Registration No. 333-43200
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 454
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on September 29, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
The Dow(sm) Target 5 Portfolio, October 2000 Series
The Dow(sm) Target 10 Portfolio, October 2000 Series
Global Target 15 Portfolio, October 2000 Series
The S&P Target 10 Portfolio, October 2000 Series
The Nasdaq Target 15 Portfolio, October 2000 Series
Value Line(registered trademark)Target Portfolio, October 2000 Series
The Dow(sm) Dividend And Repurchase Target 5
Portfolio, October 2000 Series
The Dow(sm) Dividend And Repurchase Target 10
Portfolio, October 2000 Series
FT 454
FT 454 is a series of a unit investment trust, the FT Series. FT 454
consists of eight separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a diversified
portfolio of common stocks ("Securities") selected by applying a
specialized strategy. The objective of each Trust is to provide above-
average total return.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is September 29, 2000
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 6
Report of Independent Auditors 8
Statements of Net Assets 9
Schedules of Investments 12
The FT Series 20
Portfolios 21
Risk Factors 23
Hypothetical Performance Information 26
Public Offering 28
Distribution of Units 30
The Sponsor's Profits 31
The Secondary Market 31
How We Purchase Units 31
Expenses and Charges 31
Tax Status 32
Retirement Plans 35
Rights of Unit Holders 35
Income and Capital Distributions 36
Redeeming Your Units 36
Investing in a New Trust 37
Removing Securities from a Trust 38
Amending or Terminating the Indenture 39
Information on the Sponsor, Trustee and Evaluator 39
Other Information 40
Page 2
Summary of Essential Information
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm) Global
Target 5 Portfolio Target 10 Portfolio Target 15 Portfolio
October October October
2000 Series 2000 Series 2000 Series
____________ ____________ ___________
<S> <C> <C> <C>
Initial Number of Units (1) 15,003 15,002 15,038
Fractional Undivided Interest in the Trust per Unit (1) 1/15,003 1/15,002 1/15,038
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 2.65% of the Public Offering
Price per Unit (2.677% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .265 $ .265 $ .265
Less Deferred Sales Charge per Unit $ (.165) $ (.165) $ (.165)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.735 $ 9.735 $ 9.735
Redemption Price per Unit (based on aggregate underlying value
of Securities less the deferred sales charge) (5) $ 9.735 $ 9.735 $ 9.735
Estimated Net Annual Distribution per Unit (6) $ .3390 $ .2970 $ .4729
Cash CUSIP Number 30265T 582 30265T 624 30265T 665
Reinvestment CUSIP Number 30265T 590 30265T 632 30265T 673
Fee Accounts Cash CUSIP Number 30265T 608 30265T 640 30265T 681
Fee Accounts Reinvestment CUSIP Number 30265T 616 30265T 657 30265T 699
Security Code 59651 59655 59659
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 4, 2000
Mandatory Termination Date (7) October 31, 2001
Rollover Notification Date October 1, 2001
Special Redemption and Liquidation Period October 15, 2001 to October 31, 2001
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 2000.
Income Distribution Date (6) Last day of June and December, commencing December 31, 2000.
______________
<FN>
See "Notes to Summary of Essential Information" on page 5.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Value
Line(registered
The S&P The Nasdaq trademark)
Target 10 Portfolio Target 15 Portfolio Target Portfolio
October October October
2000 Series 2000 Series 2000 Series
__________ __________ __________
<S> <C> <C> <C>
Initial Number of Units (1) 14,996 15,005 15,041
Fractional Undivided Interest in the Trust per Unit (1) 1/14,996 1/15,005 1/15,041
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 2.65% of the Public Offering
Price per Unit (2.677% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .265 $ .265 $ .265
Less Deferred Sales Charge per Unit $ (.165) $ (.165) $ (.165)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.735 $ 9.735 $ 9.735
Redemption Price per Unit (based on aggregate underlying value
of Securities less the deferred sales charge) (5) $ 9.735 $ 9.735 $ 9.735
Estimated Net Annual Distribution per Unit (6) $ N.A. $ N.A. $ N.A.
Cash CUSIP Number 30265T 707 30265T 749 30265T 780
Reinvestment CUSIP Number 30265T 715 30265T 756 30265T 798
Fee Accounts Cash CUSIP Number 30265T 723 30265T 764 30265T 806
Fee Accounts Reinvestment CUSIP Number 30265T 731 30265T 772 30265T 814
Security Code 59663 59667 59671
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 4, 2000
Mandatory Termination Date (7) October 31, 2001
Rollover Notification Date October 1, 2001
Special Redemption and Liquidation Period October 15, 2001 to October 31, 2001
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 2000.
Income Distribution Date (6) Last day of June and December, commencing December 31, 2000.
______________
<FN>
See "Notes to Summary of Essential Information" on page 5.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm)
DART 5 Portfolio DART 10 Portfolio
October October
2000 Series 2000 Series
__________ __________
<S> <C> <C>
Initial Number of Units (1) 15,001 15,001
Fractional Undivided Interest in the Trust per Unit (1) 1/15,001 1/15,001
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900
Maximum Sales Charge of 2.65% of the Public Offering
Price per Unit (2.677% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .265 $ .265
Less Deferred Sales Charge per Unit $ (.165) $ (.165)
Public Offering Price per Unit (4) $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.735 $ 9.735
Redemption Price per Unit (based on aggregate underlying value of
Securities less the deferred sales charge) (5) $ 9.735 $ 9.735
Estimated Net Annual Distribution per Unit (6) $ .2514 $ .2336
Cash CUSIP Number 30265T 822 30265U 100
Reinvestment CUSIP Number 30265T 830 30265U 118
Fee Accounts Cash CUSIP Number 30265T 848 30265U 126
Fee Accounts Reinvestment CUSIP Number 30265T 855 30265U 134
Security Code 59691 59675
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 4, 2000
Mandatory Termination Date (7) October 31, 2001
Rollover Notification Date October 1, 2001
Special Redemption and Liquidation Period October 15, 2001 to October 31, 2001
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 2000.
Income Distribution Date (6) Last day of June and December, commencing December 31, 2000.
_____________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on October 2, 2000, we may adjust the
number of Units of a Trust so that the Public Offering Price per Unit
will equal approximately $10.00. If we make such an adjustment, the
fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price on the
relevant stock exchange on the business day prior to the Initial Date of
Deposit. If a Security is not listed, or if no closing sale price
exists, it is valued at its closing ask price. The value of foreign
Securities trading in non-U.S. currencies is determined by converting
the value of such Securities to their U.S. dollar equivalent based on
the offering side of the currency exchange rate for the currency in
which a Security is generally denominated at the Evaluation Time on the
business day prior to the Initial Date of Deposit. Evaluations for
purposes of determining the purchase, sale or redemption price of Units
are made as of the close of trading on the New York Stock Exchange
("NYSE") (generally 4:00 p.m. Eastern time) on each day on which it is
open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit the Public
Offering Price per Unit will not include any accumulated dividends on
the Securities. After this date, a pro rata share of any accumulated
dividends on the Securities will be included.
(5) During the initial offering period the Sponsor's Initial Repurchase
Price per Unit and Redemption Price per Unit will include the estimated
organization costs per Unit set forth under "Fee Table." After the
initial offering period, the Sponsor's Initial Repurchase Price per Unit
and Redemption Price per Unit will not include such estimated
organization costs. See "Redeeming Your Units."
(6) The actual net annual distribution per Unit you receive will vary
from that set forth above with changes in a Trust's fees and expenses,
dividends received, currency exchange rates, foreign withholding and
with the sale of Securities. See "Fee Table" and "Expenses and Charges."
Dividend yield was not a selection criteria for The S&P Target 10
Portfolio, The Nasdaq Target 15 Portfolio or the Value Line(registered
trademark) Target Portfolio. At the Rollover Notification Date for
Rollover Unit holders or upon termination of a Trust for Remaining Unit
holders, amounts in the Income Account (which consist of dividends on
the Securities) will be included in amounts distributed to Unit holders.
We will distribute money from the Capital Account monthly on the last
day of each month to Unit holders of record on the fifteenth day of such
month if the amount available for distribution equals at least $1.00 per
100 Units. In any case, we will distribute any funds in the Capital
Account as part of the final liquidation distribution.
(7) See "Amending or Terminating the Indenture."
</FN>
</TABLE>
Page 5
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although the Trusts have a term of
approximately 13 months and are unit investment trusts rather than
mutual funds, this information allows you to compare fees.
<TABLE>
<CAPTION>
THE DOW (SM) THE DOW (SM) GLOBAL TARGET 15
TARGET 5 PORTFOLIO TARGET 10 PORTFOLIO PORTFOLIO
OCTOBER 2000 SERIES OCTOBER 2000 SERIES OCTOBER 2000 SERIES
_____________________ _____________________ _____________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Maximum sales charge 2.65% $ .265 2.65% $ .265 2.65% $ .265
====== ====== ====== ====== ====== ======
Initial sales charge (paid at time of purchase) 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge
(paid in installments or at redemption) 1.65%(b) .165 1.65%(b) .165 1.65%(b) .165
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .135%(c) $.0135 .135%(c) $.0135 .205%(c) $.0205
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(d)
as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .050% $.0050 .050% $.0050 .060% $.0060
Creation and development fee .350%(e) .0349 .350%(e) .0349 .350%(e) .0349
Trustee's fee and other operating expenses .094%(f) .0094 .094%(f) .0094 .171%(f) .0171
______ ______ ______ ______ ______ ______
Total .494% $.0493 .494% $.0493 .581% $.0580
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
VALUE LINE
THE S&P TARGET THE NASDAQ (registered trademark)
10 PORTFOLIO TARGET 15 PORTFOLIO TARGET PORTFOLIO
OCTOBER 2000 SERIES OCTOBER 2000 SERIES OCTOBER 2000 SERIES
_____________________ _____________________ ______________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
as a percentage of public offering price)
Maximum sales charge 2.65% $ .265 2.65% $ .265 2.65% $ .265
====== ====== ====== ====== ====== ======
Initial sales charge (paid at time of purchase) 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge
(paid in installments or at redemption) 1.65%(b) .165 1.65%(b) .165 1.65%(b) .165
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .165%(c) $.0165 .155%(c) $.0155 .190%(d) $.0190
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(d)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060 .060% $.0060
Creation and development fee .350%(e) .0349 .350%(e) .0349 .350%(e) .0349
Trustee's fee and other operating expenses .128%(f) .0128 .117%(f) .0117 .180%(f) .0180
______ ______ ______ ______ ______ ______
Total .538% $.0537 .527% $.0526 .590% $.0589
====== ====== ====== ====== ====== ======
</TABLE>
Page 6
<TABLE>
<CAPTION>
THE DOW(sm) THE DOW(sm)
DART 5 PORTFOLIO DART 10 PORTFOLIO
OCTOBER 2000 SERIES OCTOBER 2000 SERIES
_____________________ _____________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Maximum sales charge 2.65% $ .265 2.65% $ .265
====== ====== ====== ======
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) 1.65%(b) .165 1.65%(b) .165
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .180%(c) $.0180 .180%(c) $.0180
====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(d)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060
Creation and development fee .350%(e) .0349 .350%(e) .0349
Trustee's fee and other operating expenses .098%(f) .0098 .098%(f) .0098
______ ______ ______ ______
Total .508% $.0507 .508% $.0507
====== ====== ====== ======
</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 then sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
The Dow(sm) Target 5 Portfolio, October 2000 Series $328 $798 $1,294 $2,656
The Dow(sm) Target 10 Portfolio, October 2000 Series 328 798 1,294 2,656
Global Target 15 Portfolio, October 2000 Series 344 845 1,372 2,813
The S&P Target 10 Portfolio, October 2000 Series 335 820 1,331 2,730
The Nasdaq Target 15 Portfolio, October 2000 Series 333 814 1,320 2,709
Value Line(registered trademark)Target Portfolio, 343 843 1,369 2,807
October 2000 Series
The Dow(sm) DART 5 Portfolio, October 2000 Series 334 815 1,323 2,715
The Dow(sm) DART 10 Portfolio, October 2000 Series 334 815 1,323 2,715
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you pay only the deferred sales
charge.
_____________
<FN>
(a) The initial sales charge is equal to the difference between the
maximum sales charge (2.65% of the Public Offering Price) and any
remaining deferred sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.165
per Unit which, as a percentage of the Public Offering Price, will vary
over time. The deferred sales charge will be deducted in ten monthly
installments commencing November 20, 2000.
(c) Estimated organization costs will be deducted from the assets of a
Trust at the end of the initial offering period.
(d) With the exception of the creation and development fee, each of the
fees listed herein is assessed on a fixed dollar amount per Unit basis
which, as a percentage of average net assets, will vary over time.
(e) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. During the life of each Trust, this fee is
accrued daily based on such Trust's net asset value at the annual rate
of .35%. The Trusts pay the amount of any accrued creation and
development fee to the Sponsor monthly from each Trust's assets. 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% of a Unit
holder's initial investment.
(f) Other operating expenses for certain Trusts include estimated per
Unit costs associated with a license fee as described in "Expenses and
Charges," but do not include brokerage costs and other portfolio
transaction fees for any of the Trusts. In certain circumstances the
Trusts may incur additional expenses not set forth above. See "Expenses
and Charges."
</FN>
</TABLE>
Page 7
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 454
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 454, comprised of The Dow (sm) Target 5
Portfolio, October 2000 Series; The Dow (sm) Target 10 Portfolio,
October 2000 Series; Global Target 15 Portfolio, October 2000 Series;
The S&P Target 10 Portfolio, October 2000 Series; The Nasdaq Target 15
Portfolio, October 2000 Series; Value Line(registered trademark) Target
Portfolio, October 2000 Series; The Dow (sm) Dividend And Repurchase
Target 5 Portfolio, October 2000 Series; and The Dow (sm) Dividend And
Repurchase Target 10 Portfolio, October 2000 Series as of the opening of
business on September 29, 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
September 29, 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 454,
comprised of The Dow (sm) Target 5 Portfolio, October 2000 Series; The
Dow (sm) Target 10 Portfolio, October 2000 Series; Global Target 15
Portfolio, October 2000 Series; The S&P Target 10 Portfolio, October
2000 Series; The Nasdaq Target 15 Portfolio, October 2000 Series; Value
Line(registered trademark) Target Portfolio, October 2000 Series; The
Dow (sm) Dividend And Repurchase Target 5 Portfolio, October 2000
Series; and The Dow (sm) Dividend And Repurchase Target 10 Portfolio,
October 2000 Series, at the opening of business on September 29, 2000 in
conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
Chicago, Illinois
September 29, 2000
Page 8
Statements of Net Assets
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm) Global
Target 5 Portfolio Target 10 Portfolio Target 15 Portfolio
October October October
2000 Series 2000 Series 2000 Series
_____________ ____________ _____________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,531 $148,526 $148,874
Less liability for reimbursement to Sponsor
for organization costs (3) (203) (203) (308)
Less liability for deferred sales charge (4) (2,475) (2,475) (2,481)
_________ _________ ________
Net assets $145,853 $145,848 $146,085
========= ========= =========
Units outstanding 15,003 15,002 15,038
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,032 $150,027 $150,378
Less maximum sales charge (5) (3,976) (3,976) (3,985)
Less estimated reimbursement to Sponsor
for organization costs (3) (203) (203) (308)
_________ _________ ________
Net assets $ 145,853 $145,848 $146,085
========= ========= =========
__________
<FN>
See "Notes to Statements of Net Assets" on page 11.
</FN>
</TABLE>
Page 9
Statements of Net Assets
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Value Line
(registered
The S&P The Nasdaq trademark)
Target 10 Target 15 Target
Portfolio Portfolio Portfolio
October October October
2000 Series 2000 Series 2000 Series
____________ ______________ ____________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,459 $148,553 $148,910
Less liability for reimbursement to Sponsor
for organization costs (3) (247) (233) (286)
Less liability for deferred sales charge (4) (2,474) (2,476) (2,482)
_________ _________ ________
Net assets $145,738 $145,844 $146,142
========= ========= =========
Units outstanding 14,996 15,005 15,041
ANALYSIS OF NET ASSETS
Cost to investors (5) $149,959 $150,053 $150,414
Less maximum sales charge (5) (3,974) (3,976) (3,986)
Less estimated reimbursement to Sponsor
for organization costs (3) (247) (233) (286)
_________ _________ ________
Net assets $145,738 $145,844 $146,142
========= ========= =========
__________
<FN>
See "Notes to Statements of Net Assets" on page 11.
</FN>
</TABLE>
Page 10
Statements of Net Assets
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm)
DART 5 Portfolio DART 10 Portfolio
October October
2000 Series 2000 Series
____________ _________________
<S> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,512 $148,515
Less liability for reimbursement to Sponsor
for organization costs (3) (270) (270)
Less liability for deferred sales charge (4) (2,475) (2,475)
________ ________
Net assets $145,767 $145,770
======== ========
Units outstanding 15,001 15,001
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,012 $150,015
Less maximum sales charge (5) (3,975) (3,975)
Less estimated reimbursement to Sponsor
for organization costs (3) (270) (270)
________ ________
Net assets $145,767 $145,770
======== ========
______________
<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 $1,600,000 will be allocated among each of the eight Trusts in
FT 454, 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 $.0135,
$.0135, $.0205, $.0165, $.0155, $.0190, $.0180 and $.0180 per Unit for
the Target 5 Portfolio, Target 10 Portfolio, Global Target 15 Portfolio,
The S&P Target 10 Portfolio, The Nasdaq Target 15 Portfolio, Value
Line(registered trademark) Target Portfolio, DART 5 Portfolio and DART
10 Portfolio, respectively. A payment will be made at the end of the
initial offering period to an account maintained by the Trustee from
which the obligation of the investors to the Sponsor will be satisfied.
To the extent that actual organization costs of a Trust are greater than
the estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.165 per Unit), payable to us in ten equal
monthly installments beginning on November 20, 2000 and on the twentieth
day of each month thereafter (or if such date is not a business day, on
the preceding business day) through August 20, 2001. If you redeem Units
before August 20, 2001 you will have to pay the remaining amount of the
deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors in a Trust includes a maximum sales
charge (comprised of an initial and a deferred sales charge) computed at
the rate of 2.65% of the Public Offering Price (equivalent to 2.677% 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 11
Schedule of Investments
The Dow(sm) Target 5 Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of Current
of Ticker Symbol and Name of Offering per Securities to Dividend
Shares Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________ ____________ _________ _____________ _________
<C> <S> <C> <C> <C> <C>
1,033 T AT&T Corp. 20% $28.750 $ 29,699 3.06%
874 CAT Caterpillar Inc. 20% 34.000 29,716 4.00%
815 HON Honeywell International Inc. 20% 36.438 29,697 2.06%
1,038 IP International Paper Company 20% 28.625 29,713 3.49%
980 MO Philip Morris Companies, Inc. 20% 30.313 29,706 6.99%
_______ _________
Total Investments 100% $148,531
======= =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 12
Schedule of Investments
The Dow(sm) Target 10 Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of Current
of Ticker Symbol and Name of Offering per Securities to Dividend
Shares Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________ ____________ _________ ___________ _________
<C> <S> <C> <C> <C> <C>
517 T AT&T Corp. 10% $28.750 $ 14,864 3.06%
437 CAT Caterpillar Inc. 10% 34.000 14,858 4.00%
371 DD E.I. du Pont de Nemours & Company 10% 40.063 14,863 3.49%
360 EK Eastman Kodak Company 10% 41.250 14,850 4.27%
221 GM General Motors Corporation 10% 67.063 14,821 2.98%
408 HON Honeywell International Inc. 10% 36.438 14,867 2.06%
519 IP International Paper Company 10% 28.625 14,857 3.49%
162 MMM Minnesota Mining & Manufacturing Company 10% 91.563 14,833 2.53%
490 MO Philip Morris Companies, Inc. 10% 30.313 14,853 6.99%
222 PG Procter & Gamble Company 10% 66.938 14,860 2.09%
_______ ________
Total Investments 100% $148,526
======= ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 13
Schedule of Investments
Global Target 15 Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ _____________ ________
<C> <S> <C> <C> <C> <C>
DJIA COMPANIES:
_______________
344 AT&T Corp. 6.64% $28.750 $ 9,890 3.06%
291 Caterpillar Inc. 6.65% 34.000 9,894 4.00%
272 Honeywell International Inc. 6.66% 36.438 9,911 2.06%
346 International Paper Company 6.65% 28.625 9,904 3.49%
327 Philip Morris Companies, Inc. 6.66% 30.313 9,912 6.99%
FT INDEX COMPANIES:
___________________
2,299 British Airways Plc 6.65% 4.307 9,901 6.76%
1,819 Imperial Chemical Industries Plc 6.65% 5.442 9,899 9.57%
4,394 Invensys Plc 6.65% 2.253 9,899 5.56%
3,249 Marks & Spencer Plc 6.65% 3.047 9,899 4.81%
2,939 Tate & Lyle Plc 6.65% 3.369 9,902 10.34%
HANG SENG INDEX COMPANIES:
_________________________
10,000 Amoy Properties Ltd. 6.72% 1.000 10,000 4.62%
6,000 Cheung Kong Infrastructure Holdings Limited 6.56% 1.628 9,769 3.86%
10,000 Hang Lung Development Company Ltd. 6.63% 0.987 9,871 6.82%
15,000 Henderson Investment Ltd. 6.52% 0.647 9,711 4.55%
8,000 Hysan Development Co. Ltd. 7.06% 1.314 10,512 4.00%
_____ ________
Total Investments 100% $148,874
===== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 14
Schedule of Investments
The S&P Target 10 Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ ________________________ ___________ ________ __________
<C> <S> <C> <C> <C>
295 AAPL Apple Computer, Inc. 10.63% $ 53.500 $ 15,783
247 EPG El Paso Energy Corporation 10.61% 63.750 15,746
177 ENE Enron Corp. 10.64% 89.250 15,797
415 HCA HCA-The Healthcare Corporation 10.60% 37.938 15,744
214 HIG Hartford Financial Services Group, Inc. 10.63% 73.750 15,783
45 LEH Lehman Brothers Holdings Inc. 4.47% 147.313 6,629
350 REI Reliant Energy, Inc. 10.61% 45.000 15,750
442 THC Tenet Healthcare Corporation 10.61% 35.625 15,746
158 UNH UnitedHealth Group Incorporated 10.58% 99.438 15,711
415 WAG Walgreen Co. 10.62% 38.000 15,770
______ ________
Total Investments 100% $148,459
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 15
Schedule of Investments
The Nasdaq Target 15 Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Market
of Ticker Symbol and Offering Value per Securities to Capitalization
Shares Name of Issuer of Securities (1) Price Share the Trust (2) (in millions) (4)
______ _______________________________________ ___________ ________ _____________ _________________
<C> <S> <C> <C> <C> <C>
163 ADCT ADC Telecommunications, Inc. 3.05% $ 27.813 $ 4,534 $ 19,753
28 ADBE Adobe Systems Incorporated 3.03% 160.500 4,494 19,289
95 ALTR Altera Corporation 3.22% 50.375 4,786 20,098
261 AMGN Amgen Inc. 12.35% 70.250 18,335 72,238
40 APOL Apollo Group, Inc. (Class A) 1.00% 37.188 1,488 2,796
42 BMET Biomet, Inc. 1.00% 35.438 1,488 6,304
22 GENZ Genzyme Corporation (General Division) 1.01% 68.375 1,504 5,903
72 LLTC Linear Technology Corporation 3.44% 71.000 5,112 22,229
66 MXIM Maxim Integrated Products, Inc. 3.78% 85.063 5,614 24,322
49 MLHR Herman Miller, Inc. 1.01% 30.750 1,507 2,377
74 NTAP Network Appliance, Inc. 6.79% 136.313 10,087 43,082
455 ORCL Oracle Corporation 24.96% 81.484 37,075 229,920
39 PMCS PMC-Sierra, Inc. (5) 5.96% 227.188 8,860 33,549
300 SUNW Sun Microsystems, Inc. 24.97% 123.625 37,088 196,887
75 XLNX Xilinx, Inc. 4.43% 87.750 6,581 28,835
______ ________
Total Investments 100% $148,553
===== ========
______________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 16
Schedule of Investments
Value Line(registered trademark) Target Portfolio, October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ _________ _________ _____________
<C> <S> <C> <C> <C>
538 ADCT ADC Telecommunications, Inc. 10.05% $ 27.813 $ 14,963
24 BARZ BARRA, Inc. 1.02% 63.250 1,518
73 CDWC CDW Computer Centers, Inc. 3.51% 71.625 5,229
34 CRUS Cirrus Logic, Inc. 1.01% 44.125 1,500
39 FWRD Forward Air Corporation 1.00% 38.313 1,494
26 IMPH IMPATH Inc. 1.00% 57.563 1,497
80 IDTI Integrated Device Technology, Inc. 5.19% 96.531 7,722
127 IVX IVAX Corporation 3.92% 46.000 5,842
24 KEI Keithley Instruments, Inc. 1.02% 63.313 1,520
111 LMS The Lamson & Sessions Co. 1.01% 13.500 1,499
61 MERQ Mercury Interactive Corporation 6.40% 156.313 9,535
64 MCRL Micrel, Incorporated 3.00% 69.875 4,472
32 MND Mitchell Energy & Development Corp. 1.00% 46.750 1,496
28 NEWP Newport Corporation 3.10% 165.063 4,622
86 OO Oakley, Inc. 1.01% 17.438 1,500
455 ORCL Oracle Corporation 24.90% 81.484 37,075
45 OCA Orthodontic Centers of America, Inc. 1.02% 33.625 1,513
48 OXHP Oxford Health Plans, Inc. 1.01% 31.375 1,506
37 PLT Plantronics, Inc. 1.01% 40.625 1,503
20 PLXS Plexus Corp. 1.02% 75.625 1,512
38 DGX Quest Diagnostics Incorporated 3.04% 119.125 4,527
145 RHI Robert Half International Inc. 3.35% 34.438 4,994
18 UHS Universal Health Services, Inc. (Class B) 1.02% 84.500 1,521
96 WAT Waters Corporation 5.83% 90.375 8,676
247 XLNX Xilinx, Inc. 14.56% 87.750 21,674
________ ________
Total Investments 100% $148,910
======= =======
___________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 17
Schedule of Investments
The Dow(sm) Dividend And Repurchase Target 5 Portfolio,
October 2000 Series
FT 454
At the Opening of Business on the
Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ _____________ ______
<C> <S> <C> <C> <C> <C>
460 BA The Boeing Company 20% $ 64.625 $ 29,728 0.87%
720 EK Eastman Kodak Company 20% 41.250 29,700 4.27%
278 HWP Hewlett-Packard Company 20% 106.875 29,711 0.60%
324 MMM Minnesota Mining & Manufacturing Company 20% 91.563 29,666 2.53%
980 MO Philip Morris Companies, Inc. 20% 30.313 29,707 6.99%
______ ________
Total Investments 100% $148,512
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 19.
</FN>
</TABLE>
Page 18
Schedule of Investments
The Dow(sm) Dividend And Repurchase Target 10 Portfolio,
October 2000 Series
FT 454
At the Opening of Business on the Initial Date of Deposit-September 29, 2000
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ _____________ _________
<C> <S> <C> <C> <C> <C>
230 BA The Boeing Company 10% $ 64.625 $ 14,864 0.87%
437 CAT Caterpillar Inc. 10% 34.000 14,858 4.00%
371 DD E.I. du Pont de Nemours & Company 10% 40.063 14,863 3.49%
360 EK Eastman Kodak Company 10% 41.250 14,850 4.27%
221 GM General Motors Corporation 10% 67.063 14,821 2.98%
139 HWP Hewlett-Packard Company 10% 106.875 14,856 0.60%
203 MRK Merck & Co., Inc. 10% 73.125 14,845 1.86%
162 MMM Minnesota Mining & Manufacturing Company 10% 91.563 14,833 2.53%
490 MO Philip Morris Companies, Inc. 10% 30.313 14,853 6.99%
208 UTX United Technologies Corporation 10% 71.500 14,872 1.12%
______ ________
Total Investments 100% $148,515
===== ========
______________
<FN>
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on September 29, 2000. Each Trust has a Mandatory Termination
Date of October 31, 2001.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the Securities on the
applicable exchange (where applicable, converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the
Evaluation Time on September 28, 2000, the business day prior to the
Initial Date of Deposit. The valuation of the Securities has been
determined by the Evaluator, an affiliate of ours. The cost of the
Securities to us 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)
___________ ______
The Dow(sm) Target 5 Portfolio, October 2000 Series $148,010 $ 521
The Dow(sm) Target 10 Portfolio, October 2000 Series 148,319 207
Global Target 15 Portfolio, October 2000 Series 149,959 (1,085)
The S&P Target 10 Portfolio, October 2000 Series 140,804 7,655
The Nasdaq Target 15 Portfolio, October 2000 Series 147,941 612
Value Line(registered trademark) Target Portfolio,
October 2000 Series 148,163 747
The Dow(sm) DART 5 Portfolio, October 2000 Series 146,172 2,340
The Dow(sm) DART 10 Portfolio, October 2000 Series 147,692 823
(3) Current Dividend Yield for each Security was calculated by dividing
the most recent annualized ordinary dividend paid on a Security by that
Security's closing sale price at the Evaluation Time on the business day
prior to the Initial Date of Deposit.
(4) Market capitalization is based on the market value as of the close of
business on September 28, 2000.
(5) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
</FN>
</TABLE>
Page 19
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
454, consists of eight separate portfolios set forth below:
- The Dow(sm) Target 5 Portfolio
- The Dow(sm) Target 10 Portfolio
- Global Target 15 Portfolio
- The S&P Target 10 Portfolio
- The Nasdaq Target 15 Portfolio
- Value Line(registered trademark) Target Portfolio
- The Dow(sm) DART 5 Portfolio
- The Dow(sm) DART 10 Portfolio
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.
Trusts containing only U.S. listed stocks may be called "Domestic
Trusts" and those which contain primarily foreign stocks may be called
"International 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 a Trust, or cash (including a letter of credit) with instructions to
buy more Securities, to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (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 a Trust, on a market value basis, will also change daily.
The portion of Securities represented by each Unit will not change as a
result of the deposit of additional Securities or cash in a Trust. If we
deposit cash, you and new investors may experience a dilution of your
investment. This is because prices of Securities will fluctuate between
the time of the cash deposit and the purchase of the Securities, and
because the Trusts pay the associated brokerage fees. To reduce this
dilution, the Trusts will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible. 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 a
Trust to buy Securities. If we or an affiliate of ours act as agent to a
Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in a Trust. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Page 20
Portfolios
Objectives.
When you invest in a Trust you are purchasing a quality portfolio of
attractive common stocks in one convenient purchase. The objective of
each Trust is to provide an above-average total return. To achieve this
objective, each Trust will invest in the common stocks of companies
which are selected by applying a unique specialized strategy. While the
Trusts seek to provide above-average return, each follows a different
investment strategy. We cannot guarantee that a Trust will achieve
its objective or that a Trust will make money once expenses are deducted.
Dividend Yield Strategies.
The Dow(sm) Target 5 Strategy, the Dow(sm) Target 10 Strategy and the
Global Target 15 Strategy all invest in stocks with high dividend
yields. By selecting stocks with the highest dividend yields, each
Strategy seeks to uncover stocks that may be out of favor or
undervalued. Investing in stocks with high dividend yields may be
effective in achieving the investment objective of these Trusts, because
regular dividends are common for established companies, and dividends
have historically accounted for a large portion of the total return on
stocks. The Dow(sm) Target 5 Portfolio and the Global Target 15
Portfolio each seek to amplify this dividend yield strategy by selecting
the five lowest priced stocks of the 10 highest dividend-yielding stocks
in a particular index.
The Target 5 Portfolio Strategy.
The Dow(sm) Target 5 Portfolio stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the Dow Jones Industrial
Average ("DJIA") by dividend yield as of the business day prior to the
date of this prospectus.
Step 2: We then select the 10 highest dividend-yielding stocks from this
group.
Step 3:From the 10 stocks selected in Step 2, we select the five stocks
with the lowest per share stock price for The Target 5 Portfolio.
The Target 10 Portfolio Strategy.
The Dow(sm) Target 10 Portfolio stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA by dividend yield as
of the business day prior to the date of this prospectus.
Step 2: We then select the 10 highest dividend-yielding stocks for The
Target 10 Portfolio.
Global Target 15 Portfolio Strategy.
The Global Target 15 Portfolio stocks are determined as follows:
Step 1: We rank all stocks contained in the DJIA, the Financial Times
Industrial Ordinary Share Index ("FT Index") and the Hang Seng Index by
dividend yield as of the business day prior to the date of this
prospectus in the case of DJIA stocks or three business days prior to
the date of this prospectus in the case of FT Index and Hang Seng Index
stocks.
Step 2: We select the 10 highest dividend-yielding stocks in each
respective index.
Step 3: We select the five stocks with the lowest per share stock price
of the 10 highest-dividend yielding stocks in each respective index as
of their respective selection date for the Global Target 15 Portfolio.
Companies which, on or before their respective selection date, are
subject to any of the limited circumstances which warrant removal of a
Security from a Trust as described under "Removing Securities from a
Trust" have been excluded from the Global Target 15 Portfolio Strategy.
The S&P Target 10 Portfolio Strategy.
The S&P Target 10 Portfolio Strategy selects a portfolio of 10 of the
largest Standard & Poor's 500 Composite Stock Price Index ("S&P 500
Index") stocks with the lowest price-to-sales ratios and greatest one-
year price appreciation as a means to achieving its investment
objective. The S&P Target 10 Portfolio stocks are determined as follows:
Step 1: We select the 250 largest companies based on market
capitalization which are components of the S&P 500 Index as of two
business days prior to the date of this prospectus.
Step 2: From the above list, the 125 companies with the lowest price to
sales ratios are selected.
Step 3: The 10 companies which had the greatest one-year stock price
appreciation are selected for The S&P Target 10 Portfolio.
During the initial offering period The S&P Target 10 Portfolio will not
invest more than 5% of its portfolio in shares of any one securities-
related issuer.
Page 21
The Nasdaq Target 15 Portfolio Strategy.
The Nasdaq Target 15 Portfolio Strategy selects a portfolio of the 15
Nasdaq 100 Index stocks with the best overall ranking on both 12- and 6-
month price appreciation, return on assets and price to cash flow as a
means to achieving its investment objective. The Nasdaq Target 15
Portfolio stocks are determined as follows:
Step 1: We select stocks which are components of the Nasdaq 100 Index as
of two business days prior to the date of this prospectus and
numerically rank them by 12-month price appreciation (best (1) to worst
(100)).
Step 2: We then numerically rank the stocks by six-month price
appreciation.
Step 3: The stocks are then numerically ranked by return on assets ratio.
Step 4: We then numerically rank the stocks by the ratio of cash flow
per share to stock price.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 15 stocks with the lowest sums for The Nasdaq
Target 15 Portfolio.
The stocks which comprise The Nasdaq Target 15 Portfolio are weighted by
market capitalization subject to the restriction that only whole shares
are purchased and that no stock will comprise less than 1% or 25% or
more of the portfolio on the date of this prospectus. The Securities
will be adjusted on a proportionate basis to accommodate this constraint.
Companies which, based on publicly available information as of two
business days prior to the date of this prospectus, are the subject of
an announced business combination which we expect will happen within six
months of date of this prospectus have been excluded from The Nasdaq
Target 15 Portfolio.
Value Line(registered trademark) Target Portfolio Strategy.
The Value Line(registered trademark) Target Portfolio invests in 25 of
the 100 stocks that Value Line(registered trademark) gives a #1 ranking
for Timeliness(TM) which have recently exhibited certain positive
financial attributes. Value Line(registered trademark) ranks 1,700
stocks which represent approximately 94% of the trading volume on all
U.S. stock exchanges. Of these 1,700 stocks, only 100 are given their #1
ranking for Timeliness(TM), which measures Value Line's view of their
probable price performance during the next six to 12 months relative to
the others. Value Line(registered trademark) bases their rankings on a
long-term trend of earnings, prices, recent earnings, price momentum,
and earnings surprise. The Value Line Target Portfolio is determined as
follows:
Step 1:We start with the 100 stocks which Value Line(registered
trademark) at the initial date of deposit gives their #1 ranking for
Timeliness(TM), remove the stocks of companies considered to be
securities related issuers and apply the following screens as of two
business days prior to the date of this prospectus.
Step 2:We screen for consistent growth by ranking these remaining stocks
based on 12-month and 6-month price appreciation (best [1] to worst
[100]).
Step 3:We then screen for profitability by ranking the stocks by their
return on assets.
Step 4:Finally, we screen for value by ranking the stocks based on their
price to cash flow.
Step 5:We add up the numerical ranks achieved by each company in the
above steps and select the 25 stocks with the lowest sums for the Value
Line(registered trademark) Target Portfolio.
The stocks which comprise the Value Line(registered trademark) Target
Portfolio are weighted by market capitalization subject to the
restriction that no stock will comprise less than 1% or 25% or more of
the portfolio on the date of this prospectus. The Securities will be
adjusted on a proportionate basis to accommodate this constraint.
The Dow(sm) Dividend and Repurchase Target Portfolio Strategies.
Both the Dow(sm) Dividend and Repurchase Target ("DART") 5 Portfolio
Strategy and the Dow(sm) DART 10 Portfolio Strategy select a portfolio
of DJIA stocks with high dividend yields and/or high buyback ratios and,
for the Dow(sm) DART 5 Portfolio Strategy, high return on assets, as a
means to achieving each Strategy's investment objective. By analyzing
dividend yields, each Strategy seeks to uncover stocks that may be out
of favor or undervalued. More recently, many companies have turned to
stock reduction programs as a tax efficient way to bolster their stock
prices and reward shareholders. Companies which have reduced their
shares through a share buyback program may provide a strong cash flow
position and, in turn, high quality earnings. Buyback ratio is the ratio
of a company's shares of common stock outstanding 12 months prior to the
date of this prospectus divided by a company's shares outstanding as of
the business day prior to the date of this prospectus, minus "1."
Page 22
The Dow(sm) Dividend and Repurchase Target 5 Portfolio Strategy.
The Dow(sm) DART 5 Portfolio stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA by the sum of their
dividend yield and buyback ratio as of the business day prior to the
date of this prospectus.
Step 2: We then select the 10 stocks with the highest combined dividend
yields and buyback ratios.
Step 3: From the 10 stocks selected in Step 2, we select the five stocks
with the greatest increase in the percentage change in return on assets
in the most recent year as compared to the previous year for The Dow(sm)
DART 5 Portfolio.
The Dow(sm) Dividend and Repurchase Target 10 Portfolio Strategy.
The Dow(sm) DART 10 Portfolio stocks are determined as follows:
Step 1: We rank all 30 stocks contained in the DJIA by the sum of their
dividend yield and buyback ratio as of the business day prior to the
date of this prospectus.
Step 2: We then select the 10 stocks with the highest combined dividend
yields and buyback ratios for The Dow(sm) DART 10 Portfolio.
Please note that we applied the strategies which make up the portfolio
for each Trust at a particular time. If we create additional Units of a
Trust after the Initial Date of Deposit we will deposit the Securities
originally selected by applying the strategy at such time. This is true
even if a later application of a strategy would have resulted in the
selection of different securities.
"Dow Jones Industrial Average(sm) ," "Dow(sm)" and "DJIA(sm)" are
service marks of Dow Jones & Company, Inc. ("Dow Jones") and have been
licensed for use for certain purposes by First Trust Advisors L.P., an
affiliate of ours. Dow Jones does not endorse, sell or promote any of
the Trusts, in particular, The Dow(sm) Target 5 Portfolio, The Dow(sm)
Target 10 Portfolio, The Dow(sm) DART 5 Portfolio and The Dow(sm) DART
10 Portfolio. Dow Jones makes no representation regarding the
advisability of investing in such products.
"S&P," "S&P 500," and "Standard & Poor's" are trademarks of The McGraw-
Hill Companies, Inc. and have been licensed for use by us. The S&P
Target 10 Portfolio is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in such Trust. Please see the
Information Supplement which sets forth certain additional disclaimers
and limitations of liabilities on behalf of Standard & Poor's.
The "Nasdaq 100(registered trademark)," "Nasdaq 100 Index(registered
trademark)," and "Nasdaq(registered trademark)" are trade or service
marks of The Nasdaq Stock Market, Inc. (which with its affiliates are
the "Corporations") and are licensed for use by us. The Nasdaq Target 15
Portfolio has not been passed on by the Corporations as to its legality
or suitability. The Nasdaq Target 15 Portfolio is not issued, endorsed,
sold, or promoted by the Corporations. The Corporations make no
warranties and bear no liability with respect to The Nasdaq Target 15
Portfolio.
"Value Line(registered trademark)," "The Value Line Investment Survey,"
and "Value Line Timeliness(TM) Ranking System" are registered trademarks
of Value Line Securities, Inc. or Value Line Publishing, Inc. that have
been licensed to Nike Securities L.P. The Value Line(registered
trademark) Target Portfolio is not sponsored, recommended, sold or
promoted by Value Line Publishing, Inc. Value Line, Inc. or Value Line
Securities, Inc. ("Value Line"). Value Line makes no representation
regarding the advisability of investing in the Trust.
Dow Jones, Standard & Poor's, The Nasdaq Stock Market, Inc. and Value
Line, as well as the publishers of the FT Index and Hang Seng Index, are
not affiliated with us and have not participated in creating the Trusts
or selecting the Securities for the Trusts. Except as noted above, none
of the index publishers have given us a license to use their index nor
have they approved of any of the information in this prospectus.
Of course, as with any similar investments, there can be no assurance
that the objective of a Trust will be achieved. See "Risk Factors" for a
discussion of the risks of investing in a Trust.
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
Page 23
be particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
Certain of the Securities in certain of the Trusts are 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.
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 13-month life of the Trusts, 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.
Trusts which use dividend yield as a selection criteria employ a
contrarian strategy in which the Securities selected share qualities
that have caused them to have lower share prices or higher dividend
yields than other common stocks in their peer group. There is no
assurance that negative factors affecting the share price or dividend
yield of these Securities will be overcome over the life of the Trusts
or that these Securities will increase in value.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Strategy. Please note that we applied the strategies which make up the
portfolio for each Trust at a particular time. If we create additional
Units of a Trust after the Initial Date of Deposit we will deposit the
Securities originally selected by applying the strategy at such time.
This is true even if a later application of a strategy would have
resulted in the selection of different securities. There is no guarantee
that the strategy or the investment objective of a Trust will be
achieved. The actual performance of the Trusts will be different than
the hypothetical returns of each Trust's comparative index. Because the
Trusts are unmanaged and follow a strategy, the Trustee will not buy or
sell Securities in the event a strategy is not achieving the desired
results.
Energy Industry. Because more than 25% of The S&P Target 10 Portfolio is
invested in companies that explore for, produce, refine, distribute or
sell petroleum or gas products, or provide parts or services to petroleum
or gas companies, this Trust is considered to be concentrated in the energy
industry. A portfolio concentrated in a single industry may present more
risks than a portfolio broadly diversified over several industries. General
problems of the petroleum and gas products industry include volatile
fluctuations in price and supply of energy fuels, international politics,
reduced demand as a result of increases in energy efficiency and energy
conservation, the success of exploration projects, clean-up and litigation
costs relating to oil spills and environmental damage, and tax and other
regulatory policies of various governments. Oil production and refining
companies are subject to extensive federal, state and local environmental
laws and regulations regarding air emissions and the disposal of hazardous
materials. In addition, declines in U.S. and Russian crude oil production
will likely lead to a greater world dependence on oil from OPEC nations
which may result in more volatile oil prices.
Healthcare Industry. The S&P Target 10 Portfolio is also considered
to be concentrated in the healthcare industry. General risks of such
companies involve extensive competition, generic drug sales or the loss
of patent protection, product liability litigation and increased government
regulation. Research and development costs of bringing new drugs to
market are substantial, and there is no guarantee that the product will
ever come to market. Healthcare facility operators may be affected by
the demand for services, efforts by government or insurers to limit
rates, restriction of government financial assistance and competition
from other providers.
Technology Industry. The Nasdaq Target 15 Portfolio and Value
Line(registered trademark) Target Portfolio are each considered to be
concentrated in technology stocks. Technology companies are generally
subject to the risks of rapidly changing technologies; short product
life cycles; fierce competition; aggressive pricing 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 Philip Morris Companies, Inc., or of the
industries represented by these issuers, may negatively impact the share
prices of these Securities. We cannot predict what impact any pending or
threatened litigation will have on the share prices of the Securities.
Foreign Stocks. Certain of the Securities in certain Trusts are issued
by foreign companies, which makes these Trusts subject to more risks
Page 24
than if they invested solely in domestic common stocks. Risks of foreign
common stocks include higher brokerage costs; different accounting
standards; expropriation, nationalization or other adverse political or
economic developments; currency devaluations, blockages or transfer
restrictions; restrictions on foreign investments and exchange of
securities; inadequate financial information; lack of liquidity of
certain foreign markets; and less government supervision and regulation
of exchanges, brokers, and issuers in foreign countries.
The purchase and sale of the foreign Securities will generally occur
only in foreign securities markets. Although we do not believe that the
Trusts will have problems buying and selling these Securities, certain
of the factors stated above may make it impossible to buy or sell them
in a timely manner.
United Kingdom. The Global Target 15 Portfolio is considered to be
concentrated in common stocks of U.K. issuers. The United Kingdom is one
of 15 members of the European Union ("EU") which was formed by the
Maastricht Treaty on European Union. It is expected that the Treaty will
have the effect of eliminating most remaining trade barriers between the
member nations and make Europe one of the largest common markets in the
world. However, the uncertain implementation of the Treaty provisions
and recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and their effect on Securities issued by U.K. issuers
impossible to predict.
Unlike a majority of EU members, the United Kingdom did not convert its
currency to the new common European currency, the euro, on January 1,
1999. All companies with significant markets or operations in Europe
face strategic challenges as these entities adapt to a single currency.
The euro conversion may materially impact revenues, expenses or income;
increase competition; affect issuers' currency exchange rate risk and
derivatives exposure; cause issuers to increase spending on information
technology updates; and result in potentially adverse tax consequences.
We cannot predict when or if the United Kingdom will convert to the euro
or what impact the implementation of the euro throughout a majority of
EU countries will have on U.K. or European issuers.
Hong Kong. The Global Target 15 Portfolio is also considered to be
concentrated in common stocks of Hong Kong issuers. Hong Kong issuers
are subject to risks related to Hong Kong's political and economic
environment, the volatility of the Hong Kong stock market, and the
concentration of real estate companies in the Hang Seng Index. Hong Kong
reverted to Chinese control on July 1, 1997 and any increase in
uncertainty as to the future economic and political status of Hong Kong,
or a deterioration of the relationship between China and the United
States, could have negative implications on stocks listed on the Hong
Kong stock market. Securities prices on the Hong Kong Stock Exchange,
and specifically the Hang Seng Index, can be highly volatile and are
sensitive to developments in Hong Kong and China, as well as other world
markets.
Exchange Rates. Because securities of foreign issuers generally pay
dividends and trade in foreign currencies, the U.S. dollar value of
these Securities (and therefore Units of the International Trusts) will
vary with fluctuations in foreign exchange rates. Most foreign
currencies have fluctuated widely in value against the U.S. dollar for
various economic and political reasons. The recent conversion by 11 of
the 15 EU members of their national currencies to the euro could
negatively impact the market rate of exchange between such currencies
(or the newly created euro) and the U.S. dollar.
To determine the value of foreign Securities or their dividends, the
Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, these markets can be quite volatile, depending on the activity
of the large international commercial banks, various central banks,
large multi-national corporations, speculators and other buyers and
sellers of foreign currencies. Since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated
by the Evaluator may not reflect the amount the International Trusts
would receive, in U.S. dollars, had the Trustee sold any particular
currency in the market.
Hypothetical Performance Information
The following table compares hypothetical performance information for
the strategies employed by each Trust and the actual performance of the
DJIA, S&P 500 Index, Nasdaq 100 Index, FT Index, Hang Seng Index and a
Page 25
combination of the FT Index, Hang Seng Index and the DJIA (the
"Cumulative Index Returns") in each of the full years listed below (and
as of the most recent quarter).
These hypothetical returns should not be used to predict future
performance of the Trusts. Returns from a Trust will differ from its
strategy for several reasons, including the following:
- Total Return figures shown do not reflect commissions or taxes.
- Strategy returns are for calendar years (and through the most recent
quarter), while the Trusts begin and end on various dates.
- Trusts have a maturity longer than one year.
- Trusts may not be fully invested at all times or equally weighted in
all stocks comprising a strategy.
- Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- For Trusts investing in foreign Securities, currency exchange rates
may differ.
You should note that the Trusts are not designed to parallel movements
in any index or combination of indexes, and it is not expected that they
will do so. In fact, each Trust's strategy underperformed its
comparative index, or combination thereof, in certain years and we
cannot guarantee that a Trust will outperform its respective index over
the life of a Trust or over consecutive rollover periods, if available.
Each index differs widely in size and focus, as described below.
DJIA. The DJIA consists of 30 U.S. stocks chosen by the editors of The
Wall Street Journal as being representative of the broad market and of
American industry. Changes in the component stocks of the DJIA are made
entirely by the editors of The Wall Street Journal without consulting
the companies, the stock exchange or any official agency. For the sake
of continuity, changes are made rarely.
S&P 500 Index. The S&P 500 Index consists of 500 stocks chosen by
Standard and Poor's to be representative of the leaders of various
industries.
Nasdaq 100 Index. The NASDAQ 100 Index consists of the 100 largest and
most active non-financial domestic and international companies listed on
the NASDAQ National Market System.
Financial Times Industrial Ordinary Share Index. The FT Index consists
of 30 common stocks chosen by the editors of The Financial Times as
being representative of British industry and commerce.
Hang Seng Index. The Hang Seng Index consists of 33 of the stocks
currently listed on the Stock Exchange of Hong Kong Ltd. and is intended
to represent four major market sectors: commerce and industry, finance,
property and utilities.
Page 26
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN(2)
(Strategy figures reflect the deduction of sales charges and expenses but not brokerage commissions or taxes.)
Hypothetical Strategy Total Returns(1)
___________________________________________________________________________________________________________
Value Line
Global The S&P The Nasdaq (registered trademark) The Dow(sm) The Dow(sm)
Target 5 Target 10 Target 15 Target 10 Target 15 Target DART 5 DART 10
Year Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategy
____ ________ _________ _________ _________ _________ __________ ___________ ___________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1972 19.21% 20.04% 14.47% 19.97%
1973 17.53% 1.67% 8.38% -4.60%
1974 -7.65% -3.32% -0.17% -9.41%
1975 61.94% 53.34% 44.97% 54.93%
1976 38.31% 32.57% 27.47% 32.51%
1977 3.14% -4.23% 0.97% -4.29%
1978 -1.09% -2.27% 8.54% -4.29%
1979 7.45% 10.59% 15.12% 10.53%
1980 39.03% 25.35% 48.08% 49.80% 41.27% 22.22%
1981 0.86% 5.09% -2.43% -12.86% -8.32% -0.36%
1982 40.71% 24.58% -5.20% 35.50% 19.51% 24.85%
1983 33.77% 36.43% 13.00% 17.45% 34.33% 37.72%
1984 8.72% 3.86% 27.14% 13.81% 10.92% 3.80%
1985 35.71% 26.98% 51.11% 40.73% 31.93% 40.50% 36.60%
1986 28.32% 33.02% 35.30% 19.23% 19.18% 19.95% 46.70% 39.22%
1987 8.29% 3.23% 14.89% 6.70% 11.61% 16.71% 3.62% 2.83%
1988 18.98% 22.05% 21.57% 17.78% -2.94% -8.16% 15.87% 16.48%
1989 8.15% 24.43% 13.36% 36.89% 34.65% 46.22% 37.44% 25.88%
1990 -17.89% -10.05% 0.70% -7.96% -7.70% 3.35% 3.36% -1.10%
1991 59.22% 31.60% 37.57% 22.04% 106.05% 84.50% 39.85% 41.10%
1992 20.40% 5.32% 23.93% 22.06% -2.50% -2.53% 10.43% 6.09%
1993 31.42% 24.54% 62.61% 39.41% 25.94% 25.20% 17.35% 18.59%
1994 5.90% 1.87% -9.65% 5.72% 8.05% 13.80% -8.04% -2.19%
1995 27.93% 34.23% 10.86% 22.65% 50.99% 52.57% 43.81% 35.44%
1996 23.67% 25.80% 18.34% 23.99% 57.17% 54.79% 32.78% 32.26%
1997 17.50% 19.19% -8.78% 58.56% 32.48% 34.39% 19.12% 23.05%
1998 9.95% 8.19% 10.91% 51.01% 119.78% 91.42% 24.82% 17.41%
1999 -9.51% 2.71% 6.33% 1.08% 97.39% 106.43% 17.27% 15.94%
2000 -20.36% -16.17% -16.96% -13.62% 27.56% 26.21% -7.55% -9.42%
(thru 6/30)
</TABLE>
<TABLE>
<CAPTION>
Index Total Returns
____________________________________________________
Cumulative
Hang Seng S&P 500 Nasdaq Index
Year DJIA FT Index Index Index 100 Index Returns(3)
____ ______ ________ _________ _______ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1972 18.38% 18.89%
1973 -13.20% -14.57%
1974 -23.64% -26.33%
1975 44.46% 36.84%
1976 22.80% 23.64%
1977 -12.91% -7.25%
1978 2.66% 6.49%
1979 10.60% 3.59% 77.99% 18.22% 30.73%
1980 21.90% 31.77% 65.48% 32.11% 39.72%
1981 -3.61% -5.30% -12.34% -4.92% -7.08%
1982 26.85% 0.42% -48.01% 21.14% -6.91%
1983 25.82% 21.94% -2.04% 22.28% 15.24%
1984 1.29% 2.15% 42.61% 6.22% 15.35%
1985 33.28% 54.74% 50.95% 31.77% 46.32%
1986 27.00% 24.36% 51.16% 18.31% 6.89% 34.18%
1987 5.66% 37.13% -6.84% 5.33% 10.49% 11.99%
1988 16.03% 9.00% 21.04% 16.64% 13.54% 15.36%
1989 32.09% 20.07% 10.59% 31.35% 26.17% 20.92%
1990 -0.73% 11.03% 11.71% -3.30% -10.41% 7.34%
1991 24.19% 8.77% 50.68% 30.40% 64.99% 27.88%
1992 7.39% -3.13% 34.73% 7.62% 8.86% 12.99%
1993 16.87% 19.22% 124.95% 9.95% 11.67% 53.68%
1994 5.03% 1.97% -29.34% 1.34% 1.74% -7.45%
1995 36.67% 16.21% 27.52% 37.22% 43.01% 26.80%
1996 28.71% 18.35% 37.86% 22.82% 42.74% 28.31%
1997 24.82% 14.78% -17.69% 33.21% 20.76% 7.30%
1998 18.03% 12.32% -2.60% 28.57% 85.43% 9.25%
1999 27.06% 15.25% 71.34% 20.94% 102.08% 37.88%
2000 -8.44% -15.63% -3.77% -0.44% 1.53% -9.28%
(thru 6/30)
____________
<FN>
(1) The Strategy stocks for each Strategy for a given year consist of
the common stocks selected by applying the respective Strategy as of the
beginning of the period (and not the date the Trusts actually sell Units).
(2) Total Return represents the sum of the change in market value of
each group of stocks between the first and last trading day of a period
plus the total dividends paid on each group of stocks during such period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return figures assume that all
dividends are reinvested semi-annually (except for the FT Index and Hang
Seng Index from 12/31/78 through 12/31/86, during which time annual
reinvestment was assumed) and all returns are stated in terms of U.S.
dollars. Based on the year-by-year returns contained in the table, over
the full years listed above, the Target 5 Strategy, the Target 10
Strategy, the Global Target 15 Strategy, The S&P Target 10 Strategy, The
Nasdaq Target 15 Strategy, the Value Line(registered trademark) Target
Strategy, The Dow(sm) DART 5 Strategy and The Dow(sm) DART 10 Strategy
achieved an average annual total return of 17.42%, 15.32%, 16.89%,
22.53%, 33.94%, 34.19%, 18.98% and %, respectively. In addition, over
each stated period, each individual strategy, except the Global Target
15 Strategy, achieved a greater average annual total return than that of
its corresponding index, the DJIA; the combination of the FT Index, Hang
Seng Index and DJIA (the "Cumulative Index"); the S&P 500 Index; and the
Nasdaq 100 Index which were 13.91%, 18.82%, 13.96% and 27.06%,
respectively.
(3) Cumulative Index Returns represent the weighted average of the
annual returns of the stocks contained in the FT Index, Hang Seng Index
and DJIA. Cumulative Index Returns do not represent an actual index.
</FN>
</TABLE>
Page 27
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The total sales charge (which combines an initial up-front sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities, changes in the
relevant currency exchange rates, changes in the applicable commissions,
stamp taxes, custodial fees and other costs associated with foreign
trading, and changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for a
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of each Trust portfolio, legal fees and
the initial fees and expenses of the Trustee) will be purchased in the
same proportionate relationship as all the Securities contained in a
Trust. Securities will be sold to reimburse the Sponsor for a Trust's
organization costs at the end of the initial offering period (a
significantly shorter time period than the life of the Trusts). During
the initial offering period, there may be a decrease in the value of the
Securities. To the extent the proceeds from the sale of these Securities
are insufficient to repay the Sponsor for Trust organization costs, the
Trustee will sell additional Securities to allow a Trust to fully
reimburse the Sponsor. In that event, the net asset value per Unit of a
Trust will be reduced by the amount of additional Securities sold.
Although the dollar amount of the reimbursement due to the Sponsor will
remain fixed and will never exceed the per Unit amount set forth for a
Trust in "Notes to Statements of Net Assets," this will result in a
greater effective cost per Unit to Unit holders for the reimbursement to
the Sponsor. To the extent actual organization costs are less than the
estimated amount, only the actual organization costs will be deducted
from the assets of a Trust. When Securities are sold to reimburse the
Sponsor for organization costs, the Trustee will sell Securities, to the
extent practicable, which will maintain the same proportionate
relationship among the Securities contained in a Trust as existed prior
to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is equal to the difference between the maximum sales charge of
2.65% of the Public Offering Price and the maximum remaining deferred
sales charge (initially $.165 per Unit). 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 per Unit exceeds $10.00, the initial sales charge will
exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, ten monthly deferred sales
charges of $.0165 per Unit will be deducted from a Trust's assets on
approximately the twentieth day of each month from November 20, 2000
through August 20, 2001. If you buy Units at a price of less than $10.00
per Unit, the dollar amount of the deferred sales charge will not
change, but the deferred sales charge on a percentage basis will be more
than 1.65% of the Public Offering Price.
Page 28
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:
Your maximum
If you invest sales charge
(in thousands)* will be
_______________ ____________
$50 but less than $100 2.40%
$100 but less than $150 2.15%
$150 but less than $500 1.80%
$500 but less than $1,000 1.65%
$1,000 or more 0.90%
*Breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trusts in this prospectus with any other same day purchases of
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the party
making the sale.
If you commit to purchase Units of the Trusts, or subsequent series of
the Trusts, valued at $1,000,000 or more over a 12-month period,
commencing with your first purchase you will receive the reduced sales
charge set forth above on all individual purchases over $83,000.
You may use your Rollover proceeds from a previous series of a Trust to
purchase Units of a Trust at the Public Offering Price less 1.00% (for
Rollover purchases of $1,000,000 or more, the deferred sales charge will
be limited to 0.90% of the Public Offering Price), but you will not be
eligible to receive the reduced sales charges described in the above
table. In addition, you may use termination proceeds from other unit
investments trusts with a similar strategy as a Trust, or redemption or
termination proceeds from any unit investment trust we sponsor, to
purchase Units of the Trust 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 these 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.
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
a Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, including Fee Accounts Units, you will be
credited the difference between your maximum sales charge and the
maximum deferred sales charge at the time you buy your Units. If you
elect to have distributions reinvested into additional Units of 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
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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
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current ask prices are unavailable, the
valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
The total value of the Securities in the Global Target 15 Portfolio
during the initial offering period is computed on the basis of the
offering side value of the relevant currency exchange rate expressed in
U.S. dollars as of the Evaluation Time.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary. In
addition, during this period the aggregate underlying value of the
Securities is computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars as of the
Evaluation Time.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
reflect a concession or agency commission of 2.25% of the Public
Offering Price per Unit. However, for Units subject to a sales charge
which are purchased using redemption or termination proceeds or on
purchases by Rollover Unit holders, this amount will be reduced to 1.3%
of the sales price of these Units (0.5% for Rollover purchases of
$1,000,000 or more).
Dealers and other selling agents who sell Units of a Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total sales per Trust Additional
(in millions) Concession
_____________________ __________
$1 but less than $3 0.050%
$3 but less than $5 0.100%
$5 or more 0.150%
Dealers and other selling agents 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. Dealers and other selling agents who,
during any consecutive 12-month period, sell at least $2 billion worth
of primary market units of unit investment trusts sponsored by us will
receive a concession of $30,000 in the month following the achievement
of this level. We reserve the right to change the amount of concessions
or agency commissions from time to time. If we reacquire, or the Trustee
redeems, Units from brokers, dealers or other selling agents while a
market is being maintained for such Units, such entities agree to
immediately repay to us any concession or agency commission relating to
the reacquired Units. Certain commercial banks may be making Units of
the Trusts available to their customers on an agency basis. A portion of
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the sales charge paid by these customers is kept by or given to the
banks in the amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of a Trust (which
may show performance net of the expenses and charges a Trust would have
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on
other taxable investments such as the common stocks comprising various
market 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 for each Trust less any reduced sales charge as stated
in "Public Offering." Also, any difference between our cost to purchase
the Securities and the price at which we sell them to a Trust is
considered a profit or loss (see Note 2 of "Notes to Schedules of
Investments"). During the initial offering period, dealers and others
may also realize profits or sustain losses as a result of fluctuations
in the Public Offering Price they receive when they sell the Units.
In maintaining a market for Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or
redeem your Units before you have paid the total deferred sales charge
on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trusts are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of the
Trusts from the Income Account of a Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
Page 31
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trusts and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trusts. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase
research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fee paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such service in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. 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 .35%. The total amount of any
accrued but unpaid creation and development fee is paid to the Sponsor
on a monthly basis from the assets of 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% of a Unit holder's initial investment. We do not use
this fee to pay distribution expenses or as compensation for sales
efforts.
In addition to a Trust's operating expenses, and the fees described
above, the Trusts may also incur the following charges:
- A quarterly license fee (which will fluctuate with a Trust's net asset
value) payable by certain of the Trusts for the use of certain
trademarks and trade names of Dow Jones, Standard & Poor's, The Nasdaq
Stock Market, Inc. or Value Line;
- All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust;
- Foreign custodial and transaction fees, if any; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
a Trust. Since the Securities are all common stocks and dividend income
is unpredictable, we cannot guarantee that dividends will be sufficient
to meet any or all expenses of a Trust. If there is not enough cash in
the Income or Capital Accounts of a Trust, the Trustee has the power to
sell Securities in a Trust to make cash available to pay these charges
which may result in capital gains or losses to you. See "Tax Status."
Tax Status
United States Taxation.
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.
Page 32
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by a Trust, and as
such you will be considered to have received a pro rata share of income
(i.e., dividends and capital gains, if any) from each Security when such
income is considered to be received by a Trust. This is true even if you
elect to have your distributions automatically reinvested into
additional Units. In addition, the income from the Trust which you must
take into account for federal income tax purposes is not reduced for
amounts used to pay Trust expenses (including the deferred sales charge,
if any).
Your Tax Basis and Income or Loss Upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total amount received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units,
generally including sales charges, among each Security or other Trust
asset ratably according to their value on the date you purchase your
Units. In certain circumstances, however, you may have to adjust your
tax basis after you purchase your Units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and
profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The Tax Code may, however, treat certain capital gains
as ordinary income in special situations.
Rollovers.
If you elect to have your proceeds from a Trust rolled over into the
next series of such Trust, it is considered a sale for federal income
tax purposes, and any gain on the sale will be treated as a capital
gain, and any loss will be treated as a capital loss. However, any loss
you incur in connection with the exchange of your Units of a Trust for
units of the next series will generally be disallowed with respect to
this deemed sale and subsequent deemed repurchase, to the extent the two
trusts have substantially identical Securities under the wash sale
provisions of the Internal Revenue Code.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") from a Domestic Trust when you
redeem your Units (except for Fee Accounts) 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 such Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of a Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by a Trust that are treated as U.S. source income (e.g.,
dividends received on Securities of domestic corporations) will
generally be subject to U.S. income taxation and withholding in the case
of Units held by non-resident alien individuals, foreign corporations or
other non-U.S. persons, subject to any applicable treaty. However,
distributions by a Trust that are derived from dividends of Securities
of a foreign corporation and that are not effectively connected to your
Page 33
conduct of a trade or business within the United States will generally
not be subject to U.S. income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other U.S. persons, provided that less than 25% of the gross income of
the foreign corporation over the three-year period ending with the close
of the taxable year preceding payment was effectively connected to the
conduct of a trade or business within the United States.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
United Kingdom Taxation.
The following summary describes certain important U.K. tax consequences
for certain U.S. Unit holders who hold Units in the Global Target 15
Portfolio as capital assets. This summary is intended to be a general
guide only and is subject to any changes in law occurring after the date
of this prospectus. You should consult your own tax advisor about your
particular circumstances.
Taxation of Dividends. A U.K. resident individual who receives a
dividend from a U.K. company is generally entitled to a tax credit,
which is either offset against U.K. tax liabilities or, in certain
circumstances, repaid.
You will not be able to claim any refund of the tax credit for dividends
paid by U.K. companies.
Taxation of Capital Gains. U.S. investors who are neither resident nor
ordinarily resident in the United Kingdom will not generally be liable
for U.K. tax on gains arising on the disposal of Units in the Global
Target 15 Portfolio. However, they may be liable if the Units are used,
held or acquired for the purposes of a trade, profession or vocation
carried on in the United Kingdom. Individual U.S. investors may also be
liable if they have previously been resident or ordinarily resident in
the United Kingdom and become resident or ordinarily resident in the
United Kingdom in the future.
Inheritance Tax. Individual U.S. investors who are domiciled in the
United States and who are not U.K. nationals will generally not be
subject to U.K. inheritance tax on death or on gifts of the Units made
during their lifetimes, provided any applicable U.S. federal gift or
estate tax is paid. They may be subject to U.K. inheritance tax if the
Units are used in a business in the United Kingdom or relate to the
performance of personal services in the United Kingdom.
Where the Units are held on trust, the Units will generally not be
subject to U.K. inheritance tax unless the settlor, at the time of
settlement, was domiciled in the United Kingdom, in which case they may
be subject to tax.
It is very unlikely that the Units will be subject to both U.K.
inheritance tax and U.S. federal gift or estate tax. If they were, one
of the taxes could generally be credited against the other.
Stamp Tax. A sale of Securities listed in the FT Index will generally
result in either U.K. stamp duty or stamp duty reserve tax being payable
by the purchaser. The Global Target 15 Portfolio paid this tax when it
acquired Securities. When the Global Target 15 Portfolio sells
Securities, it is anticipated that the tax will be paid by the purchaser.
Hong Kong Taxation.
The following summary describes certain important Hong Kong tax
consequences to certain U.S. Unit holders who hold Units in the Global
Target 15 Portfolio as capital assets. This summary assumes that you are
not carrying on a trade, profession or business in Hong Kong and that
you have no profits sourced in Hong Kong arising from the carrying on of
such trade, profession or business. This summary is intended to be a
general guide only and is subject to any changes in Hong Kong or U.S.
law occurring after the date of this prospectus and you should consult
your own tax advisor about your particular circumstances.
Taxation of Dividends. Dividends you receive from the Global Target 15
Portfolio relating to Hong Kong issuers are not taxable and therefore
will not be subject to the deduction of any withholding tax.
Profits Tax. Unless you are carrying on a trade, profession or business
in Hong Kong you will not be subject to profits tax imposed by Hong Kong
on any gain or profits made on the realization or other disposal of your
Units.
Estate Duty. Units of the Global Target 15 Portfolio do not give rise to
Hong Kong estate duty liability.
Page 34
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 signature
guaranteed by an eligible institution. In certain cases the Trustee may
require additional documentation before they will transfer or redeem
your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
your Trust;
- The number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you:
- A summary of transactions in 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
- 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.
Page 35
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. Dividends received on foreign Securities, if any, are
converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses, on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the sale of the Securities. However, if you own Units of a Domestic
Trust, you may elect to receive an In-Kind Distribution as described
under "Amending or Terminating the Indenture." All Unit holders will
receive a pro rata share of any other assets remaining in their Trust,
after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of that Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. 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
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
Page 36
redemption will be taken from the Capital Account of a Trust. The IRS
will require the Trustee to withhold a portion of your redemption
proceeds if the Trustee does not have your TIN as generally discussed
under "Income and Capital Distributions."
If you tender 1,000 Units or more of a Domestic Trust for redemption
(except for Fee Accounts), rather than receiving cash, you may elect to
receive an In-Kind Distribution in an amount equal to the Redemption
Price per Unit by making this request in writing to the Trustee at the
time of tender. However, no In-Kind Distribution requests submitted
during the nine business days prior to 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 underlying value of the Securities held in that Trust;
and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of such Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, during the
initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Investing in a New Trust
Each Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When each Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of a Trust (the "New Trusts") if one is available. We
intend to create the New Trusts in conjunction with the termination of
the Trusts and plan to apply the same strategy we used to select the
portfolio for the Trusts to the New Trusts.
If you wish to have the proceeds from your Units rolled into a New Trust
you must notify the Trustee in writing of your election by the Rollover
Notification Date stated in the "Summary of Essential Information." As a
Rollover Unit holder, your Units will be redeemed and the underlying
Securities sold by the Trustee, in its capacity as Distribution Agent,
during the Special Redemption and Liquidation Period. The Distribution
Agent may engage us or other brokers as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of a New Trust or trust with a similar investment
Page 37
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject only to the maximum remaining deferred sales charge on such
units (currently expected to be $.165 per unit). Units purchased using
proceeds from Fee Accounts Units will generally not be subject to any
deferred sales charge.
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in a New Trust's portfolio.
Rollover Unit holders will be given first priority to purchase New Trust
units. We cannot, however, assure the exact timing of the creation of
New Trust units or the total number of New Trust units we will create.
Any proceeds not invested on behalf of Rollover Unit holders in New
Trust units will be distributed within a reasonable time after such
occurrence. Although we believe that enough New Trust units can be
created, monies in a New Trust may not be fully invested on the next
business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." If you elect not to
participate as a Rollover Unit holder ("Remaining Unit holders"), you
will not incur capital gains or losses due to the Special Redemption and
Liquidation, nor will you be charged any additional sales charge. We may
modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of a Trust, will reject any offer for new or exchanged securities
or property in exchange for a Security, such as those acquired in a
merger or other transaction. If such exchanged securities or property
are nevertheless acquired by a Trust, at our instruction they will
either be sold or held in such Trust. In making the determination as to
whether to sell or hold the exchanged securities or property we may get
advice from the Portfolio Supervisor. Any proceeds received from the
sale of Securities, exchanged securities or property will be credited to
the Capital Account of a Trust for distribution to Unit holders or to
meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trusts to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us, or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of Units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trusts' portfolio
transactions, or when acting as agent for the Trusts in acquiring or
selling Securities on behalf of the Trusts.
Page 38
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date. A Trust may be terminated prior to the
Mandatory Termination Date:
- Upon the consent of 100% of the Unit holders;
- If the value of the Securities owned by such Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire sales charge; however, termination of a Trust
before the Mandatory Termination Date for any other stated reason will
result in all remaining unpaid deferred sales charges on your Units
being deducted from your termination proceeds. For various reasons,
including Unit holders' participation as Rollover Unit holders, a Trust
may be reduced below the Discretionary Liquidation Amount and could
therefore be terminated before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 1,000 Units of a Domestic 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 of Securities
(reduced by customary transfer and registration charges and subject to
any additional restrictions imposed on Fee Accounts Units by "wrap fee"
plans) rather than the typical cash distribution. You must notify the
Trustee at least ten business days prior to the Mandatory Termination
Date if you elect this In-Kind Distribution option. If you do not elect
to participate in either the Rollover Option or the In-Kind Distribution
option, you will receive a cash distribution from the sale of the
remaining Securities, along with your interest in the Income and Capital
Accounts, within a reasonable time after your Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from a
Trust any accrued costs, expenses, advances or indemnities provided for
by the Indenture, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to pay any
taxes or other governmental charges.
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.
Page 39
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
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.
Page 40
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 41
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Page 43
FIRST TRUST(registered trademark)
The Dow(sm) Target 5 Portfolio, October 2000 Series
The Dow(sm) Target 10 Portfolio, October 2000 Series
Global Target 15 Portfolio, October 2000 Series
The S&P Target 10 Portfolio, October 2000 Series
The Nasdaq Target 15 Portfolio, October 2000 Series
Value Line(registered trademark) Target Portfolio, October 2000 Series
The Dow(sm) DART 5 Portfolio, October 2000 Series
The Dow(sm) DART 10 Portfolio, October 2000 Series
FT 454
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trusts are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-43200) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.;
Washington, D.C. 20549-0102
e-mail address: [email protected]
September 29, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 44
First Trust (registered trademark)
TARGET PORTFOLIO SERIES
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Target Portfolio Series not found in the prospectus for
the Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should
consider before investing in a Trust. This Information Supplement should
be read in conjunction with the prospectus for the Trust in which an
investor is considering investing.
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Dow Jones & Company, Inc. 1
Standard & Poor's 2
The Nasdaq Stock Market, Inc. 2
Value Line Publishing, Inc. 3
Risk Factors
Securities 3
Dividends 4
Foreign Issuers 4
United Kingdom 5
Hong Kong 5
Exchange Rate 6
Litigation
Tobacco Industry 10
Concentrations
Energy Companies 10
Healthcare Companies 11
Real Estate Companies 12
Technology Companies 14
Portfolios
Equity Securities Selected for The Dow(sm) Target 5 Portfolio, October 2000 Series 15
Equity Securities Selected for The Dow(sm) Target 10 Portfolio, October 2000 Series 15
Equity Securities Selected for Global Target 15 Portfolio, October 2000 Series 16
Equity Securities Selected for The S&P Target 10 Portfolio, October 2000 Series 17
Equity Securities Selected for The Nasdaq Target 15 Portfolio, October 2000 Series 18
Equity Securities Selected for Value Line(registered trademark) Target Portfolio, October 2000 Series 19
Equity Securities Selected for The Dow(sm) DART 5 Portfolio, October 2000 Series 20
Equity Securities Selected for The Dow(sm) DART 10 Portfolio, October 2000 Series 21
</TABLE>
Dow Jones & Company, Inc.
The Trusts are not sponsored, endorsed, sold or promoted by Dow Jones &
Company, Inc. ("Dow Jones"). Dow Jones makes no representation or
warranty, express or implied, to the owners of the Trusts or any member
of the public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only relationship to
the Sponsor is the licensing of certain trademarks, trade names and
service marks of Dow Jones and of the Dow Jones Industrial Average(sm),
which is determined, composed and calculated by Dow Jones without regard
to the Sponsor or the Trusts. Dow Jones has no obligation to take the
needs of the Sponsor or the owners of the Trusts into consideration in
Page 1
determining, composing or calculating the Dow Jones Industrial
Average(sm). Dow Jones is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities of the
Trusts to be issued or in the determination or calculation of the
equation by which the Trusts are to be converted into cash. Dow Jones
has no obligation or liability in connection with the administration,
marketing or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES INDUSTRIAL AVERAGE(SM) OR ANY DATA INCLUDED THEREIN AND DOW
JONES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS THEREIN. DOW JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES INDUSTRIAL
AVERAGE(SM) OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE DOW JONES INDUSTRIAL AVERAGE(SM) OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
Standard & Poor's
The Trusts are not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes
no representation or warranty, express or implied, to the owners of the
Trusts or any member of the public regarding the advisability of
investing in securities generally or in the Trusts particularly or the
ability of the S&P 500 Index to track general stock market performance.
S&P's only relationship to the licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index, which is
determined, composed and calculated by S&P without regard to the
licensee or the Trusts. S&P has no obligation to take the needs of the
licensee or the owners of the Trusts into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for
and has not participated in the determination of the prices and amount
of the Trusts or the timing of the issuance or sale of the Trusts or in
the determination or calculation of the equation by which the Trusts are
to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the Trusts.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
LICENSEE, OWNERS OF THE TRUSTS, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES,
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
The Nasdaq Stock Market, Inc.
The Nasdaq Target 15 Portfolio Series is not sponsored, endorsed, sold
or promoted by The Nasdaq Stock Market, Inc. (including its affiliates)
(Nasdaq, with its affiliates, are referred to as the "Corporations").
The Corporations have not passed on the legality or suitability of, or
the accuracy or adequacy of descriptions and disclosures relating to The
Nasdaq Target 15 Portfolio Series. The Corporations make no
representation or warranty, express or implied, to the owners of Units
of The Nasdaq Target 15 Portfolio Series or any member of the public
regarding the advisability of investing in securities generally or in
The Nasdaq Target 15 Portfolio Series particularly, or the ability of
the Nasdaq 100 Index(registered trademark) to track general stock market
Page 2
performance. The Corporations' only relationship to the Sponsor
("Licensee") is in the licensing of the Nasdaq 100(registered
trademark), Nasdaq 100 Index(registered trademark) and Nasdaq(registered
trademark) trademarks or service marks, and certain trade names of the
Corporations and the use of the Nasdaq 100 Index(registered trademark)
which is determined, composed and calculated by Nasdaq without regard to
Licensee or The Nasdaq Target 15 Portfolio Series. Nasdaq has no
obligation to take the needs of the Licensee or the owners of Units of
The Nasdaq Target 15 Portfolio Series into consideration in determining,
composing or calculating the Nasdaq 100 Index(registered trademark). The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at or quantities of The Nasdaq
Target 15 Portfolio Series to be issued or in the determination or
calculation of the equation by which The Nasdaq Target 15 Portfolio
Series is to be converted into cash. The Corporations have no liability
in connection with the administration, marketing or trading of The
Nasdaq Target 15 Portfolio Series.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ 100 INDEX(registered trademark) OR ANY DATA
INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE NASDAQ
TARGET 15 PORTFOLIO SERIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE NASDAQ 100 INDEX(registered trademark) OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ 100
INDEX(registered trademark) OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY
OF SUCH DAMAGES.
Value Line Publishing, Inc.
Value Line Publishing, Inc.'s ("VLPI") only relationship to Nike is
VLPI's licensing to Nike of certain VLPI trademarks and trade names and
the Value Line(registered trademark) Timeliness(TM) Ranking System (the
"System"), which is composed by VLPI without regard to Nike, this
Product or any investor. VLPI has no obligation to take the needs of
Nike or any investor in the Product into consideration in composing the
System. The Product results may differ from the hypothetical or
published results of the Value Line(registered trademark) Timeliness(TM)
Ranking System. VLPI is not responsible for and has not participated in
the determination of the prices and composition of the Product or the
timing of the issuance for sale of the Product or in the calculation of
the equations by which the Product is to be converted into cash.
VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING
FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND
VLPI MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS
THAT MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS
GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY
REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES
NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED
FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION
WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II)
FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY
INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND
IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER
CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY
DAMAGES IN CONNECTION WITH THE PRODUCT.
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
Page 3
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. Shareholders of common stocks of the type held
by the Trusts have a right to receive dividends only when and if, and in
the amounts, declared by the issuer's board of directors and have a
right to participate in amounts available for distribution by the issuer
only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same
degree of protection of capital as do debt securities. The issuance of
additional debt securities or preferred stock will create prior claims
for payment of principal, interest and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock
with respect to assets of the issuer upon liquidation or bankruptcy.
Cumulative preferred stock dividends must be paid before common stock
dividends, and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred
stock. Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Foreign Issuers. Since certain or all of the Securities included in the
International Trusts consist of securities of foreign issuers, an
investment in such Trusts involves certain investment risks that are
different in some respects from an investment in a trust which invests
entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Securities, the possibility that the financial condition of the
issuers of the Securities may become impaired or that the general
condition of the relevant stock market may worsen (both of which would
contribute directly to a decrease in the value of the Securities and
thus in the value of the Units), the limited liquidity and relatively
small market capitalization of the relevant securities market,
expropriation or confiscatory taxation, economic uncertainties and
foreign currency devaluations and fluctuations. In addition, for foreign
issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign
issuers are less liquid and their prices more volatile than securities
of comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and 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
International Trusts, the Sponsor believes that adequate information
will be available to allow the Supervisor to provide portfolio
surveillance for such 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 United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities. See "Exchange Rate" below.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the International Trusts are
subject to exchange control restrictions under existing law which would
materially interfere with payment to such 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 such a Trust. The
adoption of exchange control regulations and other legal restrictions
Page 4
could have an adverse impact on the marketability of international
securities in the International Trusts and on the ability of such Trusts
to satisfy their obligation to redeem Units tendered to the Trustee for
redemption. In addition, restrictions on the settlement of transactions
on either the purchase or sale side, or both, could cause delays or
increase the costs associated with the purchase and sale of the foreign
Securities and correspondingly could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to a Trust relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by a
Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the International Trust will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and makes a
significant contribution to the country's balance of payments. The
portfolios of the International Trusts may contain common stocks of
British companies engaged in such industries as banking, chemicals,
building and construction, transportation, telecommunications and
insurance. Many of these industries may be subject to government
regulation, which may have a materially adverse effect on the
performance of their stock. In the first quarter of 1998, gross domestic
product (GDP) of the United Kingdom grew to a level 3.0% higher than in
the first quarter of 1997, however the overall rate of GDP growth has
slowed since the third quarter of 1997. The slow down largely reflects a
deteriorating trade position and higher indirect taxes. The average
quarterly rate of GDP growth in the United Kingdom (as well as in Europe
generally) has been decelerating since 1994. The United Kingdom is a
member of the European Union (the "EU") which was created through the
formation of the Maastricht Treaty on European Union in late 1993. It is
expected that the Treaty will have the effect of eliminating most
remaining trade barriers between the 15 member nations and make Europe
one of the largest common markets in the world. However, the effective
implementation of the Treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of
Securities issued by United Kingdom companies impossible to predict.
A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in this conversion on January 1, 1999
and the Sponsor is unable to predict if or when the United Kingdom will
convert to the euro. Moreover, it is not possible to accurately predict
the effect of the current political and economic situation upon long-
term inflation and balance of trade cycles and how these changes, as
well as the implementation of a common currency throughout a majority of
EU countries, would affect the currency exchange rate between the U.S.
dollar and the British pound sterling. In addition, United Kingdom
companies with significant markets or operations in other European
countries (whether or not such countries are participating) face
strategic challenges as these entities adapt to a single trans-national
currency. The euro conversion may have a material impact on revenues,
expenses or income from operations; increase competition due to the
increased price transparency of EU markets; affect issuers' currency
exchange rate risk and derivatives exposure; disrupt current contracts;
cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax
consequences. The Sponsor is unable to predict what impact, if any, the
euro conversion will have on any of the Securities issued by United
Kingdom companies in the International Trusts.
Hong Kong. Hong Kong, established as a British colony in the 1840's,
reverted to Chinese sovereignty effective July 1, 1997. On such date,
Hong Kong became a Special Administrative Region ("SAR") of China. Hong
Kong's new constitution is the Basic Law (promulgated by China in 1990).
Prior to July 1, 1997, the Hong Kong government followed a laissez-faire
Page 5
policy toward industry. There were no major import, export or foreign
exchange restrictions. Regulation of business was generally minimal with
certain exceptions, including regulated entry into certain sectors of
the economy and a fixed exchange rate regime by which the Hong Kong
dollar has been pegged to the U.S. dollar. Over the past two decades
through 1996, the gross domestic product (GDP) has tripled in real
terms, equivalent to an average annual growth rate of 6%. However, Hong
Kong's recent economic data has not been encouraging. The full impact of
the Asian financial crisis, as well as current international economic
instability, is likely to continue to have a negative impact on the Hong
Kong economy in the near future.
Although China has committed by treaty to preserve for 50 years the
economic and social freedoms enjoyed in Hong Kong prior to the
reversion, the continuation of the economic system in Hong Kong after
the reversion will be dependent on the Chinese government, and there can
be no assurances that the commitment made by China regarding Hong Kong
will be maintained. Prior to the reversion, legislation was enacted in
Hong Kong designed to extend democratic voting procedures for Hong
Kong's legislature. China has expressed disagreement with this
legislation, which it states is in contravention of the principles
evidenced in the Basic Law of the Hong Kong SAR. The National Peoples'
Congress of China has passed a resolution to the effect that the
Legislative Council and certain other councils and boards of the Hong
Kong Government were to be terminated on June 30, 1997. Such bodies have
subsequently been reconstituted in accordance with China's
interpretation of the Basic Law. Any increase in uncertainty as to the
future economic and political status of Hong Kong could have a
materially adverse effect on the value of the Global Target 15
Portfolio. The Sponsor is unable to predict the level of market
liquidity or volatility which may occur as a result of the reversion to
sovereignty, both of which may negatively impact such Trust and the
value of the Units.
The currency crisis which has affected a majority of Asian markets since
mid-1997 has forced Hong Kong leaders to address whether to devalue the
Hong Kong dollar or maintain its peg to the U.S. dollar. During the
volatile markets of 1998, the Hong Kong Monetary Authority (the "HKMA")
acquired the common stock of certain Hong Kong issuers listed on the
Hong Kong Stock Exchange in an effort to stabilize the Hong Kong dollar
and thwart currency speculators. Government intervention may hurt Hong
Kong's reputation as a free market and increases concerns that
authorities are not willing to let Hong Kong's currency system function
autonomously. This may undermine confidence in the Hong Kong dollar's
peg to the U.S. dollar. Any downturn in economic growth or increase in
the rate of inflation in China or Hong Kong could have a materially
adverse effect on the value of the Global Target 15 Portfolio.
Securities prices on the Hong Kong Stock Exchange, and specifically the
Hang Seng Index, can be highly volatile and are sensitive to
developments in Hong Kong and China, as well as other world markets. For
example, the Hang Seng Index declined by approximately 31% in October,
1997 as a result of speculation that the Hong Kong dollar would become
the next victim of the Asian currency crisis, and in 1989, the Hang Seng
Index dropped 1,216 points (approximately 58%) in early June following
the events at Tiananmen Square. The Hang Seng Index gradually climbed
subsequent to the events at Tiananmen Square, but fell by 181 points on
October 13, 1989 (approximately 6.5%) following a substantial fall in
the U.S. stock markets. During 1994, the Hang Seng Index lost
approximately 31% of its value. From January through August of 1998,
during a period marked by international economic instability and a
global currency crisis, the Hang Seng Index declined by nearly 27%. The
Hang Seng Index is subject to change and delisting of any issues may
have an adverse impact on the performance of the Global Target 15
Portfolio, although delisting would not necessarily result in the
disposal of the stock of these companies, nor would it prevent such
Trust from purchasing additional Securities. In recent years, a number
of companies, comprising approximately 10% of the total capitalization
of the Hang Seng Index, have delisted. In addition, as a result of Hong
Kong's reversion to Chinese sovereignty, an increased number of Chinese
companies could become listed on the Hong Kong Stock Exchange, thereby
changing the composition of the stock market and, potentially, the
composition of the Hang Seng Index.
Exchange Rate. The International Trusts are comprised either totally or
substantially of Securities that are principally traded in foreign
currencies and as such, involve investment risks that are substantially
different from an investment in a fund which invests in securities that
are principally traded in United States dollars. The United States
dollar value of the portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the
United States dollar foreign exchange rates for the relevant currencies.
Most foreign currencies have fluctuated widely in value against the
Page 6
United States dollar for many reasons, including supply and demand of
the respective currency, the rate of inflation in the respective
economies compared to the United States, the impact of interest rate
differentials between different currencies on the movement of foreign
currency rates, the balance of imports and exports goods and services,
the soundness of the world economy and the strength of the respective
economy as compared to the economies of the United States and other
countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of
fixed exchange rates and the convertibility of the United States dollar
into gold through foreign central banks. Starting in 1971, growing
volatility in the foreign exchange markets caused the United States to
abandon gold convertibility and to effect a small devaluation of the
United States dollar. In 1973, the system of fixed exchange rates
between a number of the most important industrial countries of the
world, among them the United States and most Western European countries,
was completely abandoned. Subsequently, major industrialized countries
have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have
continued to "peg" their currencies to the United States dollar although
there has been some interest in recent years in "pegging" currencies to
"baskets" of other currencies or to a Special Drawing Right administered
by the International Monetary Fund. Since 1983, the Hong Kong dollar has
been pegged to the U.S. dollar. In Europe, the euro has been developed.
Currencies are generally traded by leading international commercial
banks and institutional investors (including corporate treasurers, money
managers, pension funds and insurance companies). From time to time,
central banks in a number of countries also are major buyers and sellers
of foreign currencies, mostly for the purpose of preventing or reducing
substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling and the Hong Kong dollar:
Page 7
Foreign Exchange Rates
Range of Fluctuations in Foreign Currencies
United Kingdom
Annual Pound Sterling/ Hong Kong/
Period U.S. Dollar U.S. Dollar
_____ _____________ ___________
1983 0.616-0.707 6.480-8.700
1984 0.670-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.499-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763
1996 0.583-0.670 7.732-7.742
1997 0.584-0.633 7.708-7.751
1998 0.584-0.620 7.735-7.749
1999 0.597-0.646 7.746-7.775
Source: Bloomberg L.P.
Page 8
<TABLE>
<CAPTION>
End of Month Exchange Rates End of Month Exchange Rates
for Foreign Currencies for Foreign Currencies (continued)
United Kingdom United Kingdom
Pound Sterling/ Hong Kong/ Pound Sterling/ Hong Kong/
Monthly Period U.S. Dollar U.S.Dollar Monthly Period U.S. Dollar U.S.Dollar
___________ __________ ________ __________ __________ _______
<S> <C> <C> <C> <C> <C>
1993: 1997:
January .673 7.734 January .624 7.750
February .701 7.734 February .614 7.744
March .660 7.731 March .611 7.749
April .635 7.730 April .616 7.746
May .640 7.724 May .610 7.748
June .671 7.743 June .600 7.747
July .674 7.761 July .609 7.742
August .670 7.755 August .622 7.750
September .668 7.734 September .619 7.738
October .676 7.733 October .598 7.731
November .673 7.725 November .592 7.730
December .677 7.723 December .607 7.749
1994: 1998:
January .664 7.724 January .613 7.735
February .673 7.727 February .609 7.743
March .674 7.737 March .598 7.749
April .659 7.725 April .598 7.747
May .662 7.726 May .613 7.749
June .648 7.730 June .600 7.748
July .648 7.725 July .613 7.748
August .652 7.728 August .595 7.749
September .634 7.727 September .589 7.749
October .611 7.724 October .596 7.747
November .639 7.731 November .607 7.743
December .639 7.738 December .602 7.746
1995: 1999:
January .633 7.732 January .608 7.748
February .631 7.730 February .624 7.748
March .617 7.733 March .621 7.750
April .620 7.742 April .621 7.750
May .630 7.735 May .624 7.755
June .627 7.736 June .634 7.758
July .626 7.738 July .617 7.762
August .645 7.741 August .623 7.765
September .631 7.732 September .607 7.768
October .633 7.727 October .608 7.768
November .652 7.731 November .626 7.767
December .645 7.733 December .618 7.774
1996: 2000:
January .661 7.728 January .619 7.780
February .653 7.731 February .633 7.783
March .655 7.734 March .628 7.787
April .664 7.735 April .645 7.789
May .645 7.736 May .666 7.792
June .644 7.741 June .661 7.796
July .642 7.735 July .667 7.799
August .639 7.733 August .691 7.799
September .639 7.733 September 28 .681 7.798
October .615 7.732
November .595 7.732
December .583 7.735
</TABLE>
Source: Bloomberg L.P.
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
Page 9
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the
International Trusts would receive had the Trustee sold any particular
currency in the market. The foreign exchange transactions of the
International Trusts will be conducted by the Trustee with foreign
exchange dealers acting as principals on a spot (i.e., cash) buying
basis. Although foreign exchange dealers trade on a net basis, they do
realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price
at which they are willing to sell the currency (offer price).
Litigation
Tobacco Industry. Certain of the issuers of Securities in certain Trusts
may be involved in the manufacture, distribution and sale of tobacco
products. Pending litigation proceedings against such issuers in the
United States and abroad cover a wide range of matters including product
liability and consumer protection. Damages claimed in such litigation
alleging personal injury (both individual and class actions), and in
health cost recovery cases brought by governments, labor unions and
similar entities seeking reimbursement for health care expenditures,
aggregate many billions of dollars.
In November 1998, certain companies in the U.S. tobacco industry entered
into a negotiated settlement with several states which would result in
the resolution of significant litigation and regulatory issues affecting
the tobacco industry generally. The proposed settlement, while extremely
costly to the tobacco industry, would significantly reduce uncertainties
facing the industry and increase stability in business and capital
markets. Future litigation and/or legislation could adversely affect the
value, operating revenues and financial position of tobacco companies.
The Sponsor is unable to predict the outcome of litigation pending
against tobacco companies or how the current uncertainty concerning
regulatory and legislative measures will ultimately be resolved. These
and other possible developments may have a significant impact upon both
the price of such Securities and the value of Units of Trusts containing
such Securities.
Concentrations
Energy Companies. The S&P Target 10 Portfolio is considered to be
concentrated in companies involved in the energy industry. The business
activities of these companies may include: production, generation,
transmission, marketing, control, or measurement of gas and oil; the
provision of component parts or services to companies engaged in the
above activities; energy research or experimentation; and environmental
activities related to the solution of energy problems, such as energy
conservation and pollution control.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the price
and supply of energy fuels. Swift price and supply fluctuations may be
caused by events relating to international politics, energy conservation,
the success of exploration projects, and tax and other regulatory policies
of various governments. As a result of the foregoing, the Securities in
The S&P Target 10 Portfolio may be subject to rapid price volatility. The
Sponsor is unable to predict what impact the foregoing factors will have
on the Securities during the life of The S&P Target 10 Portfolio.
According to the U.S. Department of Commerce, the factors which will most
likely shape the energy industry include the price and availability of oil
from the Middle East, changes in U.S. environmental policies and the
continued decline in U.S. production of crude oil. Possible effects of
these factors may be increased U.S. and world dependence on oil from the
Organization of Petroleum Exporting Countries ("OPEC") and highly uncertain
and potentially more volatile oil prices. Factors which the Sponsor believes
may increase the profitability of oil and petroleum operations include
increasing demand for oil and petroleum products as a result of the continued
increases in annual miles driven and the improvement in refinery operating
margins caused by increases in average domestic refinery utilization rates.
The existence of surplus crude oil production capacity and the willingness to
adjust production levels are the two principal requirements for stable crude
oil markets. Without excess capacity, supply disruptions in some countries
cannot be compensated for by others. Surplus capacity in Saudi Arabia and a
few other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market disruption.
Although unused capacity contributed to market stability in 1990 and 1991, it
ordinarily creates pressure to overproduce and contributes to market
uncertainty. The restoration of a large portion of Kuwait and Iraq's
Page 10
production and export capacity could lead to such a development in the
absence of substantial growth in world oil demand. Formerly, OPEC members
attempted to exercise control over production levels in each country through
a system of mandatory production quotas. Because of the 1990-1991 crisis in
the Middle East, the mandatory system has since been replaced with a voluntary
system. Production under the new system has had to be curtailed on at least
one occasion as a result of weak prices, even in the absence of supplies from
Kuwait and Iraq. The pressure to deviate from mandatory quotas, if they are
reimposed, is likely to be substantial and could lead to a weakening of
prices. In the longer term, additional capacity and production will be
required to accommodate the expected large increases in world oil demand and
to compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased dependence
on OPEC oil, putting refiners at risk of continued and unpredictable supply
disruptions. Increasing sensitivity to environmental concerns will also pose
serious challenges to the industry over the coming decade. Refiners are
likely to be required to make heavy capital investments and make major
production adjustments in order to comply with increasingly stringent
environmental legislation, such as the 1990 amendments to the Clean Air Act.
If the cost of these changes is substantial enough to cut deeply into
profits, smaller refiners may be forced out of the industry entirely.
Moreover, lower consumer demand due to increases in energy efficiency and
conservation, gasoline reformulations that call for less crude oil, warmer
winters or a general slowdown in economic growth in this country and abroad
could negatively affect the price of oil and the profitability of oil
companies. No assurance can be given that the demand for or prices of oil
will increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and refining
operations are subject to extensive federal, state and local environmental
laws and regulations governing air emissions and the disposal of hazardous
materials. Increasingly stringent environmental laws and regulations are
expected to require companies with oil production and refining operations
to devote significant financial and managerial resources to pollution
control. General problems of the oil and petroleum products industry
include the ability of a few influential producers to significantly affect
production, the concomitant volatility of crude oil prices, increasing
public and governmental concern over air emissions, waste product disposal,
fuel quality and the environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum products
industry. While legislation has been enacted to deregulate certain aspects
of the oil industry, no assurances can be given that new or additional
regulations will not be adopted. Each of the problems referred to could
adversely affect the financial stability of the issuers of any petroleum
industry stocks in The S&P Target 10 Portfolio.
Healthcare Companies. The S&P Target 10 Portfolio is considered to be
concentrated in common stocks of companies involved in advanced medical
devices and instruments, drugs and biotech, healthcare/managed care,
hospital management/health services and medical supplies 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. In addition, healthcare facility operators may be affected by
events and conditions including among other things, demand for services,
the ability of the facility to provide the services required,
physicians' confidence in the facility, management capabilities,
competition with other hospitals, efforts by insurers and governmental
agencies to limit rates, legislation establishing state rate-setting
Page 11
agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that
associated with Medicare, Medicaid and other similar third party payor
programs.
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 healthcare and medical
services 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), national health insurance, incentives for
competition in the provision of healthcare services, tax incentives and
penalties related to healthcare insurance premiums and promotion of pre-
paid healthcare plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Securities in the
Trust.
Real Estate Companies. Certain Portfolios are considered to be
concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sales and other related
activities. See "Risk Factors" in the prospectus which will indicate, if
applicable, a Trust's concentration in this industry. Investment in
securities issued by these real estate companies should be made with an
understanding of the many factors which may have an adverse impact on
the credit quality of the particular company or industry. Generally,
these include economic recession, the cyclical nature of real estate
markets, competitive overbuilding, unusually adverse weather conditions,
changing demographics, changes in governmental regulations (including
tax laws and environmental, building, zoning and sales regulations),
increases in real estate taxes or costs of material and labor, the
inability to secure performance guarantees or insurance as required, the
unavailability of investment capital and the inability to obtain
construction financing or mortgage loans at rates acceptable to builders
and purchasers of real estate. Additional risks include an inability to
reduce expenditures associated with a property (such as mortgage
payments and property taxes) when rental revenue declines, and possible
loss upon foreclosure of mortgaged properties if mortgage payments are
not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
REITs are differentiated by the types of real estate properties held and
the actual geographic location of properties and fall into two major
categories: equity REITs emphasize direct property investment, holding
their invested assets primarily in the ownership of real estate or other
equity interests, while mortgage REITs concentrate on real estate
financing, holding their assets primarily in mortgages secured by real
estate. REITs obtain capital funds for investment in underlying real
estate assets by selling debt or equity securities in the public or
institutional capital markets or by bank borrowing. Thus, the returns on
common equities of the REITs in which the Trust invests will be
significantly affected by changes in costs of capital and, particularly
in the case of highly "leveraged" REITs (i.e., those with large amounts
of borrowings outstanding), by changes in the level of interest rates.
The objective of an equity REIT is to purchase income-producing real
estate properties in order to generate high levels of cash flow from
rental income and a gradual asset appreciation, and they typically
invest in properties such as office, retail, industrial, hotel and
apartment buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
Page 12
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
The underlying value of the Securities and a Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in a Trust.
The value of the REITs may at times be particularly sensitive to
devaluation in the event of rising interest rates. Equity REITs are less
likely to be affected by interest rate fluctuations than mortgage REITs
and the nature of the underlying assets of an equity REIT may be
considered more tangible than that of a mortgage REIT. Equity REITs are
more likely to be adversely affected by changes in the value of the
underlying property it owns than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in a Trust may be
adversely affected by increases or decreases in property tax rates and
assessments or reassessments of the properties underlying the REITs by
taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in a Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in a Trust.
Recently, in the wake of Chinese economic development and reform,
certain Hong Kong real estate companies and other investors began
purchasing and developing real estate in southern China, including
Beijing, the Chinese capital. By 1992, however, southern China began to
experience a rise in real estate prices, increases in construction costs
and a tightening of credit markets. Any worsening of these conditions
Page 13
could affect the profitability and financial condition of Hong Kong real
estate companies and could have a materially adverse effect on the value
of a Global Target 15 Portfolio.
Technology Companies. Certain Portfolios are considered to be
concentrated in common stocks of technology companies. See "Risk
Factors" in the prospectus which will indicate, if applicable, a Trust's
concentration in this industry.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
a Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
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
Page 14
rate of growth in the market for low-priced personal computers.
Portfolios
Equity Securities Selected for The Dow(sm) Target 5 Portfolio
AT&T Corp., headquartered in New York, New York, provides voice, data
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
Honeywell International Inc., headquartered in Morristown, New Jersey,
makes products for the textiles, construction, plastics, electronics,
automotive, chemicals, housing, telecommunications, utilities,
packaging, military and commercial aviation industries, and for the
space program.
International Paper Company, headquartered in Purchase, New York,
manufactures printing and writing paper, pulp, tissue, paperboard,
packaging and wood products. The company also manufactures nonwoven
papers, specialty chemicals, specialty panels and laminated products.
The company sells its products primarily in the United States, Europe
and the Pacific Rim.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
Equity Securities Selected for The Dow(sm) Target 10 Portfolio
AT&T Corp., headquartered in New York, New York, provides voice, data
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, explores for, develops and produces crude oil and natural gas;
makes polymers, elastomers, finishes and performance films; makes
specialty fibers and chemicals; produces agricultural products; and
makes electronic materials and medical products. The company
participates in five principal business segments-Petroleum Operations;
Polymers; Fibers; Chemicals; and Diversified Businesses.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
General Motors Corporation, headquartered in Detroit, Michigan,
manufactures and sells cars and trucks worldwide under the trademarks
"Chevrolet," "Oldsmobile," "Pontiac," "Buick," "Saturn," "Cadillac" and
"GMC Trucks."
Honeywell International Inc., headquartered in Morristown, New Jersey,
makes products for the textiles, construction, plastics, electronics,
automotive, chemicals, housing, telecommunications, utilities,
packaging, military and commercial aviation industries, and for the
space program.
International Paper Company, headquartered in Purchase, New York,
manufactures printing and writing paper, pulp, tissue, paperboard,
packaging and wood products. The company also manufactures nonwoven
papers, specialty chemicals, specialty panels and laminated products.
The company sells its products primarily in the United States, Europe
and the Pacific Rim.
Minnesota Mining & Manufacturing Company, headquartered in St. Paul,
Minnesota, manufactures industrial, electronic, health, consumer and
information-imaging products for distribution worldwide. The company's
products include adhesives, abrasives, laser imagers and "Scotch" brand
products.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
Page 15
and Philip Morris Capital Corporation.
Procter & Gamble Company, headquartered in Cincinnati, Ohio,
manufactures consumer products worldwide, including detergents, fabric
conditioners and hard surface cleaners; products for personal cleansing,
oral care, digestive health, hair and skin; paper tissue, disposable
diapers, and pharmaceuticals; and shortenings, oils, snacks, baking
mixes, peanut butter, coffee, drinks and citrus products.
Equity Securities Selected for the Global Target 15 Portfolio
Dow Jones Industrial Average(sm) Companies
AT&T Corp., headquartered in New York, New York, provides voice, data
Page 14
and video telecommunications services; regional, domestic, international
and local communication transmission services; cellular telephone and
other wireless services; and billing, directory and calling card services.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
Honeywell International Inc., headquartered in Morristown, New Jersey,
makes products for the textiles, construction, plastics, electronics,
automotive, chemicals, housing, telecommunications, utilities,
packaging, military and commercial aviation industries, and for the
space program.
International Paper Company, headquartered in Purchase, New York,
manufactures printing and writing paper, pulp, tissue, paperboard,
packaging and wood products. The company also manufactures nonwoven
papers, specialty chemicals, specialty panels and laminated products.
The company sells its products primarily in the United States, Europe
and the Pacific Rim.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
Financial Times Industrial Ordinary Share Index Companies
British Airways Plc operates international and domestic scheduled
passenger airline services, as well as a worldwide air cargo business.
The company is one of the largest airlines in the world.
Imperial Chemical Industries Plc makes specialty chemicals, including
adhesives, fragrance and food ingredient products, oleochemicals,
catalysts, silica products and surfactants; paints and coatings;
acrylics and other materials. The company also manufactures industrial
chemicals such as chlorine and caustic soda; titanium pigments; and
explosives.
Invensys Plc is a global electronics and engineering company operating
through four divisions: Intelligent Automation, Industrial Drive
Systems, Power Systems and Controls. The company's products include
motors, electronic drives, compressors, position sensors and controls,
power transmission products, and software and remote monitoring systems.
Marks & Spencer Plc retails consumer goods and food under the name "St.
Michael." The company sells quality clothing through "Brooks Brothers"
stores in the United States and Japan, sells food through its "Kings
Super Markets" in the United States, and other merchandise through a
chain of retail stores in Canada, Europe and Hong Kong. The company is
also engaged in financial, unit trust, treasury and insurance businesses.
Tate & Lyle Plc is the holding company for an international group of
companies which manufacture, refine, process, distribute and trade
sweeteners, starches and their by-products. Products include white
sugar, molasses and low calorie sweeteners. The company also
manufactures and sells engineered sugar milling equipment and provides
reinsurance services.
Hang Seng Index Companies
Amoy Properties Ltd. is a property investment company. The company's
principal activities are property investment and investment holding and,
through its subsidiaries, property investment for rental income, car
park management and property management.
Cheung Kong Infrastructure Holdings Limited is a diversifed
infrastructure company which develops, invests in and operates
infrastructure projects in Hong Kong, Australia, Canada, China, the
Page 16
Philippines and other countries. The company manufactures concrete,
asphalt and aggregates and also operates power plants.
Hang Lung Development Company Ltd. is an investment holding company
which, through its subsidiaries, is involved in property development for
sale, property investment for rental income, and hotel ownership and
management. The company is also involved in car park and property
management operations. Through its associated companies, the company is
involved in the operation of restaurants and dry cleaning businesses.
Henderson Investment Ltd. is an investment holding company. The
principal activities of its subsidiaries are property development and
investment, investment holding, retailing and the hotel business.
Hysan Development Co. Ltd. is an investment holding company with
subsidiaries in the field of property investment, property development
and capital market investment. The company's profits mainly come from
commercial rental income and luxury residential property located in Hong
Kong.
Equity Securities Selected for The S&P Target 10 Portfolio
Apple Computer, Inc., headquartered in Cupertino, California, designs,
makes and markets microprocessor-based personal computers and related
personal computing and communicating solutions for sale mainly to
education, creative, home, business and government customers.
El Paso Energy Corporation, headquartered in Houston, Texas, owns an
integrated coast-to-coast natural gas pipeline system in the United
States. The company operates in the areas of interstate and intrastate
transportation, gathering and processing of natural gas; the marketing
of natural gas, power, and other commodities; and the operation of
energy infrastructure facilities worldwide.
Enron Corp., headquartered in Houston, Texas, gathers, transports and
markets natural gas at wholesale; explores for and produces natural gas
and crude oil; produces, purchases, transports and markets natural gas
liquids, crude oil and refined petroleum products; and develops,
constructs and operates natural gas-fired power plants.
HCA-The Healthcare Corporation, headquartered in Nashville, Tennessee,
through subsidiaries and affiliated partnerships, is one of the leading
providers of healthcare services in the United States. The company
operates general, acute care and psychiatric hospitals as well as
outpatient surgery centers.
Hartford Financial Services Group, Inc., headquartered in Hartford,
Connecticut, writes commercial property and casualty insurance, personal
automobile and homeowners coverages and a variety of life insurance
plans; and reinsures third-party risks. The company's strategy is to
focus on five core areas: life insurance, reinsurance, commercial lines
property-casualty insurance, personal lines property-casualty insurance,
and international operations.
Lehman Brothers Holdings Inc., headquartered in New York, New York,
through wholly-owned Lehman Brothers Inc., provides securities
underwriting, financial advisory and investment and merchant banking
services, securities and commodities trading as principal and agent, and
asset management to institutional, corporate, government and high-net-
worth individual clients throughout the United States and the world.
Reliant Energy, Inc., headquartered in Houston, Texas, operates as a
diversified international energy services. The company Retail Group
consists of three natural gas utilities and one electric utility, as
well as a retail marketing group, which provides unregulated retail
energy products and services. The company's Wholesale Group invests in
power generation projects and provides wholesale trading and marketing
services as well as natural gas supply, gathering, transportation and
storage.
Tenet Healthcare Corporation, headquartered in Santa Barbara,
California, owns or operates acute care hospitals and related healthcare
facilities in 22 states; and holds investments in other healthcare
companies.
UnitedHealth Group Incorporated, headquartered in Minnetonka, Minnesota,
is aligned into six businesses which work together to provide customers
with an integrated set of health and well-being products and services.
These businesses include: UnitedHealthcare, Uniprise, Ovations,
Specialized Care Services, Ingenix and The Center for Health Care Policy
and Evaluation.
Walgreen Co., headquartered in Deerfield, Illinois, operates a
nationwide chain of retail drugstores throughout the United States and
Puerto Rico. The company's stores sell prescription and nonprescription
drugs, general merchandise, cosmetics, liquor and beverages, toiletries
Page 17
and tobacco products. The company also operates two mail-order facilities.
Equity Securities Selected for The Nasdaq Target 15 Portfolio
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets a broad range of products and services that
enable its customers to construct and upgrade their telecommunications
networks to support increasing user demand for voice, data and video
services.
Adobe Systems Incorporated, headquartered in San Jose, California,
develops, markets and supports computer software products and
technologies that enable users to express and use information across all
print and electronic media.
Altera Corporation, headquartered in San Jose, California, designs,
manufactures and markets programmable logic devices and associated
development tools to the telecommunications, data communications and
industrial applications markets.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Apollo Group, Inc. (Class A), headquartered in Phoenix, Arizona, through
subsidiaries, offers higher education programs and services for working
adults at over 100 campuses and learning centers in the United States,
Puerto Rico and London, England. The company offers accredited degree
programs, certificate programs and customized training.
Biomet, Inc., headquartered in Warsaw, Indiana, and its subsidiaries,
make and sell reconstructive and trauma devices, electrical bone growth
stimulators, orthopedic support devices, operating room supplies,
powered surgical instruments, general surgical instruments, arthroscopy
products and craniomaxillofacial products. The company's products are
used primarily by orthopedic medical specialists in both surgical and
non-surgical therapy.
Genzyme Corporation (General Division), headquartered in Cambridge,
Massachusetts, develops and markets specialty therapeutic, surgical and
diagnostic products, pharmaceuticals and genetic diagnostic services.
The company also develops, makes and markets biological products for the
treatment of cartilage damage, severe burns, chronic skin ulcers and
neurodegenerative diseases.
Linear Technology Corporation, headquartered in Milpitas, California,
designs, makes and markets a broad line of standard high performance
linear integrated circuits using silicon gate complementary metal-oxide
semiconductor (CMOS), BiCMOS and bipolar and complementary bipolar wafer
process technologies.
Maxim Integrated Products, Inc., headquartered in Sunnyvale, California,
designs and makes linear and mixed-signal integrated circuits. The
company's products include data converters, interface circuits,
microprocessor-supervisors and amplifiers.
Herman Miller, Inc., headquartered in Zeeland, Michigan, designs,
manufactures and sells furniture systems, products and related services
primarily for offices. The company's customers also include healthcare
facilities, including hospitals and clinical, industrial and educational
laboratories.
Network Appliance, Inc., headquartered in Sunnyvale, California,
designs, makes, markets and supports high performance network data
storage devices which provide fast, simple, reliable and cost-effective
file service for data-intensive network environments.
Oracle Corporation, headquartered in Redwood Shores, California,
designs, develops, markets and supports computer software products with
a wide variety of uses, including database management, application
development, business intelligence and business applications.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products, including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support, using the UNIX operating system.
Xilinx, Inc., headquartered in San Jose, California, designs, develops
and sells complementary metal-oxide-silicon (CMOS) programmable logic
devices and related design software, including field programmable gate
arrays and erasable programmable logic devices.
Page 18
Equity Securities Selected for the Value Line(registered trademark)
Target Portfolio
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets a broad range of products and services that
enable its customers to construct and upgrade their telecommunications
networks to support increasing user demand for voice, data and video
services.
BARRA, Inc., headquartered in Berkeley, California, develops, markets
and supports application software and information services used to
analyze, manage and trade portfolios of equity, fixed income,
derivatives and other financial instruments. The company and its
subsidiaries are engaged in integrated business activities that combine
technology, data, software and services to help clients make investment
and trading decisions.
CDW Computer Centers, Inc., headquartered in Vernon Hills, Illinois,
sells microcomputer hardware and peripherals including desktop
computers, notebooks and laptops, printing devices, video monitors,
communication equipment, add-on boards and memory and data storage
devices; accessories; networking products; and software.
Cirrus Logic, Inc., headquartered in Austin, Texas, manufactures
integrated circuits for the personal computer, consumer and industrial
markets. The company offers products and technologies for multimedia,
wireless and wireline communications, magnetic hard disk and CD-ROM
storage, and data acquisition applications.
Forward Air Corporation, headquartered in Greeneville, Tennessee,
provides scheduled transportation services to air freight forwarders,
fully integrated air cargo carriers and domestic and international
airlines.
IMPATH Inc., headquartered in New York, New York, provides the expertise
to establish correct diagnosis, accurate prognosis, treatment
determination and patient follow-up, all of which are essential for
making medically optimal and cost-effective cancer management decisions.
The company is focused exclusively on the analysis of cancer, combining
advanced technologies and medical expertise to provide patient-specific
diagnostic, prognostic and treatment information to physicians involved
in the treatment of cancer.
Integrated Device Technology, Inc., headquartered in Santa Clara,
California, designs, develops, makes and sells a broad range of high
performance semiconductor products and modules for its key markets: data
communications and telecommunications equipment; personal computers; and
shared network devices.
IVAX Corporation, headquartered in Miami, Florida, researches, develops,
makes and sells generic and branded pharmaceuticals. The company's
business is focused primarily in oncology products, respiratory products
and specialty generic pharmaceuticals.
Keithley Instruments, Inc., headquartered in Solon, Ohio, provides
electrical measurement solutions to wireless communications,
semiconductor and electronic component manufacturers, other high-growth
areas of the electronics industry and research laboratories.
The Lamson & Sessions Co., headquartered in Cleveland, Ohio, makes and
distributes a broad line of thermoplastic electrical, telecommunication
and engineered sewer products; and distributes a wide variety of
consumer electrical wiring devices. The company's products are sold
mainly to national and regional electrical distributors, power
utilities, regional Bell operating companies and other
telecommunications providers, national and regional retailers, and
government and private builders of sewer and drainage systems.
Mercury Interactive Corporation, headquartered in Sunnyvale, California,
develops, markets and supports a family of automated client/server and
Web-based system (Internet and intranets) tools for testing business-
critical enterprise applications.
Micrel, Incorporated, headquartered in San Jose, California, designs,
develops, manufactures and markets a range of high performance analog
integrated circuits that are used in a wide variety of electronic
products, including those in the communications, computer and industrial
markets.
Mitchell Energy & Development Corp., headquartered in The Woodlands,
Texas, produces natural gas and oil, and gathers and markets natural gas
liquids in Texas, Louisiana and Oklahoma.
Newport Corporation, headquartered in Irvine, California, designs, makes
and markets components and systems which enhance productivity and
capabilities of automated assembly and test and measurement for high
precision manufacturing and engineering applications. The company's
products are used in semiconductor manufacturing and testing, fiber
optic communications and other commercial applications that require ever
increasing higher-precision and tighter tolerances.
Page 19
Oakley, Inc., headquartered in Foothill Ranch, California, designs,
makes and distributes high-performance eyewear and athletic equipment
used by a variety of athletes such as skiers, cyclists, runners,
surfers, golfers, tennis and baseball players, and motocross riders, as
well as for the nonsports market.
Oracle Corporation, headquartered in Redwood Shores, California,
designs, develops, markets and supports computer software products with
a wide variety of uses, including database management, application
development, business intelligence and business applications.
Orthodontic Centers of America, Inc., headquartered in Ponte Vedra
Beach, Florida, develops and manages orthodontic practices located in 41
states. The company's services include operations, financial, marketing
and administrative services provided to the orthodontic centers.
Oxford Health Plans, Inc., headquartered in Trumbull, Connecticut,
provides health benefit plans including point-of-service Freedom and
Liberty Plans, traditional health maintenance organizations, dental
plans and third party employer funded benefit plans in Connecticut,
Florida, Illinois, New Hampshire, New Jersey, New York and Pennsylvania.
Plantronics, Inc., headquartered in Santa Cruz, California, designs,
makes and sells lightweight communication headsets which can be worn
over the head or on either ear; and makes and sells amplified telephone
handsets and specialty telephones for hearing impaired users, and noise-
canceling handsets for use in high-noise environments.
Plexus Corp., headquartered in Neenah, Wisconsin, provides product
realization services to original equipment manufacturers in the
computer, medical, industrial, telecommunications and transportation
electronics industries.
Quest Diagnostics Incorporated, headquartered in Teterboro, New Jersey,
provides diagnostic testing, information and services to physicians,
hospitals, managed care organizations, employers and government
agencies. The wide variety of tests performed on human tissue and fluids
help doctors and hospitals diagnose, treat and monitor disease. The
company also conducts research, specializes in esoteric testing using
genetic screening and other advanced technologies, performs clinical
studies testing, and manufactures and distributes diagnostic test kits
and instruments.
Robert Half International Inc., headquartered in Menlo Park, California,
provides temporary and permanent personnel in the fields of accounting
and finance. The company also provides administrative and office
personnel, paralegal, legal administrative and other legal support
positions, and temporary information technology professionals.
Universal Health Services, Inc. (Class B), headquartered in King of
Prussia, Pennsylvania, owns and operates acute care hospitals,
behavioral health centers and women's hospitals; and operates/manages
surgery and radiation oncology centers.
Waters Corporation, headquartered in Milford, Massachusetts, makes,
distributes and provides high performance liquid chromatography ("HPLC")
instruments, chromatography columns and other consumables, and related
service.
Xilinx, Inc., headquartered in San Jose, California, designs, develops
and sells complementary metal-oxide-silicon (CMOS) programmable logic
devices and related design software, including field programmable gate
arrays and erasable programmable logic devices.
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The Boeing Company, headquartered in Seattle, Washington, produces and
markets commercial jet transports and provides related support services,
principally to commercial customers. The company also develops,
produces, modifies and supports military aircraft and helicopters and
related systems, and electronic, space and missile systems.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, electronic components and instrumentation for
chemical analysis.
Minnesota Mining & Manufacturing Company, headquartered in St. Paul,
Minnesota, manufactures industrial, electronic, health, consumer and
Page 20
information-imaging products for distribution worldwide. The company's
products include adhesives, abrasives, laser imagers and "Scotch" brand
products.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
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The Boeing Company, headquartered in Seattle, Washington, produces and
markets commercial jet transports and provides related support services,
principally to commercial customers. The company also develops,
produces, modifies and supports military aircraft and helicopters and
related systems, and electronic, space and missile systems.
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, explores for, develops and produces crude oil and natural gas;
makes polymers, elastomers, finishes and performance films; makes
specialty fibers and chemicals; produces agricultural products; and
makes electronic materials and medical products. The company
participates in five principal business segments-Petroleum Operations;
Polymers; Fibers; Chemicals; and Diversified Businesses.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
General Motors Corporation, headquartered in Detroit, Michigan,
manufactures and sells cars and trucks worldwide under the trademarks
"Chevrolet," "Oldsmobile," "Pontiac," "Buick," "Saturn," "Cadillac" and
"GMC Trucks."
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, electronic components and instrumentation for
chemical analysis.
Merck & Co., Inc., headquartered in Whitehouse Station, New Jersey, is a
leading pharmaceutical concern that discovers, develops, makes and
markets a broad range of human and animal health products and services.
The company also administers managed prescription drug programs.
Minnesota Mining & Manufacturing Company, headquartered in St. Paul,
Minnesota, manufactures industrial, electronic, health, consumer and
information-imaging products for distribution worldwide. The company's
products include adhesives, abrasives, laser imagers and "Scotch" brand
products.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
United Technologies Corporation, headquartered in Hartford, Connecticut,
makes Pratt & Whitney aircraft jet engines and spare parts; Otis
elevators and escalators; Carrier heating, ventilating and air
conditioning equipment; automotive products and systems; Sikorsky
helicopters; and Hamilton Sundstrand aerospace systems.
We have obtained the foregoing company descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 21
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 454, hereby identifies The First Trust
Special Situations Trust, Series 4; The First Trust Special
Situations Trust, Series 18; The First Trust Special Situations
Trust, Series 69; The First Trust Special Situations Trust,
Series 108; The First Trust Special Situations Trust, Series 119;
The First Trust Special Situations Trust, Series 190; FT 286; The
First Trust Combined Series 272; FT 412; and FT 438 for purposes
of the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 454, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on September 29, 2000.
FT 454
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
David J. Allen Sole Director )
of Nike Securities )
Corporation, the ) September 29, 2000
General Partner of )
Nike Securities L.P. )
)
)
) Robert M. Porcellino
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated September 29, 2000
in Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-43200) and related Prospectus of FT 454.
ERNST & YOUNG LLP
Chicago, Illinois
September 29, 2000
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for FT 454 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as
Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-45455] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed
on behalf of FT 415).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
