses. The company is the leading provider of broadband
Internet services over the cable television infrastructure to consumers.
The company also provides broadband Internet services to businesses over
both the cable television infrastructure and digital telecommunications
lines.
BEA Systems, Inc., headquartered in San Jose, California, markets and
supports software used by large organizations to enable and support
their most critical business processes. The company's products have been
adopted in a wide variety of industries, including telecommunications,
banking and finance, manufacturing, retail and transportation.
BroadVision, Inc., headquartered in Redwood City, California, provides
an integrated software application system, "BroadVision One-To-One,"
that enables businesses to create applications for interactive marketing
and selling services on the World Wide Web.
CMGI Inc., headquartered in Andover, Massachusetts, invests in and
develops Internet companies. The company also operates direct marketing
companies and venture capital funds focused on the Internet.
CheckFree Holdings Corporation, headquartered in Norcross, Georgia,
provides electronic commerce services, financial application software
and related products for financial institutions and businesses and their
customers.
Check Point Software Technologies Ltd., headquartered in Ramat-Gan,
Israel, develops, sells and supports network security software products
that enable connectivity with security and manageability.
Commerce One, Inc., headquartered in Pleasanton, California, provides
business-to-business electronic procurement solutions. The company's
"The Commerce Chain Solution" dynamically links buying and supplying
organizations into real-time trading communities, increasing efficiency
and significantly reducing operational costs across the entire indirect
supply chain.
Covad Communications Group, Inc., headquartered in Santa Clara,
California, is a high speed Internet access company whose Digital
Subscriber Line (DSL) services are sold through leading Internet Service
Providers (ISPs) throughout the United States.
Digital Island, Inc., headquartered in San Francisco, California, is a
leading provider of network services for globalizing e-Business
applications. The company serves corporations which operate in multiple
countries that need to securely and consistently extend business-
critical applications for marketing, selling, servicing or distributing
products via the Internet.
DoubleClick Inc., headquartered in New York, New York, provides
comprehensive Internet advertising solutions for advertisers and Web
publishers.
EarthLink, Inc., headquartered in Pasadena, California, is an Internet
service provider focusing on providing reliable access, useful
information, assistance and services to its customers to encourage their
introduction to the Internet.
Exodus Communications, Inc., headquartered in Santa Clara, California,
provides Internet system and network management solutions for
enterprises with mission-critical Internet operations.
i2 Technologies, Inc., headquartered in Dallas, Texas, creates
innovative solutions that generate measurable value for business. The
company's planning and optimization software, "RHYTHM(registered
trademark)," helps companies maximize efficiency, collaborate with
suppliers and customers, conduct intelligent e-business over the
Internet, and become more responsive to market demand.
InfoSpace, Inc., headquartered in Redmond, Washington, provides content
services for the Internet such as yellow and white pages, maps,
classified ads, stock quotes and weather forecasts.
Page 13
Inktomi Corporation, headquartered in San Mateo, California, develops
and markets scalable Internet software. The company's products include
search engine, shopping engine and traffic server network caching
products.
Internet Capital Group, Inc., headquartered in Wayne, Pennsylvania, is
an Internet holding company primarily engaged in business-to-business,
or B2B, e-commerce through a network of partner companies.
PSINet Inc., headquartered in Herndon, Virginia, is a global facilities-
based Internet access provider to the business market, by means of its
high performance computer network, "PSINet."
RealNetworks, Inc., headquartered in Seattle, Washington, develops and
markets software products and services designed to enable users of
personal computers and other digital devices to send and receive real-
time media using current infrastructure.
TIBCO Software Inc., headquartered in Palo Alto, California, is a
provider of eBusiness infrastructure software products that enable
business-to-business, business-to-consumer and business-to-employee
solutions.
Verio Inc., headquartered in Englewood, Colorado, provides Internet
connectivity and enhanced Internet services to small and medium-sized
businesses.
VeriSign, Inc., headquartered in Mountain View, California, provides
digital certificate solutions and infrastructure needed by companies,
government agencies, trading partners and individuals to conduct secure
communications and commerce over the Internet and over intranets and
extranets using the Internet Protocol.
Vignette Corporation, headquartered in Austin, Texas, is a provider of
Internet Relationship Management software products and services, which
enable enterprises to develop and manage online customer relationships
and capitalize on Internet business opportunities. The company also has
offices throughout Europe and in the Asia-Pacific region.
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The total sales charge (which consists entirely of a deferred sales
charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee) will be purchased in the same
proportionate relationship as all the Securities contained in the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's
organization costs at the end of the initial offering period (a
significantly 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 Trust organization costs, the
Trustee will sell additional Securities to allow the Trust to fully
Page 14
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 per Unit amount set forth for the Trust in
"Statement of Net Assets," this will result in a greater effective cost
per Unit to Unit holders for the reimbursement to the Sponsor. To the
extent actual organization costs are less than the estimated amount,
only the actual organization costs will be deducted from the assets of
the Trust. When Securities are sold to reimburse the Sponsor for
organization costs, the Trustee will sell Securities, to the extent
practicable, which will maintain the same proportionate relationship
among the Securities contained in the Trust as existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of
Units ($500 if you are purchasing Units for your Individual Retirement
Account or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay is entirely deferred. This deferred sales
charge is a fixed dollar amount equal to $.15 per Unit which will be
deducted in three equal monthly installments of $.05 per Unit beginning
November 20, 2000 and on the 20th day of each month thereafter (or the
preceding business day if the 20th day is not a business day) through
January 19, 2001. On the Initial Date of Deposit this fee will equal
1.50% of the Public Offering Price (equivalent to 1.50% of the net
amount invested), but because this amount is a fixed dollar amount per
Unit, it will vary from 1.50% of the Public Offering Price per Unit as
the Public Offering Price varies from $10 per Unit. However, in no event
will the maximum sales charge exceed 3.00% of the Public Offering Price
per Unit. If you purchase Units after the first deferred sales charge
payment has been deducted, you will be charged the amount of the
previously collected deferred sales charge at the time of purchase and
will be subject to any remaining deferred sales charge payments not yet
collected.
Discounts for Certain Persons.
If you invest at least $1 million (except if you are purchasing for "Fee
Accounts" as described below), the maximum sales charge will be $.10 per
Unit.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above level, you can combine the Units you purchase
of the Trust with any other same day purchases of other trusts for which
we are Principal Underwriter and are currently in the initial offering
period. In addition, we will also consider Units you purchase in the
name of your spouse or child under 21 years of age to be purchases by
you. You must inform your dealer of any combined purchases before the
sale in order to be eligible for the reduced sales charge. Any reduced
sales charge is the responsibility of the party making the sale.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts")
will not be assessed any portion of the deferred sales charge described
in this section on the purchase of Units. We reserve the right to limit
or deny purchases of Units not subject to the deferred sales charge by
investors whose frequent trading activity we determine to be detrimental
to the Trust.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, dealers and their affiliates, and
vendors providing services to us may purchase Units at the Public
Offering Price less the applicable dealer concession. Immediate family
members include spouses, children, grandchildren, parents, grandparents,
siblings, mothers-in-law, fathers-in-law, sons-in-law, daughters-in-law,
brothers-in-law and sisters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons.
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, including Fee Accounts Units, you will be
credited the difference between your maximum sales charge and the maximum
deferred sales charge at the time you buy your Units. If you elect to
have distributions reinvested into additional Units of the Trust, in
addition to the reinvestment Units you receive you will also be credited
additional Units with a dollar value at the time of reinvestment sufficient
to cover the amount of any remaining deferred sales charge to be collected
Page 15
on such reinvestment Units. The dollar value of these additional
credited Units (as with all Units) will fluctuate over time, and may be
less on the dates deferred sales charges are collected than their value
at the time they were issued.
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in the Trust as of the Evaluation Time on each business day
and will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities will be determined as
follows: if the Securities are listed on a securities exchange or The
Nasdaq Stock Market, their value is generally based on the closing sale
prices on that exchange or system (unless it is determined that these
prices are not appropriate as a basis for valuation). However, if there
is no closing sale price on that exchange or system, they are valued
based on the closing ask prices. If the Securities are not so listed,
or, if so listed and the principal market for them is other than on that
exchange or system, their value will generally be based on the current
ask prices on the over-the-counter market (unless it is determined that
these prices are not appropriate as a basis for valuation). If current
ask prices are unavailable, the valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states.
All Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of $.10 per Unit ($.05 on
purchases of $1,000,000 or more).
Dealers and other selling agents who sell Units of the Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions:
Additional
Total Sales Concession
(in millions) per Unit
_____________________ __________
$40 but less than $50 $.0050
$50 but less than $75 $.0125
$75 but less than $100 $.0150
$100 or more $.0200
Dealers and other selling agents will not receive a concession on the
sale of Units which are not subject to the deferred sales charge, but
such Units will be included in determining whether the above volume
sales levels are met. Dealers and other selling agents who, during any
consecutive 12-month period, sell at least $2 billion worth of primary
market units of unit investment trusts sponsored by us will receive a
concession of $30,000 in the month following the achievement of this
level. We reserve the right to change the amount of concessions or
agency commissions from time to time. Certain commercial banks may be
making Units of the Trust available to their customers on an agency
basis. A portion of the sales charge paid by these customers is kept by
or given to the banks in the amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trust. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Page 16
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trust
(which may show performance net of the expenses and charges the Trust
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of the Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of the Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of the Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price at which we sell them to the Trust is
considered a profit or loss (see Note 2 of "Schedule of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
In maintaining a market for Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, and Trustee costs to transfer and record the ownership
of Units. We may discontinue purchases of Units at any time. IF YOU WISH
TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell
or redeem your Units before you have paid the total deferred sales
charge on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess.
The Trustee will pay operating expenses of the Trust from the Income
Account if funds are available, and then from the Capital Account. The
Income and Capital Accounts are noninterest-bearing to Unit holders, so
the Trustee may earn interest on these funds, thus benefiting from their
use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trust, and will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trust and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor will purchase research
services from a number of sources, which may include underwriters or
dealers of the Trust.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of the Trust outstanding
Page 17
at any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such service in such year.
As Sponsor, we will receive a fee from the Trust for creating and
developing the Trust, including determining the Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of the Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in the Trust's net asset value, is determined by
multiplying the net asset value of the Trust on that day by 1/365 of the
annual creation and development fee of .35%. The total amount of any
accrued but unpaid creation and development fee is paid to the Sponsor
on a monthly basis from the assets of the Trust. If you redeem your
Units, you will only be responsible for any accrued and unpaid creation
and development fee through the date of redemption. In connection with
the creation and development fee, in no event will the Sponsor collect
over the life of the Trust more than 1.00% of a Unit holder's initial
investment. We do not use this fee to pay distribution expenses or as
compensation for sales efforts.
In addition to the Trust's operating expenses, and the fees described
above, the Trust may also incur the following charges:
- A quarterly license fee (which will fluctuate with the Trust's net
asset value) payable by the Trust for the use of certain trademarks and
trade names of Dow Jones;
- All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- The expenses and costs incurred by the Trustee to protect the Trust
and your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of the Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trust. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trust. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities to make cash available to pay these charges which may
result in capital gains or losses to you. See "Tax Status."
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trust will not be taxed as a corporation for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by the Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by the Trust. This is true
even if you elect to have your distributions automatically reinvested
into additional Units. In addition, the income from the Trust which you
must take into account for federal income tax purposes is not reduced by
amounts used to pay Trust expenses (including the deferred sales charge,
if any).
Page 18
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units,
generally including sales charges, among each Security or other Trust
asset ratably according to their value on the date you purchase your
Units. In certain circumstances, however, you may have to adjust your
tax basis after you purchase your Units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and
profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
Rollovers.
If you elect to have your proceeds from the Trust rolled over into the
next series of the Trust, it is considered a sale for federal income tax
purposes, and any gain on the sale will be treated as a capital gain,
and any loss will be treated as a capital loss. However, any loss you
incur in connection with the exchange of your Units of the Trust for
units of the next series will generally be disallowed with respect to
this deemed sale and subsequent deemed repurchase, to the extent the two
trusts have substantially identical Securities under the wash sale
provisions of the Internal Revenue Code.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") when you redeem your Units
(except for Fee Accounts) or at the Trust's termination. If you request
an In-Kind Distribution you will be responsible for any expenses related
to this distribution. By electing to receive an In-Kind Distribution,
you will receive an undivided interest in whole shares of stock plus,
possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by the Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by the Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes you must take into account
your full pro rata share of the Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by the Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by the Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by the Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as a corporation, and the income of the
Trust will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trust for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
Page 19
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Account Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
your Trust;
- The number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you:
- A summary of transactions in the Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by the Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on the
Trust's Securities to the Income Account. All other receipts, such as
return of capital, are credited to the Capital Account.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Date to Unit holders of record on the
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preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
the Trust exceed amounts in the Income Account on the Income
Distribution Date. Distribution amounts will vary with changes in the
Trust's fees and expenses, in dividends received and with the sale of
Securities. The Trustee will distribute amounts in the Capital Account,
net of amounts designated to meet redemptions, pay the deferred sales
charge or pay expenses, on the last day of each month to Unit holders of
record on the fifteenth day of each month provided the amount equals at
least $1.00 per 100 Units. If the Trustee does not have your TIN, it is
required to withhold a certain percentage of your distribution and
deliver such amount to the Internal Revenue Service ("IRS"). You may
recover this amount by giving your TIN to the Trustee, or when you file
a tax return. However, you should check your statements to make sure the
Trustee has your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account to
pay the deferred sales charge. If not, the Trustee may sell Securities
to meet the shortfall.
Within a reasonable time after the Trust is terminated, unless you are a
Rollover Unit holder, you will receive a pro rata share of the money
from the sale of the Securities. However, if you are eligible, you may
elect to receive an In-Kind Distribution as described under "Amending or
Terminating the Indenture." You will receive a pro rata share of any
other assets remaining in the Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of the Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of the Trust by notifying the Trustee at least 10 days before any Record
Date. Each later distribution of income and/or capital on your Units
will be reinvested by the Trustee into additional Units of the Trust.
There is no sales charge on Units acquired through the Distribution
Reinvestment Option, as discussed under "Public Offering." This option
may not be available in all states. PLEASE NOTE THAT EVEN IF YOU
REINVEST DISTRIBUTIONS, THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR
INCOME TAX PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
If you tender 1,000 Units or more for redemption (except for Fee
Accounts), rather than receiving cash you may elect to receive an In-
Kind Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to the Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
Page 21
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of the Trust will
be reduced. These sales may result in lower prices than if the
Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts not designated to purchase
Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made; and
5. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, during the
initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Investing in a New Trust
The Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When the Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of the Trust (the "New Trust") if one is available. We
intend to create the New Trust in conjunction with the termination of
the Trust and plan to use the same procedure we used to select the
portfolio for the Trust to the New Trust.
If you wish to have the proceeds from your Units rolled into the New
Trust you must notify the Trustee in writing of your election by the
Rollover Notification Date stated in the "Summary of Essential
Information." As a Rollover Unit holder, your Units will be redeemed and
the underlying Securities sold by the Trustee, in its capacity as
Distribution Agent, during the Special Redemption and Liquidation
Period. The Distribution Agent may engage us or other brokers as its
agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of the New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject only to the maximum remaining deferred sales charge on such
units (currently expected to be $.15 per unit).
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in the New Trust's
portfolio. Rollover Unit holders will be given first priority to
purchase New Trust units. We cannot, however, assure the exact timing of
the creation of New Trust units or the total number of New Trust units
we will create. Any proceeds not invested on behalf of Rollover Unit
holders in New Trust units will be distributed within a reasonable time
Page 22
after such occurrence. Although we believe that enough New Trust units
can be created, monies in the New Trust may not be fully invested on the
next business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." If you elect not to
participate as a Rollover Unit holder ("Remaining Unit holders"), you
will not incur capital gains or losses due to the Special Redemption and
Liquidation, nor will you be charged any additional sales charge. We may
modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to the Trust.
Except in the limited instance in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the Trust, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by the Trust, at our instruction,
they will either be sold or held in the Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account for distribution to Unit holders
or to meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trust to facilitate selling
Securities, exchanged securities or property from the Trust. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us, or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of the Trust may be
changed. To get the best price for the Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trust's portfolio
transactions, or when acting as agent for the Trust in acquiring or
selling Securities on behalf of the Trust.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on
the Mandatory Termination Date. The Trust may be terminated earlier:
- Upon the consent of 100% of the Unit holders;
- If the value of the Securities owned by the Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
Page 23
value of Securities deposited in the Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of the Trust not yet sold aggregating more
than 60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If the Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of the
Trust before the Mandatory Termination Date for any other stated reason
will result in all remaining unpaid deferred sales charges on your Units
being deducted from your termination proceeds. For various reasons,
including Unit holders' participation as Rollover Unit holders, the
Trust may be reduced below the Discretionary Liquidation Amount and
could therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of the Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges and subject to any additional
restrictions imposed on Fee Accounts Units by "wrap fee" plans) rather
than the typical cash distribution. You must notify the Trustee at least
ten business days prior to the Mandatory Termination Date if you elect
this In-Kind Distribution option. If you do not elect to participate in
either the Rollover Option or the In-Kind Distribution option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after the Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the Trust any
accrued costs, expenses, advances or indemnities provided for by the
Indenture, including estimated compensation of the Trustee and costs of
liquidation and any amounts required as a reserve to pay any taxes or
other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trust or to any series
of the Trust or to any other dealer. We are including this information
only to inform you of our financial responsibility and our ability to
carry out our contractual obligations. We will provide more detailed
financial information on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trust.
Page 24
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trust, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trust.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trust's
statement of net assets, including the schedule of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trust's statement of net assets,
including the schedule of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
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Page 27
FIRST TRUST (registered trademark)
Dow Jones Internet Index(sm) Securities Portfolio Series 6
FT 444
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trust are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to Dow Jones Internet
Index(sm) Securities Portfolio, Series 6, but does not contain all of
the information about this investment company as filed with the
Securities and Exchange Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-40294) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trust is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: [email protected]
July 20, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 444 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing.
This Information Supplement is dated July 20, 2000. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Concentration
Technology 1
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Concentration
Technology. An investment in Units of the Trust should be made with an
understanding of the characteristics of the technology industry and the
risks which such an investment may entail. Technology companies
generally include companies involved in the development, design,
manufacture and sale of computers and peripherals, software and
services, data networking/communications equipment, internet
access/information providers, semiconductors and semiconductor equipment
and other related products, systems and services. The market for these
products, especially those specifically related to the Internet, is
characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Page 1
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, quality of Internet products and services and taxation
of transactions executed via the Internet. For example, recent proposals
would prohibit the distribution of obscene, lascivious or indecent
communications on the Internet. The adoption of any such laws could have
a material adverse impact on the Securities in the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 2
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 444, hereby identifies The First Trust
Special Situations Trust, Series 4; The First Trust Special
Situations Trust, Series 18; The First Trust Special Situations
Trust, Series 69; The First Trust Special Situations Trust,
Series 108; The First Trust Special Situations Trust, Series 119;
The First Trust Special Situations Trust, Series 190; FT 286; The
First Trust Combined Series 272; FT 412; and FT 438 for purposes
of the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 444, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on July 20, 2000.
FT 444
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
David J. Allen Sole Director )
of Nike Securities )
Corporation, the ) July 20, 2000
General Partner of )
Nike Securities L.P. )
)
)
) Robert M. Porcellino
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated July 20, 2000 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-40294) and related Prospectus of FT 444.
ERNST & YOUNG LLP
Chicago, Illinois
July 20, 2000
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for FT 444 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as
Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-44455] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed
on behalf of FT 415).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
