Registration No. 333-49558
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 481
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 December 29, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
The Dow(sm) Target 5 Portfolio, January 2001 Series
The Dow(sm) Target 10 Portfolio, January 2001 Series
The S&P Target 10 Portfolio, January 2001 Series
The Nasdaq Target 15 Portfolio, January 2001 Series
Value Line(R)Target Portfolio, January 2001 Series
The Dow(sm) Dividend And Repurchase Target 5
Portfolio, January 2001 Series
The Dow(sm) Dividend And Repurchase Target 10
Portfolio, January 2001 Series
Total Target Portfolio, January 2001 Series
FT 481
FT 481 is a series of a unit investment trust, the FT Series. FT 481
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 (R)
1-800-621-9533
The date of this prospectus is December 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 21
Portfolios 22
Risk Factors 25
Hypothetical Performance Information 26
Public Offering 29
Distribution of Units 31
The Sponsor's Profits 32
The Secondary Market 32
How We Purchase Units 32
Expenses and Charges 32
Tax Status 33
Retirement Plans 35
Rights of Unit Holders 35
Income and Capital Distributions 36
Redeeming Your Units 36
Investing in a New Trust 38
Removing Securities from a Trust 38
Amending or Terminating the Indenture 39
Information on the Sponsor, Trustee and Evaluator 40
Other Information 41
Page 2
Summary of Essential Information
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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)
Target 5 Portfolio Target 10 Portfolio
January January
2001 Series 2001 Series
____________ ___________
<S> <C> <C>
Initial Number of Units (1) 15,003 15,004
Fractional Undivided Interest in the Trust per Unit (1) 1/15,003 1/15,004
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900
Maximum Transactional 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) $ .2798 $ .2405
Cash CUSIP Number 30265X 781 30265X 823
Reinvestment CUSIP Number 30265X 799 30265X 831
Fee Accounts Cash CUSIP Number 30265X 807 30265X 849
Fee Accounts Reinvestment CUSIP Number 30265X 815 30265X 856
Security Code 60111 60107
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 4, 2001
Mandatory Termination Date (7) January 31, 2002
Rollover Notification Date January 1, 2002
Special Redemption and Liquidation Period January 15, 2002 to January 31, 2002
Income Distribution Record Date Fifteenth day of June and December, commencing June 15, 2001.
Income Distribution Date (6) Last day of June and December, commencing June 30, 2001.
______________
<FN>
See "Notes to Summary of Essential Information" on page 5.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 29, 2000
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
The S&P The Nasdaq Value Line(R)
Target 10 Portfolio Target 15 Portfolio Target Portfolio
January January January
2001 Series 2001 Series 2001 Series
__________ __________ __________
<S> <C> <C> <C>
Initial Number of Units (1) 15,001 14,992 15,006
Fractional Undivided Interest in the Trust per Unit (1) 1/15,001 1/14,992 1/15,006
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional 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 30265Y 102 30265Y 144 30265Y 185
Reinvestment CUSIP Number 30265Y 110 30265Y 151 30265Y 193
Fee Accounts Cash CUSIP Number 30265Y 128 30265Y 169 30265Y 201
Fee Accounts Reinvestment CUSIP Number 30265Y 136 30265Y 177 30265Y 219
Security Code 60103 60099 60095
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 4, 2001
Mandatory Termination Date (7) January 31, 2002
Rollover Notification Date January 1, 2002
Special Redemption and Liquidation Period January 15, 2002 to January 31, 2002
Income Distribution Record Date Fifteenth day of June and December, commencing June 15, 2001.
Income Distribution Date (6) Last day of June and December, commencing June 30, 2001.
______________
<FN>
See "Notes to Summary of Essential Information" on page 5.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 481
At the Opening of Business on the Initial Date of Deposit-December 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) Total Target
DART 5 Portfolio DART 10 Portfolio Portfolio
January January January
2001 Series 2001 Series 2001 Series
__________ __________ __________
<S> <C> <C> <C>
Initial Number of Units (1) 15,005 15,011 15,015
Fractional Undivided Interest in the Trust per Unit (1) 1/15,005 1/15,011 1/15,015
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional 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) $ .2138 $ .2034 $ N.A.
Cash CUSIP Number 30265Y 227 30265Y 268 30265Y 300
Reinvestment CUSIP Number 30265Y 235 30265Y 276 30265Y 318
Fee Accounts Cash CUSIP Number 30265Y 243 30265Y 284 30265Y 326
Fee Accounts Reinvestment CUSIP Number 30265Y 250 30265Y 292 30265Y 334
Security Code 60091 60087 60083
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 4, 2001
Mandatory Termination Date (7) January 31, 2002
Rollover Notification Date January 1, 2002
Special Redemption and Liquidation Period January 15, 2002 to January 31, 2002
Income Distribution Record Date Fifteenth day of June and December, commencing June 15, 2001.
Income Distribution Date (6) Last day of June and December, commencing June 30, 2001.
_____________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on January 2, 2001, 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
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. 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 transactional sales charge consists of an initial sales
charge and a deferred sales charge, but does not include the creation
and development fee. 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 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, the Value
Line(R) Target Portfolio or the Total 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)
TARGET 5 PORTFOLIO TARGET 10 PORTFOLIO
JANUARY 2001 SERIES JANUARY 2001 SERIES
_____________________ _____________________ _
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
UNIT HOLDER SALES FEES
(as a percentage of public offering price)
Maximum sales charge
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.65%(b) $.165 1.65%(b) $.165
Creation and development fee cap over the Life of
the Trust 0.30%(c) $.030 0.30%(c) $.030
(the annual creation and development fee is .30% ______ ______ ______ ______
of average daily net assets for the Trust, and is
only charged while a Unit holder remains invested)
Maximum Sales Charges (including creation and 2.95% $.295 2.95% $.295
development fee cap over the life of the Trust)(c) ====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .225%(d) $.0225
====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .107%(f) .0107 .107%(f) .0107
______ ______ ______ ______
Total .167% $.0167 .167% $.0167
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
THE S&P TARGET THE NASDAQ VALUE LINE (R)
10 PORTFOLIO TARGET 15 PORTFOLIO TARGET PORTFOLIO
JANUARY 2001 SERIES JANUARY 2001 SERIES JANUARY 2001 SERIES
_____________________ _____________________ ____________________
Amount Amount Amount
per Unit per Unit per Unit
________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
UNIT HOLDER SALES FEES
(as a percentage of public offering price)
Maximum sales charge
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.65%(b) $.165 1.65%(b) $.165 1.65%(b) $.165
Creation and development fee cap over the Life of
the Trust 0.30%(c) $.030 0.30%(c) $.030 0.30%(c) $.030
(the annual creation and development fee is .30% ______ ______ ______ ______ ______ ______
of average daily net assets for the Trust, and is
only charged while a Unit holder remains invested)
Maximum Sales Charges (including creation and 2.95% $.295 2.95% $.295 2.95% $.295
development fee cap over the life of the Trust)(c) ====== ====== ====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .175%(d) $.0175 .200%(d) $.0200
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .137%(f) .0137 .116%(f) .0116 .178%(f) .0178
______ ______ ______ ______ ______ ______
Total .197% $.0197 .176% $.0176 .238% $.0238
====== ====== ====== ====== ====== ======
</TABLE>
Page 6
<TABLE>
<CAPTION>
THE DOW(sm) THE DOW(sm) TOTAL TARGET
DART 5 PORTFOLIO DART 10 PORTFOLIO PORTFOLIO
JANUARY 2001 SERIES JANUARY 2001 SERIES JANUARY 2001 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
Initial sales charge 1.00%(a) $.100 1.00%(a) $.100 1.00%(a) $.100
Deferred sales charge 1.65%(b) $.165 1.65%(b) $.165 1.65%(b) $.165
Creation and development fee cap over the Life of
the Trust 0.30%(c) $.030 0.30%(c) $.030 0.30%(c) $.030
(the annual creation and development fee is .30% ______ ______ ______ ______ ______ ______
of average daily net assets for the Trust, and is
only charged while a Unit holder remains invested)
Maximum Sales Charges (including creation and 2.95% $.295 2.95% $.295 2.95% $.295
development fee cap over the life of the Trust)(c) ====== ====== ====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .225%(d) $.0225 .200%(d) $.0200
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .107%(f) .0107 .107%(f) .0107 .130%(f) .0130
______ ______ ______ ______ ______ ______
Total .167% $.0167 .167% $.0167 .190% $.0190
====== ====== ====== ====== ====== ======
</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, January 2001 Series $334 $817 $1,325 $2,719
The Dow(sm) Target 10 Portfolio, January 2001 Series 334 817 1,325 2,719
The S&P Target 10 Portfolio, January 2001 Series 337 826 1,340 2,749
The Nasdaq Target 15 Portfolio, January 2001 Series 330 804 1,305 2,678
Value Line(R)Target Portfolio, January 2001 Series 339 830 1,348 2,765
The Dow(sm) DART 5 Portfolio, January 2001 Series 334 817 1,325 2,719
The Dow(sm) DART 10 Portfolio, January 2001 Series 334 817 1,325 2,719
Total Target Portfolio, January 2001 Series 334 816 1,324 2,717
The example assumes that the principal amount and distributions are
rolled annually into a New Trust, and you are subject to a reduced
transactional sales charge.
_____________
<FN>
(a) The combination of the initial and deferred sales charge comprises
what we refer to as the "transactional sales charge." The initial sales
charge is actually equal to the difference between the maximum
transactional sales charge of 2.65% 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 February 20, 2001.
(c) The creation and development fee compensates the Sponsor for creating
and developing the Trusts. For as long as you own Units, this fee will
be accrued daily based on each Trust's net asset value at the annual
rate of .30%. You will only be charged the creation and development fee
while you own Units. Each Trust pays the amount of any accrued creation
and development fee to the Sponsor monthly from such Trust's assets.
Because the creation and development fee is accrued daily on the basis
of each Trust's current net asset value, if the value of your Units
increases, the annual creation and development fee as a percentage of
your initial investment would be greater than .30%. However, in no event
will we collect over the life of the Trust more than 0.30% of your
initial investment.
(d) Estimated organization costs will be deducted from the assets of
each Trust at the end of the initial offering period.
(e) 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.
(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 481
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 481, comprised of The Dow (sm) Target 5
Portfolio, January 2001 Series; The Dow (sm) Target 10 Portfolio,
January 2001 Series; The S&P Target 10 Portfolio, January 2001 Series;
The Nasdaq Target 15 Portfolio, January 2001 Series; Value Line(R)
Target Portfolio, January 2001 Series; The Dow (sm) Dividend And
Repurchase Target 5 Portfolio, January 2001 Series; The Dow (sm)
Dividend And Repurchase Target 10 Portfolio, January 2001 Series; and
Total Target Portfolio, January 2001 Series as of the opening of
business on December 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
December 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 481,
comprised of The Dow (sm) Target 5 Portfolio, January 2001 Series; The
Dow (sm) Target 10 Portfolio, January 2001 Series; The S&P Target 10
Portfolio, January 2001 Series; The Nasdaq Target 15 Portfolio, January
2001 Series; Value Line(R) Target Portfolio, January 2001 Series; The
Dow (sm) Dividend And Repurchase Target 5 Portfolio, January 2001
Series; The Dow (sm) Dividend And Repurchase Target 10 Portfolio,
January 2001 Series; and Total Target Portfolio, January 2001 Series, at
the opening of business on December 29, 2000 in conformity with
accounting principles generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
December 29, 2000
Page 8
Statements of Net Assets
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 29, 2000
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm)
Target 5 Portfolio Target 10 Portfolio
January January
2001 Series 2001 Series
_____________ ____________
<S> <C> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $148,530 $148,540
Less liability for reimbursement to Sponsor for organization costs (3) (338) (338)
Less liability for deferred sales charge (4) (2,475) (2,476)
_________ _________
Net assets $145,717 $145,726
========= =========
Units outstanding 15,003 15,004
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,031 $150,040
Less maximum transactional sales charge (5) (3,976) (3,976)
Less estimated reimbursement to Sponsor for organization costs (3) (338) (338)
_________ _________
Net assets $145,717 $145,726
========= =========
__________
<FN>
See "Notes to Statements of Net Assets" on page 11.
</FN>
</TABLE>
Page 9
Statements of Net Assets
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 29, 2000
<TABLE>
<CAPTION>
The S&P The Nasdaq Value Line(R)
Target 10 Target 15 Target
Portfolio Portfolio Portfolio
January January January
2001 Series 2001 Series 2001 Series
____________ ______________ _____________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,511 $148,422 $148,559
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (262) (300)
Less liability for deferred sales charge (4) (2,475) (2,474) (2,476)
_________ _________ ________
Net assets $145,698 $145,686 $145,783
========= ========= ========
Units outstanding 15,001 14,992 15,006
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,011 $149,921 $150,060
Less maximum transactional sales charge (5) (3,975) (3,973) (3,977)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (262) (300)
_________ _________ ________
Net assets $145,698 $145,686 $145,783
========= ========= ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 11.
</FN>
</TABLE>
Page 10
Statements of Net Assets
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 29, 2000
<TABLE>
<CAPTION>
The Dow(sm) The Dow(sm) Total Target
DART 5 Portfolio DART 10 Portfolio Portfolio
January January January
2001 Series 2001 Series 2001 Series
____________ ______________ ___________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,548 $148,613 $148,648
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (338) (300)
Less liability for deferred sales charge (4) (2,476) (2,477) (2,477)
________ ________ ________
Net assets $145,734 $145,798 $145,871
======== ======== ========
Units outstanding 15,005 15,011 15,015
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,048 $150,114 $150,150
Less maximum transactional sales charge (5) (3,976) (3,978) (3,979)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (338) (300)
________ ________ ________
Net assets $145,734 $145,798 $145,871
======== ======== ========
______________
<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 481, 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 $.0225,
$.0225, $.0225, $.0175, $.0200, $.0225, $.0225 and $.0200 per Unit for
the Target 5 Portfolio, Target 10 Portfolio, The S&P Target 10
Portfolio, The Nasdaq Target 15 Portfolio, Value Line(R) Target
Portfolio, DART 5 Portfolio, DART 10 Portfolio and Total Target
Portfolio, respectively. A payment will be made at the end of the
initial offering period to an account maintained by the Trustee from
which the obligation of the investors to the Sponsor will be satisfied.
To the extent that actual organization costs of a Trust are greater than
the estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.165 per Unit), payable to us in ten equal
monthly installments beginning on February 20, 2001 and on the twentieth
day of each month thereafter (or if such date is not a business day, on
the preceding business day) through November 20, 2001. If you redeem
Units before November 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
transactional 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 the transactional sales
charge as set forth under "Public Offering."
</FN>
</TABLE>
Page 11
Schedule of Investments
The Dow(sm) Target 5 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
624 CAT Caterpillar Inc. 20% $47.625 $ 29,718 2.86%
739 EK Eastman Kodak Company 20% 40.188 29,699 4.38%
700 IP International Paper Company 20% 42.438 29,707 2.36%
665 MO Philip Morris Companies, Inc. 20% 44.688 29,717 4.74%
630 SBC SBC Communications Inc. 20% 47.125 29,689 2.15%
_______ _________
Total Investments 100% $148,530
======= =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 12
Schedule of Investments
The Dow(sm) Target 10 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
312 CAT Caterpillar Inc. 10% $ 47.625 $ 14,859 2.86%
301 DD E.I. du Pont de Nemours & Company 10% 49.313 14,843 2.84%
370 EK Eastman Kodak Company 10% 40.188 14,870 4.38%
171 XOM Exxon Mobil Corporation 10% 86.875 14,856 2.03%
293 GM General Motors Corporation 10% 50.750 14,870 3.94%
350 IP International Paper Company 10% 42.438 14,853 2.36%
122 MMM Minnesota Mining & Manufacturing Company 10% 121.938 14,877 1.90%
332 MO Philip Morris Companies, Inc. 10% 44.688 14,836 4.74%
192 PG Procter & Gamble Company 10% 77.250 14,832 1.81%
315 SBC SBC Communications Inc. 10% 47.125 14,844 2.15%
_______ ________
Total Investments 100% $148,540
======= ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 13
Schedule of Investments
The S&P Target 10 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
143 CAH Cardinal Health, Inc. 10% $103.875 $ 14,854
263 DYN Dynegy Inc. 10% 56.500 14,860
203 EPG El Paso Energy Corporation 10% 73.188 14,857
175 ENE Enron Corp. 10% 84.813 14,842
211 LEH Lehman Brothers Holdings Inc. 10% 70.438 14,862
340 REI Reliant Energy, Inc. 10% 43.625 14,833
272 SPC The St. Paul Companies, Inc. 10% 54.500 14,824
328 THC Tenet Healthcare Corporation 10% 45.250 14,842
238 UNH UnitedHealth Group Incorporated 10% 62.500 14,875
273 WM Washington Mutual, Inc. 10% 54.438 14,862
______ _______
Total Investments 100% $148,511
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 14
Schedule of Investments
The Nasdaq Target 15 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
129 ADBE Adobe Systems Incorporated 5.36% $ 61.625 $ 7,950
513 AMGN Amgen Inc. 22.96% 66.438 34,083
138 BBBY Bed Bath & Beyond Inc. 2.28% 24.500 3,381
87 BMET Biomet, Inc. 2.43% 41.438 3,605
71 CHKP Check Point Software Technologies Ltd. (4) 6.71% 140.359 9,965
86 CTAS Cintas Corporation 3.07% 52.938 4,553
80 CMVT Comverse Technology, Inc. 6.17% 114.438 9,155
112 CEFT Concord EFS, Inc. 3.42% 45.313 5,075
45 GENZ Genzyme Corporation (General Division) 2.64% 87.063 3,918
23 IDPH IDEC Pharmaceuticals Corporation 3.05% 196.750 4,525
162 LLTC Linear Technology Corporation 5.55% 50.813 8,232
1,194 ORCL Oracle Corporation 24.99% 31.063 37,089
30 PCAR PACCAR Inc. 1.00% 49.688 1,491
188 PAYX Paychex, Inc. 6.44% 50.875 9,564
140 PSFT PeopleSoft, Inc. 3.93% 41.688 5,836
______ ________
Total Investments 100% $148,422
===== ========
______________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 15
Schedule of Investments
Value Line(R) Target Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
107 ALSI Advantage Learning Systems, Inc. 2.35% $ 32.688 $ 3,498
49 SLOT Anchor Gaming 1.39% 42.000 2,058
38 BZH Beazer Homes USA, Inc. 1.00% 39.000 1,482
267 CRUS Cirrus Logic, Inc. 3.72% 20.688 5,524
91 COLM Columbia Sportswear Company 3.28% 53.563 4,874
47 DP Diagnostic Products Corporation 1.85% 58.625 2,755
100 EDMC Education Management Corporation 2.58% 38.375 3,838
229 DHI D.R. Horton, Inc. 3.98% 25.813 5,911
50 IMPH IMPATH Inc. 2.36% 70.063 3,503
242 IGT International Game Technology 7.84% 48.125 11,646
172 LEN Lennar Corporation 4.36% 37.625 6,471
178 LNCR Lincare Holdings Inc. 7.32% 61.063 10,869
172 MND Mitchell Energy & Development Corp. 7.34% 63.438 10,911
32 NVR NVR, Inc. 2.68% 124.600 3,987
239 OO Oakley, Inc. 2.30% 14.313 3,421
286 OXHP Oxford Health Plans, Inc. 7.80% 40.500 11,583
92 PPDI Pharmaceutical Product Development, Inc. 3.34% 53.875 4,957
171 PCP Precision Castparts Corp. 4.95% 43.000 7,353
139 PHM Pulte Corporation 3.98% 42.563 5,916
44 RYL The Ryland Group, Inc. 1.21% 40.750 1,793
100 SPF Standard Pacific Corp. 1.64% 24.438 2,444
214 TLB The Talbots, Inc. 6.73% 46.688 9,991
110 TBL The Timberland Company (Class A) 5.12% 69.188 7,611
128 TOL Toll Brothers, Inc. 3.53% 41.000 5,248
98 UHS Universal Health Services, Inc. (Class B) 7.35% 111.375 10,915
________ ________
Total Investments 100% $148,559
======= ========
___________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 16
Schedule of Investments
The Dow(sm) Dividend And Repurchase Target 5 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
739 EK Eastman Kodak Company 20% $ 40.188 $ 29,699 4.38%
916 HWP Hewlett-Packard Company 20% 32.438 29,713 0.99%
244 MMM Minnesota Mining & Manufacturing Company 20% 121.938 29,753 1.90%
665 MO Philip Morris Companies, Inc. 20% 44.688 29,718 4.74%
377 UTX United Technologies Corporation 20% 78.688 29,665 1.14%
______ ________
Total Investments 100% $148,548
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 17
Schedule of Investments
The Dow(sm) Dividend And Repurchase Target 10 Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 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>
227 BA The Boeing Company 10% $ 65.438 $ 14,854 1.04%
312 CAT Caterpillar Inc. 10% 47.625 14,859 2.86%
301 DD E.I. du Pont de Nemours & Company 10% 49.313 14,843 2.84%
370 EK Eastman Kodak Company 10% 40.188 14,870 4.38%
293 GM General Motors Corporation 10% 50.750 14,870 3.94%
458 HWP Hewlett-Packard Company 10% 32.438 14,857 0.99%
157 MRK Merck & Co., Inc. 10% 94.750 14,876 1.44%
122 MMM Minnesota Mining & Manufacturing Company 10% 121.938 14,876 1.90%
332 MO Philip Morris Companies, Inc. 10% 44.688 14,836 4.74%
189 UTX United Technologies Corporation 10% 78.688 14,872 1.14%
______ ________
Total Investments 100% $148,613
===== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 20.
</FN>
</TABLE>
Page 18
Schedule of Investments
Total Target Portfolio, January 2001 Series
FT 481
At the Opening of Business on the
Initial Date of Deposit-December 29, 2000
<TABLE>
<CAPTION>
Number Percentage Market Cost of
of Ticker Symbol and Name of of Aggregate Value Securities to
Shares Issuer of Securities (1) OfferingPrice perShare the Trust (2)
______ _______________________________ ____________ _________ _____________
<C> <S> <C> <C> <C>
Dow(sm) DART 5 Strategy Stocks (33.28%):
________________________________________
246 EK Eastman Kodak Company 6.65% $ 40.188 $ 9,886
305 HWP Hewlett-Packard Company 6.65% 32.438 9,894
81 MMM Minnesota Mining & Manufacturing Company 6.64% 121.938 9,877
222 MO Philip Morris Companies, Inc. 6.67% 44.688 9,921
126 UTX United Technologies Corporation 6.67% 78.688 9,915
S&P Target 10 Strategy Stocks (33.30%):
_______________________________________
48 CAH Cardinal Health, Inc. 3.35% 103.875 4,986
88 DYN Dynegy Inc. 3.34% 56.500 4,972
68 EPG El Paso Energy Corporation 3.35% 73.188 4,977
58 ENE Enron Corp. 3.31% 84.813 4,919
70 LEH Lehman Brothers Holdings Inc. 3.32% 70.438 4,931
113 REI Reliant Energy, Inc. 3.32% 43.625 4,930
91 SPC The St. Paul Companies, Inc. 3.34% 54.500 4,959
109 THC Tenet Healthcare Corporation 3.32% 45.250 4,932
79 UNH UnitedHealth Group Incorporated 3.32% 62.500 4,937
91 WM Washington Mutual, Inc. 3.33% 54.438 4,954
Nasdaq Target 15 Strategy Stocks (33.42%):
__________________________________________
43 ADBE Adobe Systems Incorporated 1.78% 61.625 2,650
171 AMGN Amgen Inc. 7.64% 66.438 11,361
46 BBBY Bed Bath & Beyond Inc. 0.76% 24.500 1,127
29 BMET Biomet, Inc. 0.81% 41.438 1,202
24 CHKP Check Point Software Technologies Ltd. (4) 2.27% 140.359 3,369
29 CTAS Cintas Corporation 1.03% 52.938 1,535
27 CMVT Comverse Technology, Inc. 2.08% 114.438 3,090
37 CEFT Concord EFS, Inc. 1.13% 45.313 1,676
15 GENZ Genzyme Corporation (General Division) 0.88% 87.063 1,306
8 IDPH IDEC Pharmaceuticals Corporation 1.06% 196.750 1,574
54 LLTC Linear Technology Corporation 1.85% 50.813 2,744
398 ORCL Oracle Corporation 8.32% 31.063 12,363
10 PCAR PACCAR Inc. 0.33% 49.688 497
63 PAYX Paychex, Inc. 2.16% 50.875 3,205
47 PSFT PeopleSoft, Inc. 1.32% 41.688 1,959
_______ ________
Total Investments 100% $148,648
======= =========
______________
<FN>
See "Notes to Schedules of Investments" on page 20.
Page 19
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 December 29, 2000. Each Trust has a Mandatory Termination
Date of January 31, 2002.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the listed Securities and the
ask prices of over-the-counter traded Securities at the Evaluation Time
on December 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, January 2001 Series $148,022 $ 508
The Dow(sm) Target 10 Portfolio, January 2001 Series 148,089 451
The S&P Target 10 Portfolio, January 2001 Series 147,717 794
The Nasdaq Target 15 Portfolio, January 2001 Series 147,045 1,377
Value Line(R) Target Portfolio, January 2001 Series 148,795 (236)
The Dow(sm) DART 5 Portfolio, January 2001 Series 147,944 604
The Dow(sm) DART 10 Portfolio, January 2001 Series 148,892 (279)
Total Target Portfolio, January 2001 Series 147,721 927
(3) Current Dividend Yield for each Security was calculated by dividing
the most recent annualized ordinary dividend paid on a Security by that
Security's closing sale price at the Evaluation Time on the business day
prior to the Initial Date of Deposit.
(4) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
</FN>
</TABLE>
Page 20
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
481, consists of eight separate portfolios set forth below:
- The Dow(sm) Target 5 Portfolio
- The Dow(sm) Target 10 Portfolio
- The S&P Target 10 Portfolio
- The Nasdaq Target 15 Portfolio
- Value Line(R) Target Portfolio
- The Dow(sm) DART 5 Portfolio
- The Dow(sm) DART 10 Portfolio
- Total Target 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.
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 transactional 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 21
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 and the Dow(sm) Target 10 Strategy 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 seeks 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.
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.
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.
Page 22
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(R) Target Portfolio Strategy.
The Value Line(R) Target Portfolio invests in 25 of the 100 stocks that
Value Line(R) gives a #1 ranking for Timeliness(TM) which have recently
exhibited certain positive financial attributes. Value Line(R) 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(R) 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(R) 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 the
stocks of companies whose shares are not listed on a U.S. securities
exchange, 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(R) Target Portfolio.
The stocks which comprise the Value Line(R) 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."
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.
Page 23
Total Target Portfolio Strategy.
The objective of the Total Target Portfolio is to provide an above-
average total return through an investment in the common stocks of
companies which are selected by applying three of the strategies
described previously, the Dow(sm) DART 5 Strategy, the S&P Target 10
Strategy and the Nasdaq Target 15 Strategy. While each of these
strategies also seeks to provide an above-average total return, each
follows a different investment strategy. The Trust seeks to outperform
the combined return of the DJIA, the S&P 500 Index and the Nasdaq 100
Index(R). The Trust's objective is to offer enhanced performance over a
pure value strategy while reducing the potential risk of a pure growth
strategy. We believe that this may provide investors with a better
opportunity to succeed regardless of which investment style prevails
moving forward. With the Total Target Strategy investors have the
ability to capture the broader market, a convenient blend of old and new
economy stocks. The Securities which comprise each of the three
strategies which make up the Total Target Portfolio were chosen by
applying the same selection criteria applicable to the individual
strategies. The composition of the Total Target Portfolio on the date of
this prospectus is as follows:
- Approximately 1/3 common stocks which comprise the Dow(sm) DART 5
Strategy;
- Approximately 1/3 common stocks which comprise the S&P Target 10
Strategy; and
- Approximately 1/3 common stocks which comprise the Nasdaq Target 15
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.
"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, The Dow(sm) DART 10
Portfolio and the Total Target 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. Neither the
S&P Target 10 Portfolio nor the Total Target Portfolio is sponsored,
endorsed, sold or promoted by Standard & Poor's and Standard & Poor's
makes no representation regarding the advisability of investing in such
Trusts. Please see the Information Supplement which sets forth certain
additional disclaimers and limitations of liabilities on behalf of
Standard & Poor's.
The "Nasdaq 100(R)," "Nasdaq 100 Index(R)," and "Nasdaq(R)" 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.
Neither The Nasdaq Target 15 Portfolio nor the Total Target Portfolio
has been passed on by the Corporations as to its legality or
suitability. Neither The Nasdaq Target 15 Portfolio nor the Total Target
Portfolio is 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 or the Total Target Portfolio.
"Value Line(R)," "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(R) 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.
Page 24
Risk Factors
Price Volatility. The Trusts invest in common stocks. The value of a
Trust's Units will fluctuate with changes in the value of these common
stocks. Common stock prices fluctuate for several reasons including
changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, or when
political or economic events affecting the issuers occur. In addition,
common stock prices may be particularly sensitive to rising interest
rates, as the cost of capital rises and borrowing costs increase.
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.
Two of the Securities in The Nasdaq Target 15 Portfolio represent
approximately 48% of the value of such Trust. If these stocks decline in
value you may lose a substantial portion of your investment.
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
Page 25
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 is considered to be
concentrated in technology stocks. Technology companies are generally
subject to the risks of rapidly changing technologies; short product
life cycles; fierce competition; aggressive pricing 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
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.
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 and Nasdaq 100 Index and a combination of the DJIA,
S&P 500 Index and Nasdaq 100 Index (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 their respective strategy or strategies.
- Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
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 or strategies 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
Page 26
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.
Page 27
<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)
________________________________________________________________________________________________
The S&P The Nasdaq Value Line(R) The Dow(sm) The Dow(sm) Total
Target 5 Target 10 Target 10 Target 15 Target DART 5 DART 10 Target
Year Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategy
____ ________ _________ _________ __________ _____________ ___________ ___________ ________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1972 19.27% 20.09% 14.53% 20.03%
1973 17.59% 1.72% 8.43% -4.55%
1974 -7.60% -3.26% -0.12% -9.36%
1975 62.01% 53.40% 45.03% 54.99%
1976 38.37% 32.63% 27.53% 32.56%
1977 3.19% -4.18% 1.02% -4.24%
1978 -1.04% -2.22% 8.59% -4.24%
1979 7.50% 10.65% 15.17% 10.58%
1980 39.09% 25.41% 49.86% 41.33% 22.27%
1981 0.91% 5.14% -12.81% -8.27% -0.31%
1982 40.77% 24.64% 35.56% 19.57% 24.91%
1983 33.83% 36.49% 17.51% 34.39% 37.78%
1984 8.77% 3.91% 13.86% 10.97% 3.85%
1985 35.77% 27.04% 40.79% 31.99% 40.56% 36.66%
1986 28.38% 33.08% 19.29% 19.23% 20.01% 46.76% 39.28% 27.48%
1987 8.34% 3.28% 6.75% 11.67% 16.77% 3.67% 2.88% 7.31%
1988 19.04% 22.11% 17.84% -2.89% -8.11% 15.92% 16.54% 10.23%
1989 8.20% 24.49% 36.95% 34.71% 46.28% 37.50% 25.93% 36.33%
1990 -17.85% -10.00% -7.91% -7.65% 3.41% 3.42% -1.05% -4.10%
1991 59.28% 31.66% 22.10% 106.12% 84.57% 39.91% 41.16% 55.97%
1992 20.45% 5.37% 22.12% -2.45% -2.48% 10.48% 6.14% 9.99%
1993 31.47% 24.60% 39.47% 26.00% 25.26% 17.40% 18.65% 27.56%
1994 5.95% 1.92% 5.77% 8.10% 13.86% -7.99% -2.14% 1.91%
1995 27.99% 34.29% 22.71% 51.05% 52.64% 43.88% 35.50% 39.15%
1996 23.73% 25.86% 24.05% 57.23% 54.85% 32.83% 32.32% 37.97%
1997 17.55% 19.24% 58.63% 32.54% 34.45% 19.18% 23.11% 36.72%
1998 10.01% 8.24% 51.07% 119.86% 91.49% 24.88% 17.47% 65.19%
1999 -9.46% 2.76% 1.13% 97.46% 106.50% 17.33% 16.00% 38.56%
2000 -15.58% -9.22% -12.01% 39.51% 28.61% -7.51% -3.01% 6.62%
(thru
9/29)
</TABLE>
<TABLE>
<CAPTION>
Index Total Returns
______________________________________________
Cumulative
S&P 500 Nasdaq Index
Year DJIA Index 100 Index Returns(4)
____ _____ _______ _________ __________
<S> <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% 18.22%
1980 21.90% 32.11%
1981 -3.61% -4.92%
1982 26.85% 21.14%
1983 25.82% 22.28%
1984 1.29% 6.22%
1985 33.28% 31.77%
1986 27.00% 18.31% 6.89% 17.40%
1987 5.66% 5.33% 10.49% 7.16%
1988 16.03% 16.64% 13.54% 15.41%
1989 32.09% 31.35% 26.17% 29.87%
1990 -0.73% -3.30% -10.41% -4.82%
1991 24.19% 30.40% 64.99% 39.85%
1992 7.39% 7.62% 8.86% 7.96%
1993 16.87% 9.95% 11.67% 12.83%
1994 5.03% 1.34% 1.74% 2.71%
1995 36.67% 37.22% 43.01% 38.96%
1996 28.71% 22.82% 42.74% 31.42%
1997 24.82% 33.21% 20.76% 26.26%
1998 18.03% 28.57% 85.43% 44.01%
1999 27.06% 20.94% 102.08% 50.02%
2000 -6.28% -1.39% -3.68% -3.78%
(thru
9/29)
____________
<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. 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 S&P Target 10 Strategy,
The Nasdaq Target 15 Strategy, the Value Line(R) Target Strategy, The
Dow(sm) DART 5 Strategy, The Dow(sm) DART 10 Strategy and the Total
Target Strategy achieved an average annual total return of 17.47%,
15.37%, 21.75%, 34.00%, 34.25%, 19.04%, % and 26.35%, respectively. In
addition, over each stated period, each individual strategy achieved a
greater average annual total return than that of its corresponding
index, the DJIA; the S&P 500 Index; the Nasdaq 100 Index; and the
combination of the DJIA, the S&P 500 Index and the Nasdaq 100 Index (the
"Cumulative Index") which were 13.91%, 13.96%, 27.06% and 21.70%,
respectively.
(3) Cumulative Index Returns represent the weighted average of the annual
returns of the stocks contained in the DJIA, S&P 500 Index and Nasdaq
100 Index. The Cumulative Index Returns are weighted in the same
proportions as the index components appear in the Total Target
Portfolio. For instance, the Cumulative Index is weighted as follows:
DJIA, 33-1/3%; S&P 500 Index, 33-1/3%; Nasdaq 100 Index, 33-1/3%.
Cumulative Index Returns do not represent an actual index.
</FN>
</TABLE>
Page 28
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 maximum transactional sales charge (which combines an initial
upfront sales charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
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).
Transactional Sales Charge.
The transactional 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
transactional 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 February 20, 2001
through November 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 29
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below) the maximum transactional sales charge is
reduced, as follows:
Your maximum
transactional
sales charge
If you invest (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 transactional 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 transactional 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 transactional 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 transactional sales charge. Any reduced
transactional 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
transactional 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 transactional 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 transactional 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 transactional 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 transactional 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 transactional
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
Page 30
remaining deferred sales charge to be collected on such reinvestment
Units. The dollar value of these additional credited Units (as with all
Units) will fluctuate over time, and may be less on the dates deferred
sales charges are collected than their value at the time they were issued.
The Value of the Securities.
The Evaluator will determine 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.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
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 transactional
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 transactional sales charge,
but such Units will be included in determining whether the above volume
sales levels are met. Dealers and other selling agents who, during any
consecutive 12-month period, sell at least $2 billion worth of primary
market units of unit investment trusts sponsored by us will receive a
concession of $30,000 in the month following the achievement of this
level. We reserve the right to change the amount of concessions or
agency commissions from time to time. Certain commercial banks may be
making Units of the Trusts available to their customers on an agency
basis. A portion of the transactional 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
Page 31
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 transactional 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
transactional sales charge per Unit for each Trust less any reduction as
stated in "Public Offering." We will also receive the amount of any
accrued and collected creation and development fee. Also, any difference
between our cost to purchase the Securities and the price at which we
sell them to a Trust is considered a profit or loss (see Note 2 of
"Notes to Schedules of Investments"). During the initial offering
period, dealers and others may also realize profits or sustain losses as
a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees 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 at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of the
Trusts from the Income Account of such Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
Page 32
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 services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of each Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in a Trust's net asset value, is determined by
multiplying the net asset value of the Trust on that day by 1/365 of the
annual creation and development fee of .30%. 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
over the life of the Trusts more than .30% of a Unit holder's initial
investment. We do not use this fee to pay distribution expenses or as
compensation for sales efforts.
In addition to a Trust's operating expenses and those fees described
above, 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. and/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; 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.
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
Page 33
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
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). For tax years beginning after December 31, 2000, the 20%
rate is reduced to 18% and the 10% rate is reduced to 8% for long-term
gains from most property held for more than five years. Because the
Trusts have a maturity of approximately 13 months, the reduction in the
capital gains rate for property held for more than five years could only
possibly apply to your interest in the securities if you are eligible
for and elect to receive an in-kind distribution at redemption or
termination. Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. 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 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.
Page 34
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with 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;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
Page 35
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the sale of the Securities. However, 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 transactional 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
Page 36
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of a Trust. The IRS
will require the Trustee to withhold a portion of your redemption
proceeds if it does not have your TIN as generally discussed under
"Income and Capital Distributions."
If you tender 1,000 Units or more for redemption (except for Fee
Accounts), rather than receiving cash, you may elect to receive an In-
Kind Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to 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
Page 37
Agent may engage us or other brokers as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of a New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject to the maximum remaining deferred sales charge on such units
(currently expected to be $.165 per unit), but not the initial sales
charge. Units purchased using proceeds from Fee Accounts Units will
generally not be subject to any transactional 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 transactional 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
Page 38
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trusts' portfolio
transactions, or when acting as agent for the Trusts in acquiring or
selling Securities on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trusts may be terminated earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire transactional 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 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. See "Tax Status" for
additional information. You must notify the Trustee at least ten
business days prior to the Mandatory Termination Date if you elect this
In-Kind Distribution option. If you do not elect to participate in
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
Page 39
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
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.
Page 40
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 41
This page is intentionally left blank.
Page 42
This page is intentionally left blank.
Page 43
FIRST TRUST(R)
The Dow(sm) Target 5 Portfolio, January 2001 Series
The Dow(sm) Target 10 Portfolio, January 2001 Series
The S&P Target 10 Portfolio, January 2001 Series
The Nasdaq Target 15 Portfolio, January 2001 Series
Value Line(R) Target Portfolio, January 2001 Series
The Dow(sm) DART 5 Portfolio, January 2001 Series
The Dow(sm) DART 10 Portfolio, January 2001 Series
Total Target Portfolio, January 2001 Series
FT 481
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. 333-49558) 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]
December 29, 2000
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 44
First Trust (R)
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 December 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 4
Dividends 4
Foreign Issuers 4
Litigation
Tobacco Industry 5
Concentrations
Energy Companies 5
Healthcare Companies 6
Technology Companies 7
Portfolios
Equity Securities Selected for The Dow(sm) Target 5 Portfolio, January 2001 Series 8
Equity Securities Selected for The Dow(sm) Target 10 Portfolio, January 2001 Series 8
Equity Securities Selected for The S&P Target 10 Portfolio, January 2001 Series 9
Equity Securities Selected for The Nasdaq Target 15 Portfolio, January 2001 Series 10
Equity Securities Selected for Value Line(R) Target Portfolio, January 2001 Series 11
Equity Securities Selected for The Dow(sm) DART 5 Portfolio, January 2001 Series 12
Equity Securities Selected for The Dow(sm) DART 10 Portfolio, January 2001 Series 13
Equity Securities Selected for Total Target Portfolio, January 2001 Series 14
</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
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
Page 1
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.
Neither The Nasdaq Target 15 Portfolio Series nor the Total Target
Portfolio Series is 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 or the Total Target 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 the
Total Target Portfolio Series or any member of the public regarding the
advisability of investing in securities generally or in The Nasdaq
Target 15 Portfolio Series or the Total Target Portfolio Series
particularly, or the ability of the Nasdaq 100 Index(R) to track general
stock market performance. The Corporations' only relationship to the
Sponsor ("Licensee") is in the licensing of the Nasdaq 100(R), Nasdaq
100 Index(R) and Nasdaq(R) trademarks or service marks, and certain
trade names of the Corporations and the use of the Nasdaq 100 Index(R)
Page 2
which is determined, composed and calculated by Nasdaq without regard to
Licensee, The Nasdaq Target 15 Portfolio Series or the Total Target
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
or the Total Target Portfolio Series into consideration in determining,
composing or calculating the Nasdaq 100 Index(R). 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 or the Total Target Portfolio Series to be issued or in the
determination or calculation of the equation by which The Nasdaq Target
15 Portfolio Series or the Total Target Portfolio Series are 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 or the Total Target Portfolio Series.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ 100 INDEX(R) 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, OWNERS OF THE TOTAL TARGET PORTFOLIO SERIES OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF THE NASDAQ 100 INDEX(R) 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(R) 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(R) 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(R) 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 of the Securities included in the 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 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.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to 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 could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of such Trusts to satisfy their obligation to
redeem Units tendered to the Trustee for redemption. In addition,
Page 4
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 a 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.
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
Page 5
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 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
Page 6
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
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.
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
Page 7
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
rate of growth in the market for low-priced personal computers.
Portfolios
Equity Securities Selected for The Dow(sm) Target 5 Portfolio
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.
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.
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.
SBC Communications Inc., headquartered in San Antonio, Texas, provides
landline and wireless telecommunications services and equipment,
directory advertising, publishing and cable television services.
Equity Securities Selected for The Dow(sm) Target 10 Portfolio
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.
Page 8
Exxon Mobil Corporation, headquartered in Irving, Texas, explores for,
produces, transports and sells crude oil and natural gas petroleum
products. The company also explores for and mines coal and other
minerals properties; makes and sells petrochemicals; and owns interests
in electrical power generation facilities.
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."
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.
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.
SBC Communications Inc., headquartered in San Antonio, Texas, provides
landline and wireless telecommunications services and equipment,
directory advertising, publishing and cable television services.
Equity Securities Selected for The S&P Target 10 Portfolio
Cardinal Health, Inc., headquartered in Dublin, Ohio, distributes a
broad line of pharmaceuticals, surgical and hospital supplies,
therapeutic plasma and other specialty pharmaceutical products, health
and beauty care products and other items typically sold by hospitals,
retail drug stores and other healthcare providers. The company also
makes, leases and sells point-of-use pharmacy systems; provides pharmacy
management services; and franchises apothecary-style pharmacies.
Dynegy Inc., headquartered in Houston, Texas, through subsidiaries,
markets natural gas, natural gas liquids, crude oil and electric power;
and gathers, processes and transports natural gas through ownership and
operation of natural gas processing plants, storage facilities and
pipelines in North America and the United Kingdom.
El Paso Energy Corporation, headquartered in Houston, Texas, operates in
the areas of interstate and intrastate transportation; the 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.
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's 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.
Page 9
The St. Paul Companies, Inc., headquartered in St. Paul, Minnesota, with
subsidiaries, provides a broad range of commercial and consumer related
insurance products and services, including property liability insurance
underwriting and reinsurance. The company also provides risk advisory
services and investment banking asset management services.
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.
Washington Mutual, Inc., headquartered in Seattle, Washington, through
subsidiaries, provides financial services to individuals and small to
mid-sized businesses, including accepting deposits from the general
public and making residential and other loans. The company's operations
are conducted through offices throughout the United States.
Equity Securities Selected for The Nasdaq Target 15 Portfolio
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.
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.
Bed Bath & Beyond Inc., headquartered in Union, New Jersey, sells
domestic merchandise (bed linens, bath accessories and kitchen textiles)
and home furnishings (cookware, dinnerware, glassware and basic
housewares) through retail stores.
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.
Check Point Software Technologies Ltd., headquartered in Ramat-Gan,
Israel, develops, sells and supports secure enterprise networking
solutions. The company's integrated architecture includes network
security ("FireWall-1," "VPN-1," "Open Security Manager" and "Provider-
1"), traffic control ("FloodGate-1" and "ConnectControl") and Internet
protocol address management ("Meta IP")
Cintas Corporation, headquartered in Cincinnati, Ohio, designs and
manufactures corporate identity uniforms which they rent or sell to
customers, along with non-uniform equipment. The company also offers
ancillary products which include the sale or rental of walk-off mats,
fender covers, towels, mops and linen products.
Comverse Technology, Inc., headquartered in Woodbury, New York, makes
and sells computer and telecommunications systems for multimedia
communications and information processing applications, which are used
by telephone network operators, government agencies, call centers,
financial institutions and other public and commercial organizations
worldwide.
Concord EFS, Inc., headquartered in Memphis, Tennessee, provides
electronic transaction authorization, processing, settlement and funds
transfer services on a nationwide basis.
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.
IDEC Pharmaceuticals Corporation, headquartered in San Diego,
California, develops products for the long-term management of immune
system cancers and autoimmune and inflammatory diseases. The company's
Page 10
lead immune system, cancer and rheumatoid arthritis products are
genetically engineered to combat disease through the patient's immune
system.
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.
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.
PACCAR Inc., headquartered in Bellevue, Washington, makes light-, medium-
and heavy-duty trucks and related aftermarket parts; and provides
financing and leasing services to customers and dealers. In addition,
the company sells general automotive parts and accessories through
retail outlets.
Paychex, Inc., headquartered in Rochester, New York, provides payroll
processing, human resource and benefits outsourcing solutions for small-
to medium-sized businesses nationwide.
PeopleSoft, Inc., headquartered in Pleasanton, California, develops,
markets and supports public sector software products which are portable
and scaleable families of cross-industry client/server enterprise-wide
applications. The company's products are used in large and medium-sized
companies, higher education institutions and government agencies.
Equity Securities Selected for the Value Line(R) Target Portfolio
Advantage Learning Systems, Inc., headquartered in Wisconsin Rapids,
Wisconsin, provides learning information systems to kindergarten through
senior high (K-12) schools in the United States and Canada. The
company's learning information systems consist of computer software and
related training.
Anchor Gaming, headquartered in Las Vegas, Nevada, develops and
distributes unique proprietary games, operates casinos in Colorado, and
operates one of the largest gaming machine routes in Nevada.
Beazer Homes USA, Inc., headquartered in Atlanta, Georgia, is a single-
family home builder with operations in Georgia, Arizona, California,
Florida, Maryland, Nevada, New Jersey, North Carolina, Pennsylvania,
South Carolina, Tennessee, Texas and Virginia.
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.
Columbia Sportswear Company, headquartered in Portland, Oregon, is one
of the largest outerwear manufacturers in the world and leading seller
of skiwear in the United States.
Diagnostic Products Corporation, headquartered in Los Angeles,
California, develops, makes and markets medical immunodiagnostic test
kits which utilize state-of-the-art technology derived from immunology
and molecular biology, and automated laboratory instruments which
perform the tests.
Education Management Corporation, headquartered in Pittsburgh,
Pennsylvania, provides proprietary postsecondary education in the United
States based on student enrollments and revenues, including associate's
and bachelor's degree programs and non-degree programs in the areas of
design, media arts, culinary arts, fashion and paralegal studies.
D.R. Horton, Inc., headquartered in Arlington, Texas, is one of the most
geographically diversified homebuilders in the United States, with
operating divisions in 23 states. The company positions itself between
large-volume and local custom homebuilders and sells its single-family
homes to the entry-level and move-up market segments.
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.
International Game Technology, headquartered in Reno, Nevada, is an
Page 11
operator and manufacturer of computerized casino gaming products and
proprietary gaming systems.
Lennar Corporation, headquartered in Miami, Florida, is engaged in the
two principal businesses of building and selling homes and providing
mortgage financing services.
Lincare Holdings Inc., headquartered in Clearwater, Florida, is one of
the nation's largest providers of oxygen and other respiratory therapy
services to patients in their homes.
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.
NVR, Inc., headquartered in McLean, Virginia, is a holding company that
currently operates, through its subsidiaries, in two business segments:
the construction and marketing of homes and mortgage banking.
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.
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.
Pharmaceutical Product Development, Inc., headquartered in Wilmington,
North Carolina, provides a broad range of integrated product development
services on a global basis to complement the research and development
activities of companies in the pharmaceutical and biotechnology
industries. The company offers assessment and management of chemical and
environmental health risk and provides research, development and
consulting services in the life, environmental and discovery sciences.
Precision Castparts Corp., headquartered in Portland, Oregon, makes
complex metal components and products, serving a wide variety of
aerospace and general industrial applications. The company manufactures
large, complex structural investment castings and airfoil castings used
in jet aircraft engines. In addition, the company has expanded into the
industrial gas turbine, fluid management, industrial metalworking tools
and machines and other metal products markets.
Pulte Corporation, headquartered in Bloomfield Hills, Michigan, is a
holding company whose subsidiaries are engaged in homebuilding and
financial services businesses.
The Ryland Group, Inc., headquartered in Calabasas, California, and
subsidiaries consist of two business segments: homebuilding and
financial services.
Standard Pacific Corp., headquartered in Irvine, California, is a
geographically diversified builder of single-family homes throughout the
metropolitan markets of California, Arizona and Texas.
The Talbots, Inc., headquartered in Hingham, Massachusetts, sells
classic apparel, shoes and accessories for women, boys and girls through
its retail stores in the United States, Canada, and the United Kingdom,
and through 25 catalogs.
The Timberland Company (Class A), headquartered in Stratham, New
Hampshire, designs, develops, makes and markets boots, shoes, apparel
and accessories under the "Timberland" brand name.
Toll Brothers, Inc., headquartered in Huntingdon Valley, Pennsylvania,
designs, builds, markets and finances single-family detached and
attached homes in middle and high income residential communities located
mainly on land the company has developed in suburban residential areas.
The company also provides financing to customers.
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.
Equity Securities Selected for The Dow(sm) DART 5 Portfolio
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
Page 12
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
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.
Equity Securities Selected for The Dow(sm) DART 10 Portfolio
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.
Page 13
Equity Securities Selected for Total Target Portfolio
The Dow(sm) DART 5 Strategy Stocks.
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
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.
The S&P Target 10 Strategy Stocks.
Cardinal Health, Inc., headquartered in Dublin, Ohio, distributes a
broad line of pharmaceuticals, surgical and hospital supplies,
therapeutic plasma and other specialty pharmaceutical products, health
and beauty care products and other items typically sold by hospitals,
retail drug stores and other healthcare providers. The company also
makes, leases and sells point-of-use pharmacy systems; provides pharmacy
management services; and franchises apothecary-style pharmacies.
Dynegy Inc., headquartered in Houston, Texas, through subsidiaries,
markets natural gas, natural gas liquids, crude oil and electric power;
and gathers, processes and transports natural gas through ownership and
operation of natural gas processing plants, storage facilities and
pipelines in North America and the United Kingdom.
El Paso Energy Corporation, headquartered in Houston, Texas, operates in
the areas of interstate and intrastate transportation; the 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.
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's 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.
The St. Paul Companies, Inc., headquartered in St. Paul, Minnesota, with
subsidiaries, provides a broad range of commercial and consumer related
insurance products and services, including property liability insurance
underwriting and reinsurance. The company also provides risk advisory
services and investment banking asset management services.
Page 14
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.
Washington Mutual, Inc., headquartered in Seattle, Washington, through
subsidiaries, provides financial services to individuals and small to
mid-sized businesses, including accepting deposits from the general
public and making residential and other loans. The company's operations
are conducted through offices throughout the United States.
The Nasdaq Target 15 Strategy Stocks.
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.
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.
Bed Bath & Beyond Inc., headquartered in Union, New Jersey, sells
domestic merchandise (bed linens, bath accessories and kitchen textiles)
and home furnishings (cookware, dinnerware, glassware and basic
housewares) through retail stores.
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.
Check Point Software Technologies Ltd., headquartered in Ramat-Gan,
Israel, develops, sells and supports secure enterprise networking
solutions. The company's integrated architecture includes network
security ("FireWall-1," "VPN-1," "Open Security Manager" and "Provider-
1"), traffic control ("FloodGate-1" and "ConnectControl") and Internet
protocol address management ("Meta IP")
Cintas Corporation, headquartered in Cincinnati, Ohio, designs and
manufactures corporate identity uniforms which they rent or sell to
customers, along with non-uniform equipment. The company also offers
ancillary products which include the sale or rental of walk-off mats,
fender covers, towels, mops and linen products.
Comverse Technology, Inc., headquartered in Woodbury, New York, makes
and sells computer and telecommunications systems for multimedia
communications and information processing applications, which are used
by telephone network operators, government agencies, call centers,
financial institutions and other public and commercial organizations
worldwide.
Concord EFS, Inc., headquartered in Memphis, Tennessee, provides
electronic transaction authorization, processing, settlement and funds
transfer services on a nationwide basis.
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.
IDEC Pharmaceuticals Corporation, headquartered in San Diego,
California, develops products for the long-term management of immune
system cancers and autoimmune and inflammatory diseases. The company's
lead immune system, cancer and rheumatoid arthritis products are
genetically engineered to combat disease through the patient's immune
system.
Linear Technology Corporation, headquartered in Milpitas, California,
Page 15
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.
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.
PACCAR Inc., headquartered in Bellevue, Washington, makes light-, medium-
and heavy-duty trucks and related aftermarket parts; and provides
financing and leasing services to customers and dealers. In addition,
the company sells general automotive parts and accessories through
retail outlets.
Paychex, Inc., headquartered in Rochester, New York, provides payroll
processing, human resource and benefits outsourcing solutions for small-
to medium-sized businesses nationwide.
PeopleSoft, Inc., headquartered in Pleasanton, California, develops,
markets and supports public sector software products which are portable
and scaleable families of cross-industry client/server enterprise-wide
applications. The company's products are used in large and medium-sized
companies, higher education institutions and government agencies.
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 16
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 481, 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 481, 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 December 29, 2000.
FT 481
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 ) December 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 December 29, 2000 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-49558) and related Prospectus of FT 481.
ERNST & YOUNG LLP
Chicago, Illinois
December 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 481 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. 33-46955] 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
