SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 447
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
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 the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION DATED JULY 19, 2000
BANDWIDTH SELECT PORTFOLIO, SERIES 4
E-BUSINESS SELECT PORTFOLIO, SERIES 4
E-INFRASTRUCTURE SELECT PORTFOLIO, SERIES 3
FIBER OPTICS SELECT PORTFOLIO, SERIES 3
GENOMICS & PROTEOMICS SELECT PORTFOLIO, SERIES 3
GLOBAL TECHNOLOGY SELECT PORTFOLIO, SERIES 2
SEMICONDUCTOR SELECT PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS SELECT PORTFOLIO, SERIES 3
BANDWIDTH PORTFOLIO, SERIES 4
E-BUSINESS PORTFOLIO, SERIES 4
E-INFRASTRUCTURE PORTFOLIO, SERIES 3
FIBER OPTICS PORTFOLIO, SERIES 3
GENOMICS & PROTEOMICS PORTFOLIO, SERIES 3
GLOBAL TECHNOLOGY PORTFOLIO, SERIES 2
SEMICONDUCTOR PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS PORTFOLIO, SERIES 3
FT 447
FT 447 is a series of a unit investment trust, the FT Series. FT 447
consists of 16 separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a diversified
portfolio of common stocks ("Securities") issued by companies in the
industry sector or investment focus for which each Trust is named. The
objective of each Trust is to provide above-average capital
appreciation. Each Select Portfolio Series has an expected maturity of
approximately 18 months. Each Portfolio Series has an expected maturity
of approximately five years.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is July __, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 7
Report of Independent Auditors 8
Statements of Net Assets 9
Schedules of Investments 13
The FT Series 30
Portfolios 31
Risk Factors 36
Public Offering 37
Distribution of Units 40
The Sponsor's Profits 41
The Secondary Market 41
How We Purchase Units 41
Expenses and Charges 41
Tax Status 43
Retirement Plans 44
Rights of Unit Holders 44
Income and Capital Distributions 45
Redeeming Your Units 45
Removing Securities from a Trust 46
Amending or Terminating the Indenture 47
Information on the Sponsor, Trustee and Evaluator 48
Other Information 49
Page 2
Summary of Essential Information
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Bandwidth e-Business e-Infrastructure
Select Select Select Fiber Optics
Portfolio Portfolio Portfolio Select Portfolio
Series 4 Series 4 Series 3 Series 3
__________ __________ _________ ________________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 3.25% of the Public Offering
Price per Unit (3.283% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .325 $ .325 $ .325 $ .325
Less Deferred Sales Charge per Unit $ (.225) $ (.225) $ (.225) $ (.225)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Cash CUSIP Number 30265S 303 30265S 345 30265S 386 30265S 428
Reinvestment CUSIP Number 30265S 311 30265S 352 30265S 394 30265S 436
Fee Accounts Cash CUSIP Number 30265S 329 30265S 360 30265S 402 30265S 444
Fee Accounts Reinvestment CUSIP Number 30265S 337 30265S 378 30265S 410 30265S 451
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date July __, 2000
Mandatory Termination Date (6) January 28, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Genomics & Global Semiconductor World Wide
Proteomics Technology Select Wireless
Select Portfolio Select Portfolio Portfolio Select Portfolio
Series 3 Series 2 Series 3 Series 3
__________ __________ __________ ________________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 3.25% of the Public Offering
Price per Unit (3.283% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .325 $ .325 $ .325 $ .325
Less Deferred Sales Charge per Unit $ (.225) $ (.225) $ (.225) $ (.225)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.675 $ 9.675 $ 9.675 $ 9.675
Cash CUSIP Number 30265S 469 30265S 501 30265S 543 30265S 584
Reinvestment CUSIP Number 30265S 477 30265S 519 30265S 550 30265S 592
Fee Accounts Cash CUSIP Number 30265S 485 30265S 527 30265S 568 30265S 600
Fee Accounts Reinvestment CUSIP Number 30265S 493 30265S 535 30265S 576 30265S 618
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date July __, 2000
Mandatory Termination Date (6) January 28, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Bandwidth e-Business e-Infrastructure Fiber Optics
Portfolio Portfolio Portfolio Portfolio
Series 4 Series 4 Series 3 Series 3
___________ ___________ ___________ ____________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 4.40% of the Public Offering
Price per Unit (4.444% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .440 $ .440 $ .440 $ .440
Less Deferred Sales Charge per Unit $ (.340) $ (.340) $ (.340) $ (.340)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Cash CUSIP Number 30265S 626 30265S 667 30265S 709 30265S 741
Reinvestment CUSIP Number 30265S 634 30265S 675 30265S 717 30265S 758
Fee Accounts Cash CUSIP Number 30265S 642 30265S 683 30265S 725 30265S 766
Fee Accounts Reinvestment CUSIP Number 30265S 659 30265S 691 30265S 733 30265S 774
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date July __, 2000
Mandatory Termination Date (6) July 15, 2005
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 2000.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 5
Summary of Essential Information
FT 447
At the Opening of Business on the Initial Date of Deposit-July __, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Genomics & Global World Wide
Proteomics Technology Semiconductor Wireless
Portfolio Portfolio Portfolio Portfolio
Series 3 Series 2 Series 5 Series 3
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest
in the Trust per Unit (1) 1/ 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 4.40% of the Public Offering
Price per Unit (4.444% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .440 $ .440 $ .440 $ .440
Less Deferred Sales Charge per Unit $ (.340) $ (.340) $ (.340) $ (.340)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Redemption Price per Unit
(based on aggregate underlying value $ 9.560 $ 9.560 $ 9.560 $ 9.560
of Securities less deferred sales charge) (5)
Cash CUSIP Number 30265S 782 30265S 824 30265T 103 30265T 145
Reinvestment CUSIP Number 30265S 790 30265S 832 30265T 111 30265T 152
Fee Accounts Cash CUSIP Number 30265S 808 30265S 840 30265T 129 30265T 160
Fee Accounts Reinvestment CUSIP Number 30265S 816 30265S 857 30265T 137 30265T 178
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date July __, 2000
Mandatory Termination Date (6) July 15, 2005
Income Distribution Record Date Fifteenth day of each June and December, commencing December 15, 2000.
Income Distribution Date (7) Last day of each June and December, commencing December 31, 2000.
______________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee 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) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$1.00 per 100 Units. In any case, we will distribute any funds in the
Capital Account in December of each year.
</FN>
</TABLE>
Page 6
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although each Select Portfolio
Series has a term of approximately 18 months, each Portfolio Series has
a term of approximately five years, and each is a unit investment trust
rather than a mutual fund, this information allows you to compare fees.
<TABLE>
<CAPTION>
Select
Portfolio Series Portfolio Series
___________________ ____________________
Amount Amount
per Unit per Unit
______ ______
<S> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum sales charge 3.25% $.325 4.40% $.440
======= ======= ======= =======
Initial sales charge (paid at time of purchase) 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge (paid in installments or at redemption) 2.25%(b) .225 3.40%(b) .340
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .260%(c) $.0260 .225%(c) $.0225
======= ======= ======= =======
Estimated Annual Trust Operating Expenses(d)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .081% $.0080 .100% $.0098
Creation and development fee .350%(e) .0347 .350%(e) .0343
Trustee's fee and other operating expenses .118%(f) .0117 .152%(f) .0149
______ ______ ______ ______
Total .549% $.0544 .602% $.0590
======= ======= ======= =======
</TABLE>
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 18 Months(g) 3 Years 5 Years
_______ __________ _______ _______
<S> <C> <C> <C> <C>
Select Portfolio Series $406 $434 $ - $ -
Portfolio Series 523 N.A. 645 779
The example will not differ if you hold rather than sell your Units at
the end of each period.
_____________
<FN>
(a) The initial sales charge is the difference between the maximum sales
charge (3.25% for each Select Portfolio Series and 4.40% for each
Portfolio Series) and any remaining deferred sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.225
per Unit for each Select Portfolio Series and $.340 per Unit for each
Portfolio Series which, as a percentage of the Public Offering Price,
will vary over time. The deferred sales charge will be deducted in five
monthly installments commencing February 20, 2001.
(c) Estimated organization costs will be deducted from the assets of a
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(d) With the exception of the creation and development fee, each of the
fees listed herein is assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time.
(e) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. Each Trust accrues this fee daily during the
life of the Trust based on its average net asset value and pays the
Sponsor monthly. In connection with the creation and development fee, in
no event will the Sponsor collect over the life of a Trust more than
1.00% in the case of each Select Portfolio Series or more than 2.85% in
the case of each Portfolio Series of a Unit holder's initial investment.
(f) For each Portfolio Series, other operating expenses include the
costs incurred by each Portfolio Series for annually updating such
Trusts' registration statements, but do not include brokerage costs and
other portfolio transaction fees for any of the Trusts. In certain
circumstances the Trusts may incur additional expenses not set forth
above. See "Expenses and Charges."
(g) For each Select Portfolio Series, the example represents the
estimated costs incurred through each Trust's approximate 18-month life.
</FN>
</TABLE>
Page 7
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 447
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 447, comprised of the Bandwidth Select
Portfolio, Series 4; e-Business Select Portfolio, Series 4; e-
Infrastructure Select Portfolio, Series 3; Fiber Optics Select
Portfolio, Series 3; Genomics & Proteomics Select Portfolio, Series 3;
Global Technology Select Portfolio, Series 2; Semiconductor Select
Portfolio, Series 5; World Wide Wireless Select Portfolio, Series 3;
Bandwidth Portfolio, Series 4; e-Business Portfolio, Series 4; e-
Infrastructure Portfolio, Series 3; Fiber Optics Portfolio, Series 3;
Genomics & Proteomics Portfolio, Series 3; Global Technology Portfolio,
Series 2; Semiconductor Portfolio, Series 5; and World Wide Wireless
Portfolio, Series 3 as of the opening of business on July __, 2000.
These statements of net assets are the responsibility of the Trusts'
Sponsor. Our responsibility is to express an opinion on these statements
of net assets based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
statements of net assets are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of net assets. Our procedures included
confirmation of the letter of credit allocated among the Trusts on July
__, 2000. An audit also includes assessing the accounting principles
used and significant estimates made by the Sponsor, as well as
evaluating the overall presentation of the statements of net assets. We
believe that our audit of the statements of net assets provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of FT 447,
comprised of the Bandwidth Select Portfolio, Series 4; e-Business Select
Portfolio, Series 4; e-Infrastructure Select Portfolio, Series 3; Fiber
Optics Select Portfolio, Series 3; Genomics & Proteomics Select
Portfolio, Series 3; Global Technology Select Portfolio, Series 2;
Semiconductor Select Portfolio, Series 5; World Wide Wireless Select
Portfolio, Series 3; Bandwidth Portfolio, Series 4; e-Business
Portfolio, Series 4; e-Infrastructure Portfolio, Series 3; Fiber Optics
Portfolio, Series 3; Genomics & Proteomics Portfolio, Series 3; Global
Technology Portfolio, Series 2; Semiconductor Portfolio, Series 5; and
World Wide Wireless Portfolio, Series 3 at the opening of business on
July __, 2000 in conformity with accounting principles generally
accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
July __, 2000
Page 8
Statements of Net Assets
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Bandwidth e-Business e-Infrastructure Fiber Optics
Select Portfolio Select Portfolio Select Portfolio Select Portfolio
Series 4 Series 4 Series 3 Series 3
__________ ____________ __________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum sales charge (5) ( ) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 9
Statements of Net Assets
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Genomics & Global Semiconductor World Wide
Proteomics Technology Select Wireless
Select Portfolio Select Portfolio Portfolio Select Portfolio
Series 3 Series 2 Series 5 Series 3
__________ ____________ ___________ _______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum sales charge (5) ( ) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 10
Statements of Net Assets
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Bandwidth e-Business e-Infrastructure Fiber Optics
Portfolio Portfolio Portfolio Portfolio
Series 4 Series 4 Series 3 Series 3
__________ ___________ __________ ___________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum sales charge (5) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 11
Statements of Net Assets
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Genomics & Global World Wide
Proteomics Technology Semiconductor Wireless
Portfolio Portfolio Portfolio Portfolio
Series 3 Series 2 Series 5 Series 3
__________ ____________ __________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $ $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $ $
Less maximum sales charge (5) ( ) ( ) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( ) ( ) ( )
________ ________ ________ ________
Net assets $ $ $ $
======== ======== ======== ========
_____________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $3,200,000 will be allocated among each of the 16 Trusts in FT
447, has been deposited with the Trustee as collateral, covering the
monies necessary for the purchase of the Securities according to their
purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $.0260 per
Unit for each Select Portfolio Series and $.0225 per Unit for each
Portfolio Series. A payment will be made at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period to an account maintained by the Trustee from which the obligation
of the investors to the Sponsor will be satisfied. To the extent that
actual organization costs of a Trust are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions of $.225 per Unit for each Select Portfolio Series, or
$.340 per Unit for each Portfolio Series, payable to us in five equal
monthly installments beginning on February 20, 2001 and on the twentieth
day of each month thereafter (or if such date is not a business day, on
the preceding business day) through June 20, 2001. If you redeem your
Units before June 20, 2001 you will have to pay the remaining amount of
the deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors includes a maximum sales charge
(comprised of an initial sales charge and a deferred sales charge)
computed at the rate of 3.25% of the Public Offering Price per Unit for
each Select Portfolio Series (equivalent to 3.283% of the net amount
invested, exclusive of the deferred sales charge) or 4.40% of the Public
Offering Price per Unit for each Portfolio Series (equivalent to 4.444%
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 12
Schedule of Investments
Bandwidth Select Portfolio, Series 4
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 13
Schedule of Investments
e-Business Select Portfolio, Series 4
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 14
Schedule of Investments
e-Infrastructure Select Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 15
Schedule of Investments
Fiber Optics Select Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 16
Schedule of Investments
Genomics & Proteomics Select Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 17
Schedule of Investments
Global Technology Select Portfolio, Series 2
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 18
Schedule of Investments
Semiconductor Select Portfolio, Series 5
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 19
Schedule of Investments
World Wide Wireless Select Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 20
Schedule of Investments
Bandwidth Portfolio, Series 4
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 21
Schedule of Investments
e-Business Portfolio, Series 4
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 22
Schedule of Investments
e-Infrastructure Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 23
Schedule of Investments
Fiber Optics Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 24
Schedule of Investments
Genomics & Proteomics Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 25
Schedule of Investments
Global Technology Portfolio, Series 2
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 26
Schedule of Investments
Semiconductor Portfolio, Series 5
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 27
Schedule of Investments
World Wide Wireless Portfolio, Series 3
FT 447
At the Opening of Business on the
Initial Date of Deposit-July __, 2000
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ ______________ _________ _____________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 29.
</FN>
</TABLE>
Page 28
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on July __, 2000. Each Select Portfolio Series has a Mandatory
Termination Date of January __, 2002. Each Portfolio Series has a
Mandatory Termination Date of July __, 2005.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of ours. The cost of the Securities to us and our profit or
loss (which is the difference between the cost of the Securities to us
and the cost of the Securities to a Trust) are set forth below:
Cost of
Securities Profit
to Sponsor (Loss)
_________ ______
Bandwidth Select Portfolio, Series 4 $ $
e-Business Select Portfolio, Series 4
e-Infrastructure Select Portfolio, Series 3
Fiber Optics Select Portfolio, Series 3
Genomics & Proteomics Select Portfolio, Series 3
Global Technology Select Portfolio, Series 2
Semiconductor Select Portfolio, Series 5
World Wide Wireless Select Portfolio, Series 3
Bandwidth Portfolio, Series 4
e-Business Portfolio, Series 4
e-Infrastructure Portfolio, Series 3
Fiber Optics Portfolio, Series 3
Genomics & Proteomics Portfolio, Series 3
Global Technology Portfolio, Series 2
Semiconductor Portfolio, Series 5
World Wide Wireless Portfolio, Series 3
Page 29
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
447, consists of 16 separate portfolios set forth below:
- Bandwidth Select Portfolio, Series 4
- e-Business Select Portfolio, Series 4
- e-Infrastructure Select Portfolio, Series 3
- Fiber Optics Select Portfolio, Series 3
- Genomics & Proteomics Select Portfolio, Series 3
- Global Technology Select Portfolio, Series 2
- Semiconductor Select Portfolio, Series 5
- World Wide Wireless Select Portfolio, Series 3
- Bandwidth Portfolio, Series 4
- e-Business Portfolio, Series 4
- e-Infrastructure Portfolio, Series 3
- Fiber Optics Portfolio, Series 3
- Genomics & Proteomics Portfolio, Series 3
- Global Technology Portfolio, Series 2
- Semiconductor Portfolio, Series 5
- World Wide Wireless Portfolio, Series 3
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
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 Trusts.
On the Initial Date of Deposit, we deposited portfolios of common stocks
with the Trustee and in turn, the Trustee delivered documents to us
representing our ownership of the Trusts in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trusts, or cash (including a letter of credit) with instructions
to buy more Securities to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"
for each Trust), and not the percentage relationship existing on the day
we are creating new Units, since the two may differ. This difference may
be due to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trusts, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in a
Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts pay the associated brokerage fees. To
reduce this dilution, the Trusts will try to buy the Securities as close
to the Evaluation Time and as close to the evaluation price as possible.
In addition, because the Trusts pay the brokerage fees associated with
the 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
Trusts to buy Securities. If we or an affiliate of ours act as agent to
the Trusts, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Page 30
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities"), we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Portfolios
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the sector or
investment focus for which the Trust is named. A diversified portfolio
helps to offset the risks normally associated with such an investment,
although it does not eliminate them entirely. The companies selected for
the Trusts have been researched and evaluated using database screening
techniques, fundamental analysis, and the judgment of the Sponsor's
research analysts. Each Select Portfolio Series has an expected maturity
of approximately 18 months whereas each Portfolio Series has an expected
maturity of approximately five years.
Bandwidth Select Portfolio, Series 4 and Bandwidth Portfolio, Series 4
each consist of a portfolio of common stocks of telecommunications
companies which are focusing on bandwidth technologies. The term
bandwidth refers to the amount of information that can be transmitted
from one user to another in a given amount of time. The speed at which
these signals travel is often as important to the end-user as the
information that is being transmitted. The growing demand for bandwidth
is being driven by the surge in the volume and complexity of data
communications on the Internet.
Now that the Internet infrastructure is firmly in place, we believe the
demand for bandwidth should continue to grow as more people access the
Web worldwide, and as telecommunications service providers begin to mass
market their newer and faster broadband systems.
The following factors support our positive outlook for the companies in
these portfolios:
- Communications networks presently carry nearly 30 times more voice
traffic than data. [Standard & Poor's Industry Surveys] In light of the
growth in Internet usage, we expect data traffic to surpass voice
communications in the years ahead.
- Wireless communications is now the fastest growing segment of the
communications equipment market. The demand for wireless products and
services should continue to grow as analog networks are upgraded to
digital systems. Digital signals will accommodate wireless data
communications and potentially increase demand for bandwidth.
- The transition from copper wiring to fiber-optics is occurring at a
brisk pace. It is estimated that over 20 million miles of fiber cables
were installed across the United States. [Federal Communications
Commission]
Broadband Systems. The future of high-speed access to the Internet lies
in Digital Subscriber Lines (DSL) and cable modems. A new DSL technology
standard, known as the G.Lite, will allow for high-speed Internet access
concurrent with normal telephone service.
Communications Equipment. We believe that the demand for value-added
services like high-speed Internet access should continue to fuel demand
for more bandwidth and communications equipment. On a worldwide basis,
Standard & Poor's reports that the communications equipment market was
valued at approximately $480 billion in 1999.
Deregulation. The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment.
e-Business Select Portfolio, Series 4 and e-Business Portfolio, Series 4
each consist of a portfolio of common stocks of companies that are
either marketing their goods and services on the Internet or selling
their products and services to those companies transacting business on
the Web.
Until recently, the media has focused its attention primarily on
companies that are engaging in business to consumer e-commerce. It is
now becoming apparent, however, that business-to-business e-commerce is
growing at a much faster rate than the more consumer driven market.
The following factors support our positive outlook for business-to-
business e-commerce:
- A study by the University of Texas showed that the Internet economy,
though still in its formative stages, generated $523.9 billion in
Page 31
revenue in the United States in 1999, growing at a rate nearly three
times the economy as a whole for the same period.
- It is estimated that as e-commerce evolves, business-to-business
revenues have the potential to substantially outpace business to
consumer revenues. [Business 2.0]
- The revenues generated by e-commerce are only half the story. The
cost savings associated with transacting business on the Internet could
be substantial. It is estimated that corporations around the world have
the potential to experience significant aggregate cost savings over the
next several years. [The McKinsey Quarterly]
A New Breed Of Middlemen. In the bricks-and-mortar business world they
are known as middlemen, but in the cyber-world they are called
intermediaries. They serve the same purpose, which is to act as market
makers and help facilitate transactions between businesses.
Intermediaries are essentially network hubs, comparable to airline hubs
that route travelers making connecting flights. They generate revenues
by charging transaction fees for bringing buyers and sellers together.
Intermediaries help make e-business run faster, better and cheaper.
Technology Makes it Possible. We believe that technology-based
companies, especially those involved in creating the Internet
infrastructure and those that provide access to the Internet, are in an
ideal position to capitalize on the potential growth of business-to-
business e-commerce.
No Boundaries. The motivation behind the business-to-business sales
model is to transact business faster, better and cheaper, but it
accomplishes much more. By conducting business online, companies are not
only removing domestic geographical boundaries, but global boundaries as
well. As the business-to-business marketplace expands, we believe that
the companies in the e-Business Portfolios have the potential to
participate in growth opportunities.
e-Infrastructure Select Portfolio, Series 3 and e-Infrastructure
Portfolio, Series 3 each consist of a portfolio of common stocks of
technology companies which provide the infrastructure which helped build
the Internet.
As you probably know by now, the Internet has evolved into much more
than just the "information superhighway." It is also a place where
individuals and companies can transact business. In fact, some companies
believe so strongly in the future of e-commerce that they have abandoned
the more traditional business models that favor bricks-and-mortar selling.
The good news for investors is that the Internet's infrastructure is
supported by a relatively small universe of high-tech companies
representing the following industries: computer hardware, software,
networking and telecom services. These companies are responsible for
providing the kind of cutting-edge technology needed to deliver such
popular Internet services as high-speed access, video downloads and e-
mail.
The anticipated growth in e-commerce has the potential to continue
fueling the need for more technological innovation as businesses of all
sizes embrace the concept of transacting business online. When you
consider that there are approximately 200 million people connected to
the Web worldwide, it only makes sense to consider investing in the
companies that make it all possible.
Information Technology (IT) equipment spending continues to be the
largest category of industrial spending for all types of capital
equipment. Between 1994 and 1999, on an inflation adjusted basis, IT
equipment spending accounted for more than half of the growth in
equipment spending.
Consider the following factors:
- The average e-commerce Web site costs $1 million to develop and takes
five months to complete. When you consider the need for ongoing products
and services, infrastructure is big business. [The Industry Standard]
- A study by the University of Texas showed that the Internet economy,
though still in its formative stages, generated $523.9 billion in
revenue in the United States in 1999, growing at a rate nearly three
times the economy as a whole for the same period.
- As the Internet grows, the demand for servers has the potential to
grow as well. By some estimates, only 5% of the servers expected to be
needed for the Internet's infrastructure by 2003 are in place today.
[Standard & Poor's Industry Surveys]
- Communications companies presently carry nearly 30 times more voice
traffic than data. Thanks to the Internet, we expect data traffic to
surpass voice communications in the years ahead. [Standard & Poor's
Industry Surveys]
Page 32
Fiber Optics Select Portfolio, Series 3 and Fiber Optics Portfolio,
Series 3 each consist of a portfolio of common stocks of
telecommunications companies focusing on the use of fiber optic
technology.
The first full service fiber optic telephone system became operational
in Chicago in 1977. Since then, the communications industry has
undergone a major transformation, driven both by demand and
technological innovation. In 1999, the optical networking industry
became one of the fastest growing areas within the communications
equipment industry. Optical equipment converts electronic signals into
light pulses that can be transmitted through fiber optic cables. We
believe the demand for this type of equipment has grown because of the
enormous data-carrying capacity offered by fiber optics. In our opinion,
the impact that fiber optic technology has had on the telephone industry
is astounding. Compared to a conventional three-inch copper wire that
can transmit approximately 14,000 phone calls, a half-inch fiber optic
cable can transmit over 3 million calls.
With more markets opening around the world because of deregulation,
service providers have begun relying on the most advanced technologies
available to improve the quality of their offerings in an effort to gain
market share. In our opinion, virtually all telephone companies have
realized that fiber optics represent an opportunity for them to meet the
demands for greater bandwidth that are required by new technologies and
ultimately win customers.
Consider the following factors:
- The transition from copper wiring to fiber optics is occurring at a
brisk pace. According to the Federal Communications Commission, it was
estimated that over 20 million miles of fiber cables were installed
across the United States.
- Demand for bandwidth has increased due to the growing popularity of
the Internet. Advanced technologies like high-speed digital systems
using fiber optic cables are one means being utilized to satisfy this
demand.
- The MultiMedia Telecommunications Association projects that total
spending on fiber optics will grow from $12 billion in 1998 to
approximately $25 billion in 2000.
- A single fiber optic strand can transmit ten thousand times more
information today than it could in 1988.
Genomics & Proteomics Select Portfolio, Series 3 and Genomics &
Proteomics Portfolio, Series 3 each consist of a portfolio of common
stocks of biotechnology companies and pharmaceutical companies that are
actively participating in genomics and proteomics research.
Biotechnology companies are continually trying to understand the cause
of disease in order to find appropriate treatments or even cures. Two of
the more prominent methods used to increase the speed and accuracy of
drug discovery and development are genomics and proteomics.
Genomics. Genomics refers to the study of the entire collection of human
genes. By deciphering the human genetic code, researchers hope to expose
the genes that are responsible for the disease they are targeting.
Advances in this area allow researchers to develop starting points to
treat the causes of the targeted disease.
Proteomics. Proteomics is the link between genes, proteins and disease.
Protein mediators control the gene's actions and are responsible for
normal biological functions and disease mechanisms. Many of the top
selling drugs either target proteins or are proteins. We expect data
obtained from proteomic and protein expression profiles to provide an
important level of information in contributing to the search for new
disease targets and an understanding of the biological basis of disease.
Development in this area should help to identify how the diseases start
and how they progress.
Research & Development. The essence of biotechnology lies in R&D. Since
the first biotech breakthrough in 1982, which involved genetically
engineered human insulin, nearly 100 products have come to market. The
recent advances in computer science technology have the potential to
expedite the process of moving medicines through the pipeline.
Consider the following factors:
- The mapping of the human genome is estimated to have increased the
number of targets for new drug interventions from 500 distinct targets
to over 3,000. [Pharmaceutical Research and Manufacturers of America]
- The Biotechnology Industry Organization estimates that more than 200
million people worldwide have been helped by over 90 biotechnology
products and vaccines.
- We believe the future growth prospects for the industry are bright due
to the potential for an increased demand from an aging population that
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is facing longer life expectancies.
- There are currently over 300 products in the late stages of clinical
trials as compared to only 30 back in 1991. [Standard & Poor's Industry
Surveys]
- A faster FDA approval process coupled with an increase in the length
of patent protection, from 17 to 20 years, are two positive changes
instituted to help biotechnology companies grow their businesses.
Global Technology Select Portfolio, Series 2 and Global Technology
Portfolio, Series 2 each consist of a portfolio of common stocks of
technology companies which are working to meet the potential increase in
worldwide demand for telecommunications and technology that is being
created by the e-revolution.
Although the Internet has made an astounding impact in the United
States, many other countries have been slow to embrace its potential.
Industry experts believe that this trend is about to change. According
to the Computer Industry Almanac, it is estimated that by the year 2005
the number of Internet users will have grown at such a rapid pace
outside of North America that they believe Europe will have the leading
market for Internet users. Other regions are anticipated to show strong
growth as well, with the Asia-Pacific region leading the way. Much of
this anticipated potential growth is being attributed to easier access
to the Internet through low cost PC's, Web-ready phones, and information
appliances, along with more affordable service.
A Wireless World. We expect much of the future growth in the wireless
industry to come from developing countries and remote rural villages.
Wireless technology is a far more viable means of communication for
these areas because it offers significant cost savings over the more
traditional wireline services. In fact, some European countries already
use wireless technology as their primary communication source. For
instance, in Scandinavia almost half of the population uses wireless
phones.
B2B Boom. Until recently, the media has focused its attention primarily
on companies that are engaging in business to consumer e-commerce. In
our opinion, it is now becoming apparent that business-to-business e-
commerce is growing at a much faster rate than the more consumer driven
market. By conducting business online, companies are not only removing
domestic geographical boundaries, but global boundaries as well.
Internet Infrastructure. The anticipated growth in e-commerce has the
potential to continue fueling the need for more technological innovation
as businesses of all sizes embrace the concept of transacting business
online. When you consider that there are approximately 200 million
people connected to the Web worldwide, it only makes sense to consider
investing in the companies that make it all possible.
Consider the following factors:
- Forrester Research predicts that global online advertising spending
has the potential to increase substantially by 2004, with an increasing
portion of the spending occurring outside of the U.S.
- According to Visa International, the B2B e-commerce growth rate of
most European countries is anticipated to outpace their GDP growth rate
by nearly 30 times over the next several years.
- It is estimated that corporations around the world have the potential
to experience an aggregate cost savings in excess of one trillion
dollars over the next several years by transacting business via the
Internet.
- It is estimated that there will be approximately 250 million
subscribers to global wireless services in 2000, making it one of the
fastest growing segments of the telecommunications industry.
- The Internet economy as a whole generated approximately $500 billion
in revenue in 1999.
Semiconductor Select Portfolio, Series 5 and Semiconductor Portfolio,
Series 5 each consist of a portfolio of common stocks of technology
companies in the semiconductor industry.
PC sales drove the last big upturn in the semiconductor industry.
Although the PC market is maturing, growth is still strong, as worldwide
PC shipments increased by 22% in 1999. Current growth is also being
driven in large part by the surge in wireless, wired and information
appliances, such as handheld computers, Internet-enabled TV's and smart
phones, as well as the infrastructure necessary to support them.
Cellular Growth. One of the major drivers of semiconductor industry
growth continues to be cellular phones. There were approximately 283
Page 34
million cellular phones produced in 1999, topping the number of PC's and
TV's currently being produced. It is anticipated that new features such
as links to laptop computers, e-mail, voice mail, good audio quality,
Internet functionality and perhaps even video will all be offered on
next generation phones. Increased demand for next generation phones has
the potential to become a significant factor in growing semiconductor
sales.
The Internet and Consumer Electronics. As Internet usage rises, the
supply of chips used for Internet infrastructure is expected to tighten,
which may potentially lead to rising profits for chip makers if
alternative sources do not become available-a simple case of supply and
demand.
Additionally, a vast new infrastructure of telecommunications networks
is needed for communications devices like MP3 players, digital cameras,
modems and personal digital assistants. The build-out of this network
infrastructure, the proliferation of the Internet and wireless devices,
and the digitalization of consumer electronics are all positive signals
of strong demand for semiconductors.
The following factors support our positive outlook for the semiconductor
industry:
- Worldwide semiconductor sales rose to $15.8 billion in May 2000, the
highest monthly sales number in the history of the semiconductor
industry. [Semiconductor Industry Association]
- The Semiconductor Industry Association reported that worldwide sales
of chips reached $149 billion in 1999, as the industry entered its first
sustained recovery since 1995.
- Sales to Japan and the Asia/Pacific region declined by 19.2% and 4.4%
respectively in 1998, as both regions' financial crises reduced the
demand for semiconductor-rich electronics. However, these two regions
have been leading the global semiconductor recovery, with chip sales up
28.9% in the Asia/Pacific region and 26.7% in Japan in 1999. [Standard &
Poor's Industry Surveys]
World Wide Wireless Select Portfolio, Series 3 and World Wide Wireless
Portfolio, Series 3 each consist of a portfolio of common stocks of
telecommunications companies which provide products and/or services used
in wireless communications.
It is easy to see that the "Information Age" is transforming the way we
work, the way we do business and the way we live. However, the one
technology that may have the greatest impact on our lives is one that we
cannot see-wireless communications. Wireless devices are enabling us to
exchange information in ways and places we once could only dream of. The
implementation of new technologies, combined with lower prices for
wireless service, has made wireless communication possible for more
people. Much of the future growth in the wireless industry is expected
to come from developing countries and remote rural villages. Wireless
technology is a far more viable means of communications for these areas
because it offers significant cost savings over the more traditional
wireline services. In fact, some European countries already use wireless
technology as their primary communication source. For instance, in
Scandinavia almost half the population uses wireless phones.
If you take a closer look at the wireless industry, it becomes apparent
that it is truly a global industry. With the World Trade Organization's
recent agreement to open the markets of its 72 member governments to
foreign companies, there are abundant opportunities for expansion in
this industry. Just as its wireline counterparts did previously, we
expect that the wireless industry will use mergers and acquisitions as a
means of attaining new technologies, forging strategic alliances and
reaching more consumers.
Consider the following factors:
- It is estimated that the number of global wireless subscriptions has
grown to approximately 300 million, making it one of the fastest growing
segments of the telecommunications industry. [Standard & Poor's Industry
Surveys]
- The number of wireless subscribers worldwide has nearly tripled over
the last three years. [Standard & Poor's Industry Surveys]
- The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment.
- In the United States alone, it is estimated that there could be
considerably more people using a wireless link to the Internet by 2004.
[Reuters]
You should be aware that predictions stated herein for the above
industries or sectors may not be realized. In addition, the Securities
Page 35
contained in each Trust are not intended to be representative of the
selected industry or sector as a whole and the performance of each Trust
is expected to differ from that of its comparative industry or sector.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S. and, for
certain Trusts, foreign companies. The value of a Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur. 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 Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
especially the relatively short 18-month life of each Select Portfolio
Series, or that you won't lose money. Units of the Trusts are not
deposits of any bank and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Certain of the Securities in certain of the Trusts may be issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies as a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Bandwidth/Communications Industry. Because more than 25% of each of the
Bandwidth Portfolios and the World Wide Wireless Portfolios are invested
in telecommunications companies, these Trusts are considered to be
concentrated in the communications industry. A portfolio concentrated in
a single industry may present more risks than a portfolio which is
broadly diversified over several industries. The market for high
technology communications products and services is characterized by
rapidly changing technology, rapid product obsolescence or loss of
patent protection, cyclical market patterns, evolving industry standards
and frequent new product introductions. Certain communications/bandwidth
companies are subject to substantial governmental regulation, which
among other things, regulates permitted rates of return and the kinds of
services that a company may offer. The communications industry has
experienced substantial deregulation in recent years. Deregulation may
lead to fierce competition for market share and can have a negative
impact on certain companies. Competitive pressures are intense and
communications stocks can experience rapid volatility.
Biotechnology/Pharmaceutical Industries. The Genomics & Proteomics
Portfolios are considered to be concentrated in the biotechnology and
pharmaceutical industries. Biotechnology and pharmaceutical companies
are subject to changing government regulation, including price controls,
national health insurance, managed care regulation and tax incentives or
penalties related to medical insurance premiums, which could have a
negative effect on the price and availability of their products and
services. In addition, such companies face increasing competition from
generic drug sales, the termination of their patent protection for
certain drugs and technological advances which render their products or
services obsolete. The research and development costs required to bring
a drug to market are substantial and may include a lengthy review by the
government, with no guarantee that the product will ever go to market or
show a profit. In addition, the potential for an increased amount of
required disclosure of proprietary scientific information could
negatively impact the competitive position of these companies. Many of
these companies may not offer certain drugs or products for several
years, and as a result, may have significant losses of revenue and
earnings.
e-Commerce Industry. The e-Business Portfolios are considered to be
concentrated in the e-commerce industry which includes companies
involved with business-to-business online selling, including companies
who are marketing goods and services or transacting business online.
Page 36
General risks for these companies include the state of the worldwide
economy, intense global competition, and rapid obsolescence of the
utilized technologies and their related systems, products and services.
While business-to-business e-commerce is evolving rapidly, future demand
for individual products and services is impossible to predict.
E-commerce company stocks have experienced extreme price and volume
fluctuations that are often unrelated to their operating performance.
Many such companies have exceptionally high price-to-earnings ratios
with little or no earnings histories. In addition, numerous e-commerce
companies have only recently begun operations, and may have limited
product lines, markets or financial resources, limited trading histories
and fewer experienced management personnel. Finally, the lack of
barriers to entry suggests a future of intense competition for online
retailers. For additional information regarding the risks associated
with the New e-conomy Portfolios, see "Risk Factors-Technology Industry."
Technology Industry. The e-Infrastructure Portfolios, the Fiber Optics
Portfolios, the Global Technology Portfolios and the Semiconductor
Portfolios are considered to be concentrated in the technology industry.
Technology companies are generally subject to the risks of rapidly
changing technologies; short product life cycles; fierce competition;
aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving
industry standards and frequent new product introductions. Technology
companies may be smaller and less experienced companies, with limited
product lines, markets or financial resources and fewer experienced
management or marketing personnel. Technology company stocks, especially
those which are Internet-related, have experienced extreme price and
volume fluctuations that are often unrelated to their operating
performance. Also, the stocks of many Internet companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, or of the industries
represented by such issuers may negatively impact the share prices of
these Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the share
prices of the Securities.
Foreign Stocks. Certain of the Securities in certain of the Trusts are
issued by foreign companies, which makes the Trusts subject to more
risks than if they invested solely in domestic common stocks. These
Securities are either directly listed on a U.S. securities exchange or
are in the form of American Depositary Receipts ("ADRs") which are
listed on a U.S. securities exchange. Risks of foreign common stocks
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The total sales charge (which combines an initial upfront sales charge
and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
Page 37
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust portfolio, legal fees and
the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in a
Trust. Securities will be sold to reimburse the Sponsor for a Trust's
organization costs at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trusts). During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
a Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of a Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for a Trust in "Notes to Statements of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs
are less than the estimated amount, only the actual organization costs
will be deducted from the assets of a Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in a Trust as
existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is equal to the difference between the maximum sales charge
(3.25% of the Public Offering Price for each Select Portfolio Series and
4.40% of the Public Offering Price for each Portfolio Series) and the
maximum remaining deferred sales charge (initially equal to $.225 per
Unit for each Select Portfolio Series and $.340 per Unit for each
Portfolio Series). This initial sales charge is initially equal to
approximately 1.00% of the Public Offering Price of a Unit, but will
vary from 1.00% depending on the purchase price of your Units and as
deferred sales charge payments are made. When the Public Offering Price
exceeds $10.00 per Unit, the initial sales charge will exceed 1.00% of
the Public Offering Price.
Monthly Deferred Sales Charge. In addition, five monthly deferred sales
charge payments of $.045 per Unit for each Select Portfolio Series or
$.068 per Unit for each Portfolio Series will be deducted from a Trust's
assets on approximately the 20th day of each month from February 20,
2001 through June 20, 2001. If you buy Units at a price of less than
$10.00 per Unit, the dollar amount of the deferred sales charge will not
change, but the deferred sales charge on a percentage basis will be more
than 2.25% of the Public Offering Price for each Select Portfolio Series
or more than 3.4% of the Public Offering Price for each Portfolio Series.
If you purchase Units after the last deferred sales charge payment has
been assessed, your sales charge will consist of a one-time initial
sales charge of 3.25% of the Public Offering Price per Unit (equivalent
to 3.359% of the net amount invested) for each Select Portfolio Series
and 4.40% of the Public Offering Price per Unit (equivalent to 4.603% of
the net amount invested) for each Portfolio Series. For each Portfolio
Series, the sales charge will be reduced by 1/2 of 1% on each subsequent
July 31, commencing July 31, 2001, to a minimum sales charge of 3.00%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum sales charge is reduced as
follows for each Select Portfolio Series:
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Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 3.00%
$100 but less than $150 2.75%
$150 but less than $500 2.40%
$500 but less than $1,000 2.25%
$1,000 or more 1.50%
For each Portfolio Series:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 4.15%
$100 but less than $250 3.90%
$250 but less than $500 3.40%
$500 or more 2.40%
* Breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trusts in this prospectus with any other same day purchases of
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the party
making the sale.
You may use redemption or termination proceeds from any unit investment
trust we sponsor to purchase Units of the Trusts during the initial
offering period at the Public Offering Price less 1.00%. Please note
that any deferred sales charge remaining on units you redeem to buy
Units of the Trusts will be deducted from those redemption proceeds.
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 the initial or 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 initial or deferred sales
charge by investors whose frequent trading activity we determine to be
detrimental to the Trusts.
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, 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 your 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
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 a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
Page 39
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
For each Select Portfolio Series, dealers and other selling agents can
purchase Units at prices which reflect a concession or agency commission
of 2.75% of the Public Offering Price per Unit. However, for Units
subject to a sales charge which are purchased using redemption or
termination proceeds, this amount will be reduced to ___% of the sales
price of these Units.
For each Portfolio Series, dealers and other selling agents can purchase
Units at prices which reflect a concession or agency commission of 3.2%
of the Public Offering Price per Unit (or 65% of the maximum sales
charge after July 31, 2001). However, for Units subject to a sales
charge which are purchased using redemption or termination proceeds,
this amount will be reduced to ___% of the sales price of these Units.
Dealers and other selling agents will receive an additional volume
concession or agency commission on all Portfolio Series Units they sell
equal to .30% of the Public Offering Price if they purchase at least
$100,000 worth of Units of the Trusts on the Initial Date of Deposit or
$250,000 on any day thereafter or if they were eligible to receive a
similar concession in connection with sales of similarly structured
trusts sponsored by us which are currently in the initial offering period.
Dealers and other selling agents who sell Units of a Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales per Trust Additional
(in millions): Concession:
_________________ ___________
$1 but less than $10 .20%
$10 or more .30%
Dealers and other selling agents can combine Units of a Select Portfolio
Series and its related Portfolio Series they sell for purposes of
reaching the additional concessions levels set forth in the above table.
In addition, dealers and other selling agents will not receive a
concession on the sale of Units which are not subject to the initial or
deferred sales charge, but such Units will be included in determining
whether the above volume sales levels are met. For all Trusts, dealers
and other selling agents who, during any consecutive 12-month period,
sell at least $2 billion worth of primary market units of unit
investment trusts sponsored by us will receive a concession of $30,000
in the month following the achievement of this level. We reserve the
right to change the amount of concessions or agency commissions from
time to time. Certain commercial banks may be making Units of the Trusts
available to their customers on an agency basis. A portion of the sales
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charge paid by these customers is kept by or given to the banks in the
amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of a Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price at which we sell them to a Trust is considered
a profit or loss (see Note 2 of "Notes to Schedules of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and in the case of each Portfolio Series, costs incurred in
annually updating each Portfolio Series' registration statements. We may
discontinue purchases of Units at any time. IF YOU WISH TO DISPOSE OF
YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES BEFORE
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or redeem
your Units before you have paid the total deferred sales charge on your
Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
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these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. For each Portfolio Series, legal, typesetting,
electronic filing and regulatory filing fees and expenses associated
with updating those Trusts' registration statements yearly are also now
chargeable to such Trusts. Historically, we paid these fees and
expenses. There are no such fees and expenses that will be charged to
each Select Portfolio Series. First Trust Advisors L.P., an affiliate of
ours, acts as both Portfolio Supervisor and Evaluator to the Trusts and
will receive the fees set forth under "Fee Table" for providing
portfolio supervisory and evaluation services to the Trusts. In
providing portfolio supervisory services, the Portfolio Supervisor may
purchase research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of each Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in a 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 .350% for each Select Portfolio
Series and .350% for each Portfolio Series. 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 your 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
more than 1.00% for each Select Portfolio Series and 2.85% for each
Portfolio Series of a Unit holder's initial investment. We do not use
this fee to pay distribution expenses or as compensation for sales
efforts.
In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities in a Trust to make cash available to pay these
charges which may result in capital gains or losses to you. See "Tax
Status."
Each Portfolio Series will be audited annually. So long as we are making
a secondary market for Units, we will bear the cost of these annual
audits to the extent the costs exceed $0.0050 per Unit. Otherwise, each
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Portfolio Series will pay for the audit. You can request a copy of the
audited financial statements from the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay a deferred sales charge.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units
among each Security or other Trust asset ratably according to their
value on the date you purchase your Units. In certain circumstances,
however, you may have to adjust your tax basis after you purchase your
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") when you redeem your Units
(except for Fee Accounts Units) or at a Trust's termination. If you
request an In-Kind Distribution you will be responsible for any expenses
related to this distribution. By electing to receive an In-Kind
Distribution, you will receive whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trusts as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
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you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts 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
the Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
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- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
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
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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 Units), rather than receiving cash, you may elect to receive an
In-Kind Distribution in an amount equal to the Redemption Price per Unit
by making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to a Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
Page 46
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trusts, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by a Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from each Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account for distribution to Unit holders
or to meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for a Trust to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information" for each Trust. The Trusts may be terminated earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of a Trust
before the Mandatory Termination Date for any other stated reason will
result in all remaining unpaid deferred sales charges on your Units
being deducted from your termination proceeds. For various reasons, a
Trust may be reduced below the Discretionary Liquidation Amount and
could therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Page 47
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of a Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges and subject to any additional
restrictions imposed on Fee Accounts Units by "wrap fee" plans) rather
than the typical cash distribution. See "Tax Status" for additional
information. You must notify the Trustee at least ten business days
prior to the Mandatory Termination Date if you elect this In-Kind
Distribution option. If you do not elect to participate in the In-Kind
Distribution option, you will receive a cash distribution from the sale
of the remaining Securities, along with your interest in the Income and
Capital Accounts, within a reasonable time after such Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the Trusts any accrued costs, expenses, advances or
indemnities provided for by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Page 48
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 49
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Page 51
FIRST TRUST (registered trademark)
BANDWIDTH SELECT PORTFOLIO, SERIES 4
E-BUSINESS SELECT PORTFOLIO, SERIES 4
E-INFRASTRUCTURE SELECT PORTFOLIO, SERIES 3
FIBER OPTICS SELECT PORTFOLIO, SERIES 3
GENOMICS & PROTEOMICS SELECT PORTFOLIO, SERIES 3
GLOBAL TECHNOLOGY SELECT PORTFOLIO, SERIES 2
SEMICONDUCTOR SELECT PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS SELECT PORTFOLIO, SERIES 3
BANDWIDTH PORTFOLIO, SERIES 4
E-BUSINESS PORTFOLIO, SERIES 4
E-INFRASTRUCTURE PORTFOLIO, SERIES 3
FIBER OPTICS PORTFOLIO, SERIES 3
GENOMICS & PROTEOMICS PORTFOLIO, SERIES 3
GLOBAL TECHNOLOGY PORTFOLIO, SERIES 2
SEMICONDUCTOR PORTFOLIO, SERIES 5
WORLD WIDE WIRELESS PORTFOLIO, SERIES 3
FT 447
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-_____) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts, including their Codes of Ethics, 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 __, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 52
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in FT 447 not found in the prospectus for the Trusts. This
Information Supplement is not a prospectus and does not include all of
the information that a prospective investor should consider before
investing in a Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing.
This Information Supplement is dated July __, 2000. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Litigation
Microsoft Corporation 2
Concentrations
Bandwidth/Communications 2
Biotechnology/Pharmaceutical 2
Electronic Commerce 3
Technology 7
Portfolios
Bandwidth 8
e-Business 9
e-Infrastructure 9
Fiber Optics 10
Genomics & Proteomics 11
Global Technology 11
Semiconductor 12
World Wide Wireless 12
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.
Foreign Issuers. Since certain of the Securities included in certain
Trusts consist of securities of foreign issuers, an investment in the
Trusts involves certain investment risks that are different in some
respects from an investment in a trust which invests entirely in the
securities of domestic issuers. These investment risks include future
political or governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Securities,
Page 1
the possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Litigation
Microsoft Corporation. Microsoft Corporation is currently engaged in
litigation with Sun Microsystems, Inc., the U.S. Department of Justice
and several state Attorneys General. The complaints against Microsoft
include copyright infringement, unfair competition and anti-trust
violations. The claims seek injunctive relief and monetary damages. The
District Court handling the antitrust case recently held that Microsoft
exercised monopoly power in violation of the Sherman Antitrust Act and
various state antitrust laws. The court entered into a final judgment on
June 7, 2000 in which it called for Microsoft to be broken up into two
separate companies, one composed of the company's operating systems and
the other containing its applications software business. The court also
called for significant operating restrictions to be placed on the
company until such time as the separation was completed. Microsoft has
stated that it will appeal the rulings against it after the penalty
phase and final decree. It is impossible to predict what impact the
penalties will have on Microsoft or the value of its stock.
Concentrations
Bandwidth/Communications. An investment in Units of the Bandwidth
Portfolios and the World Wide Wireless Portfolios should be made with an
understanding of the problems and risks such an investment may entail.
The market for high-technology communications products and services is
characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products and services. An unexpected change in one
or more of the technologies affecting an issuer's products or in the
market for products based on a particular technology could 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
Page 2
able to respond in a timely manner to compete in the rapidly developing
marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of the Trust's Units. For example, while telephone companies in the
United States are subject to both state and federal regulations
affecting permitted rates of returns and the kinds of services that may
be offered, the prohibition against phone companies delivering video
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in the Trust's portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology.
Biotechnology/Pharmaceutical. An investment in Units of the Genomics &
Proteomics Portfolios should be made with an understanding of the
problems and risks such an investment may entail. Companies involved in
advanced medical devices and instruments, drugs and biotech have
potential risks unique to their sector of the healthcare field. These
companies are subject to governmental regulation of their products and
services, a factor which could have a significant and possibly
unfavorable effect on the price and availability of such products or
services. Furthermore, such companies face the risk of increasing
competition from new products or services, generic drug sales, the
termination of patent protection for drug or medical supply products and
the risk that technological advances will render their products
obsolete. The research and development costs of bringing a drug to
market are substantial, and include lengthy governmental review
processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and may not offer certain
products for several years. Such companies may also have persistent
losses during a new product's transition from development to production,
and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the
biotechnology/pharmaceuticals sector very attractive for investors
seeking the potential for growth in their investment portfolio. However,
there are no assurances that the Trust's objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs). The Sponsor is unable to predict the
effect of any of these proposals, if enacted, on the issuers of
Securities in the Trust.
Electronic Commerce. An investment in Units of the e-Business Portfolios
should be made with an understanding of the characteristics of the
problems and risks such an investment may entail. These portfolios
consist of common stocks of retailers that market their goods and
services on the Internet and technology companies that create the tools
to make it possible. The profitability of companies engaged in the
retail industry will be affected by various factors including the
general state of the economy and consumer spending trends. Recently,
there have been major changes in the retail environment due to the
declaration of bankruptcy by some of the major corporations involved in
the retail industry, particularly the department store segment. The
continued viability of the retail industry will depend on the industry's
ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance
expansion. Weakness in the banking or real estate industry, a
recessionary economic climate with the consequent slowdown in employment
growth, less favorable trends in unemployment or a marked deceleration
in real disposable personal income growth could result in significant
pressure on both consumer wealth and consumer confidence, adversely
affecting consumer spending habits. In addition, competitiveness of the
retail industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Retailers who sell their products over the Internet have the potential
to access more consumers, but will require the capital to acquire and
Page 3
maintain sophisticated technology. E-commerce company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Many such companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. In addition, numerous e-commerce companies have only recently
begun operations, and may have limited product lines, markets or
financial resources, as well as fewer experienced management personnel.
Finally, the lack of barriers to entry suggests a future of intense
competition for online retailers.
See "Technology" below, for additional information concerning the risks
of companies engaged in the technology industry.
Technology. An investment in Units of the e-Infrastructure Portfolios,
the Fiber Optics Portfolios, the Global Technology Portfolios and the
Semiconductor Portfolios should be made with an understanding of the
characteristics of the problems and risks such an investment may entail.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 4
Portfolios
Equity Securities Selected for Bandwidth Select Portfolio, Series 4 and
Bandwidth Portfolio, Series 4
Both the Bandwidth Select Portfolio, Series 4 and the Bandwidth
Portfolio, Series 4 contain common stocks of the following companies:
, headquartered in
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, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for e-Business Select Portfolio, Series 4 and
e-Business Portfolio, Series 4
Both the e-Business Select Portfolio, Series 4 and the e-Business
Portfolio, Series 4 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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Page 5
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for e-Infrastructure Select Portfolio, Series
3 and e-Infrastructure Portfolio, Series 3
Both the e-Infrastructure Select Portfolio, Series 3 and the e-
Infrastructure Portfolio, Series 3 contain common stocks of the
following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for Fiber Optics Select Portfolio, Series 3
and Fiber Optics Portfolio, Series 3
Both the Fiber Optics Select Portfolio, Series 3 and the Fiber Optics
Portfolio, Series 3 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 6
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for Genomics & Proteomics Select Portfolio,
Series 3 and Genomics & Proteomics Portfolio, Series 3
Both the Genomics & Proteomics Select Portfolio, Series 3 and the
Genomics & Proteomics Portfolio, Series 3 contain common stocks of the
following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for Global Technology Select Portfolio,
Series 2 and Global Technology Portfolio, Series 2
Both the Global Technology Select Portfolio, Series 2 and the Global
Technology Portfolio, Series 2 contain common stocks of the following
companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Page 7
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
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, headquartered in
, headquartered in
Equity Securities Selected for Semiconductor Select Portfolio, Series 5
and Semiconductor Portfolio, Series 5
Both the Semiconductor Select Portfolio, Series 5 and the Semiconductor
Portfolio, Series 5 contain common stocks of the following companies:
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
, headquartered in
Equity Securities Selected for World Wide Wireless Select Portfolio,
Series 3 and World Wide Wireless Portfolio, Series 3
Both the World Wide Wireless Select Portfolio, Series 3 and the World
Wide Wireless Portfolio, Series 3 contain common stocks of the following
companies:
Page 8
, headquartered in
, headquartered in
, headquartered in
, headquartered in
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We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 9
MEMORANDUM
Re: FT 447
The only difference of consequence (except as described
below) between FT 440, which is the current fund, and FT 447, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the FT
440 Prospectus relate to the series number and size and the date
and various items of information which will be derived from and
apply specifically to the securities deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM 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
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 447 has duly caused this 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 19, 2000.
FT 447
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this 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 July 19, 2000
Corporation, the
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., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
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 ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
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 is
filed as Exhibit 4.1 to the Registration Statement.
S-3
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 Nike
Financial Advisory Services 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 447 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as Trustee
and First Trust Advisors L.P., as Evaluator and 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).
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).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-4
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).
___________________________________
* To be filed by amendment.
S-5
