Registration No. 333-53412
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 500
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 January 17, 2000 at 2:00 p.m. pursuant to Rule 487.
________________________________
COMMUNICATIONS SELECT PORTFOLIO, SERIES 8
ENERGY SELECT PORTFOLIO, SERIES 9
FINANCIAL SERVICES SELECT PORTFOLIO, SERIES 10
INTERNET SELECT PORTFOLIO, SERIES 12
LEADING BRANDS SELECT PORTFOLIO, SERIES 9
PHARMACEUTICAL SELECT PORTFOLIO, SERIES 11
TECHNOLOGY SELECT PORTFOLIO, SERIES 14
COMMUNICATIONS PORTFOLIO, SERIES 8
ENERGY PORTFOLIO, SERIES 9
FINANCIAL SERVICES PORTFOLIO, SERIES 10
INTERNET PORTFOLIO, SERIES 12
LEADING BRANDS PORTFOLIO, SERIES 9
PHARMACEUTICAL PORTFOLIO, SERIES 11
REIT GROWTH & INCOME PORTFOLIO, SERIES 4
TECHNOLOGY PORTFOLIO, SERIES 14
FT 500
FT 500 is a series of a unit investment trust, the FT Series. FT 500
consists of 15 separate portfolios listed above (each, a "Trust," and
collectively, the "Trusts"). Each Trust invests in a diversified
portfolio of common stocks ("Securities") issued by companies in the
industry sector or investment focus for which each Trust is named. The
objective of each Trust is to provide above-average capital
appreciation. Each Select Portfolio Series has an expected maturity of
approximately 18 months. Each Portfolio Series has an expected maturity
of approximately five and one-half years.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (R)
1-800-621-9533
The date of this prospectus is January 17, 2001
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 7
Report of Independent Auditors 8
Statements of Net Assets 9
Schedules of Investments 13
The FT Series 29
Portfolios 30
Risk Factors 35
Public Offering 38
Distribution of Units 40
The Sponsor's Profits 41
The Secondary Market 42
How We Purchase Units 42
Expenses and Charges 42
Tax Status 43
Retirement Plans 46
Rights of Unit Holders 46
Income and Capital Distributions 47
Redeeming Your Units 47
Removing Securities from a Trust 48
Amending or Terminating the Indenture 49
Information on the Sponsor, Trustee and Evaluator 50
Other Information 51
Page 2
Summary of Essential Information
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Financial
Communications Energy Services Internet
Select Portfolio Select Portfolio Select Portfolio Select Portfolio
Series 8 Series 9 Series 10 Series 12
__________ __________ _________ __________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,172 15,163 15,016 15,061
Fractional Undivided Interest
in the Trust per Unit (1) 1/15,172 1/15,163 1/15,016 1/15,061
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of 2.85% of the
Public Offering Price per Unit (2.879% of the
net amount invested, exclusive of the
deferred sales charge) (3) $ .285 $ .285 $ .285 $ .285
Less Deferred Sales Charge per Unit $ (.185) $ (.185) $ (.185) $ (.185)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.715 $ 9.715 $ 9.715 $ 9.715
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.715 $ 9.715 $ 9.715 $ 9.715
Cash CUSIP Number 30266A 459 30266A 533 30266A 616 30266A 699
Reinvestment CUSIP Number 30266A 467 30266A 541 30266A 624 30266A 707
Fee Accounts Cash CUSIP Number 30266A 475 30266A 558 30266A 632 30266A 715
Fee Accounts Reinvestment CUSIP Number 30266A 483 30266A 566 30266A 640 30266A 723
Security Code 60192 60209 60213 60217
Ticker Symbol TBA TBA TBA TBA
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 22, 2001
Mandatory Termination Date (6) July 17, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Leading
Brands Pharmaceutical Technology
Select Portfolio Select Portfolio Select Portfolio
Series 9 Series 11 Series 14
__________ __________ ________________
<S> <C> <C> <C>
Initial Number of Units (1) 15,025 15,048 15,110
Fractional Undivided Interest in the Trust per Unit (1) 1/15,025 1/15,048 1/15,110
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of 2.85% of the Public Offering
Price per Unit (2.879% of the net amount invested, exclusive of
the deferred sales charge) (3) $ .285 $ .285 $ .285
Less Deferred Sales Charge per Unit $ (.185) $ (.185) $ (.185)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.715 $ 9.715 $ 9.715
Redemption Price per Unit
(based on aggregate underlying value of Securities
less deferred sales charge) (5) $ 9.715 $ 9.715 $ 9.715
Cash CUSIP Number 30266A 772 30266A 855 30266B 143
Reinvestment CUSIP Number 30266A 780 30266A 863 30266B 150
Fee Accounts Cash CUSIP Number 30266A 798 30266A 871 30266B 168
Fee Accounts Reinvestment CUSIP Number 30266A 806 30266A 889 30266B 176
Security Code 60221 60225 60229
Ticker Symbol TBA TBA TBA
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 22, 2001
Mandatory Termination Date (6) July 17, 2002
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 4
Summary of Essential Information
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Financial
Communications Energy Services Internet
Portfolio Portfolio Portfolio Portfolio
Series 8 Series 9 Series 10 Series 12
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,172 15,163 15,016 15,061
Fractional Undivided Interest
in the Trust per Unit (1) 1/15,172 1/15,163 1/15,016 1/15,061
Public Offering Price:
Aggregate Offering Price Evaluation
of Securities per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of 4.40% of the Public
Offering Price per Unit (4.444% of the net amount
invested, exclusive of the deferred sales charge) (3) $ .440 $ .440 $ .440 $ .440
Less Deferred Sales Charge per Unit $ (.340) $ (.340) $ (.340) $ (.340)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Redemption Price per Unit
(based on aggregate underlying value
of Securities less deferred sales charge) (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Cash CUSIP Number 30266A 491 30266A 574 30266A 657 30266A 731
Reinvestment CUSIP Number 30266A 509 30266A 582 30266A 665 30266A 749
Fee Accounts Cash CUSIP Number 30266A 517 30266A 590 30266A 673 30266A 756
Fee Accounts Reinvestment CUSIP Number 30266A 525 30266A 608 30266A 681 30266A 764
Security Code 60235 60236 60240 60242
Ticker Symbol TBA TBA TBA TBA
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 22, 2001
Mandatory Termination Date (6) July 19, 2006
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001.
Income Distribution Date (7) Last day of each June and December, commencing June 30, 2001.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 6.
</FN>
</TABLE>
Page 5
Summary of Essential Information
FT 500
At the Opening of Business on the Initial Date of Deposit-January 17, 2001
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Leading Brands Pharmaceutical REIT Growth & Technology
Portfolio Portfolio Income Portfolio Portfolio
Series 9 Series 11 Series 4 Series 14
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,025 15,048 14,990 15,110
Fractional Undivided Interest in the Trust per Unit (1) 1/15,025 1/15,048 1/14,990 1/15,110
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per
Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Transactional Sales Charge of 4.40% of the Public
Offering Price per Unit (4.444% of the net amount
invested, exclusive of the deferred sales charge) (3) $ .440 $ .440 $ .440 $ .440
Less Deferred Sales Charge per Unit $ (.340) $ (.340) $ (.340) $ (.340)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred sales charge) (5) $ 9.560 $ 9.560 $ 9.560 $ 9.560
Cash CUSIP Number 30266A 814 30266B 101 30266B 226 30266B 184
Reinvestment CUSIP Number 30266A 822 30266B 119 30266B 234 30266B 192
Fee Accounts Cash CUSIP Number 30266A 830 30266B 127 30266B 242 30266B 200
Fee Accounts Reinvestment CUSIP Number 30266A 848 30266B 135 30266B 259 30266B 218
Security Code 60244 60248 60233 60252
Ticker Symbol TBA TBA TBA TBA
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date January 22, 2001
Mandatory Termination Date (6) July 19, 2006
Income Distribution Record Date Fifteenth day of each June and December, commencing June 15, 2001 for all portfolios
except REIT Growth & Income Portfolio, Series 4 and the fifteenth day of each month
for REIT Growth & Income Portfolio, Series 4, commencing February 15, 2001.
Income Distribution Date (7) (8) Last day of each June and December, commencing June 30, 2001 for all portfolios
except REIT Growth & Income Portfolio, Series 4 and the last day of each month for
REIT Growth & Income Portfolio, Series 4, commencing February 28, 2001.
______________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum 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) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$1.00 per 100 Units. In any case, we will distribute any funds in the
Capital Account in December of each year.
(8) For REIT Growth & Income Portfolio, Series 4, the estimated net
annual distribution per Unit is estimated to be $.7312 for the first
year. The estimated net annual distribution per Unit for subsequent
years, $.7106, is expected to be less than the amount for the first year
because a portion of the Securities included in REIT Growth & Income
Portfolio, Series 4 will be sold during the first year to pay for
organization costs and the deferred sales charge.
</FN>
</TABLE>
Page 6
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of a Trust. See "Public
Offering" and "Expenses and Charges." Although each Select Portfolio
Series has a term of approximately 18 months, each Portfolio Series has
a term of approximately five and one-half years, and each is a unit
investment trust rather than a mutual fund, this information allows you
to compare fees.
<TABLE>
<CAPTION>
Select
Portfolio Series Portfolio Series
_______________________ __________________
Amount Amount
per Unit per Unit
_____ _____
<S> <C> <C> <C> <C>
Unit Holder 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 1.85%(b) $.185 3.40%(b) $.340
Creation and development fee cap over the life of the Trust 0.50%(c) $.050 0.55%(c) $.055
_______ _______ _______ _____
(the annual creation and development fee is .35% of average
daily net assets for the Select Portfolio Series and Portfolio Series,
and is only charged while a Unit holder remains invested)
Maximum Sales Charges (including creation and development fee cap
over the life of the Trust) (c) 3.35% $.335 4.95% $.495
======= ======= ======= =====
Organization Costs (as a percentage of public offering price)
Estimated organization costs .260%(d) $.0260 .225%(d) $.0225
======= ======= ======= ======
Estimated Annual Trust Operating Expenses(e)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .080% $.0080 .100% $.0098
Trustee's fee and other operating expenses .119%(f) $.0118 .153%(f)(g) $.0150
_______ _______ _______ ______
Total(g) .199% $.0198 .253% $.0248
======= ======= ======= ======
</TABLE>
Example
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 18 Months(h) 3 Years 5 Years 5-1/2 Years
______ ____________ _______ _______ ___________
<S> <C> <C> <C> <C> <C>
Select Portfolio Series $366 $391 $ - $ - $ -
Portfolio Series (except REIT Growth & Income Portfolio, Series 4) 523 N.A. 594 651 666
REIT Growth & Income Portfolio, Series 4 523 N.A. 595 652 668
The example will not differ if you hold rather than sell your Units at
the end of each period.
_____________
<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 (2.85% for each Select Portfolio Series and
4.40% for each Portfolio Series) and any remaining deferred sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.185
per Unit for each Select Portfolio Series and $.340 per Unit for each
Portfolio Series which, as a percentage of the Public Offering Price,
will vary over time. The deferred sales charge will be deducted in five
monthly installments commencing August 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 .35% for each Trust. 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 the 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 will be greater than .35%.
However, in no event will we collect over the life of a Trust more than
.50% for each Select Portfolio Series or more than .55% for each
Portfolio Series of your initial investment.
(d) Estimated organization costs will be deducted from the assets of a
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(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) For each Portfolio Series, other operating expenses include the
costs incurred by each Portfolio Series for annually updating such
Trust's registration statements. Historically, we paid these costs.
Other operating expenses, however, do not include brokerage costs and
other portfolio transaction fees for any of the Trusts. In certain
circumstances the Trusts may incur additional expenses not set forth
above. See "Expenses and Charges."
(g) Due to its monthly distributions of income, the Trustee's fee and other
operating expenses for REIT Growth & Income Portfolio, Series 4 are
estimated to be .155%, or $.0152 per Unit. This increases total estimated
annual operating expenses for this Trust to .255%, or $.0250 per Unit.
(h) For each Select Portfolio Series, the example represents the
estimated costs incurred through each Trust's approximate 18-month
life.
</FN>
</TABLE>
Page 7
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 500
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 500, comprised of the Communications
Select Portfolio, Series 8; Energy Select Portfolio, Series 9; Financial
Services Select Portfolio, Series 10; Internet Select Portfolio, Series
12; Leading Brands Select Portfolio, Series 9; Pharmaceutical Select
Portfolio, Series 11; Technology Select Portfolio, Series 14;
Communications Portfolio, Series 8; Energy Portfolio, Series 9;
Financial Services Portfolio, Series 10; Internet Portfolio, Series 12;
Leading Brands Portfolio, Series 9; Pharmaceutical Portfolio, Series 11;
REIT Growth & Income Portfolio, Series 4 and Technology Portfolio,
Series 14, as of the opening of business on January 17, 2001. 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
January 17, 2001. 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 500,
comprised of the Communications Select Portfolio, Series 8; Energy
Select Portfolio, Series 9; Financial Services Select Portfolio, Series
10; Internet Select Portfolio, Series 12; Leading Brands Select
Portfolio, Series 9; Pharmaceutical Select Portfolio, Series 11;
Technology Select Portfolio, Series 14; Communications Portfolio, Series
8; Energy Portfolio, Series 9; Financial Services Portfolio, Series 10;
Internet Portfolio, Series 12; Leading Brands Portfolio, Series 9;
Pharmaceutical Portfolio, Series 11; REIT Growth & Income Portfolio,
Series 4 and Technology Portfolio, Series 14, at the opening of business
on January 17, 2001 in conformity with accounting principles generally
accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
January 17, 2001
Page 8
Statements of Net Assets
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Financial
Communications Energy Services Internet
Select Portfolio Select Portfolio Select Portfolio Select Portfolio
Series 8 Series 9 Series 10 Series 12
__________ ____________ __________ ________________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $150,202 $150,118 $148,663 $149,107
Less liability for reimbursement to Sponsor
for organization costs (3) (394) (394) (390) (392)
Less liability for deferred sales charge (4) (2,807) (2,805) (2,778) (2,786)
________ ________ ________ ________
Net assets $147,001 $146,919 $145,495 $145,929
======== ======== ======== ========
Units outstanding 15,172 15,163 15,016 15,061
ANALYSIS OF NET ASSETS
Cost to investors (5) $151,719 $151,635 $150,165 $150,613
Less maximum transactional sales charge (5) (4,324) (4,322) (4,280) (4,292)
Less estimated reimbursement to Sponsor
for organization costs (3) (394) (394) (390) (392)
________ ________ ________ ________
Net assets $147,001 $146,919 $145,495 $145,929
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 9
Statements of Net Assets
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Leading Brands Pharmaceutical Technology
Select Portfolio Select Portfolio Select Portfolio
Series 9 Series 11 Series 14
__________ ____________ _________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,748 $148,972 $149,590
Less liability for reimbursement to Sponsor
for organization costs (3) (391) (391) (393)
Less liability for deferred sales charge (4) (2,780) (2,784) (2,795)
________ ________ ________
Net assets $145,577 $145,797 $146,402
======== ======== ========
Units outstanding 15,025 15,048 15,110
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,250 $150,477 $151,101
Less maximum transactional sales charge (5) (4,282) (4,289) (4,306)
Less estimated reimbursement to Sponsor
for organization costs (3) (391) (391) (393)
________ ________ ________
Net assets $145,577 $145,797 $146,402
======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 10
Statements of Net Assets
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Financial
Communications Energy Services Internet
Portfolio Portfolio Portfolio Portfolio
Series 8 Series 9 Series 10 Series 12
__________ ___________ __________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $150,202 $150,118 $148,663 $149,107
Less liability for reimbursement to Sponsor
for organization costs (3) (341) (341) (338) (339)
Less liability for deferred sales charge (4) (5,158) (5,155) (5,105) (5,121)
________ ________ ________ ________
Net assets $144,703 $144,622 $143,220 $143,647
======== ======== ======== ========
Units outstanding 15,172 15,163 15,016 15,061
ANALYSIS OF NET ASSETS
Cost to investors (5) $151,720 $151,635 $150,165 $150,613
Less maximum transactional sales charge (5) (6,676) (6,672) (6,607) (6,627)
Less estimated reimbursement to Sponsor
for organization costs (3) (341) (341) (338) (339)
________ ________ ________ ________
Net assets $144,703 $144,622 $143,220 $143,647
======== ======== ======== ========
______________
<FN>
See "Notes to Statements of Net Assets" on page 12.
</FN>
</TABLE>
Page 11
Statements of Net Assets
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
REIT Growth
Leading Brands Pharmaceutical & Income Technology
Portfolio Portfolio Portfolio Portfolio
Series 9 Series 11 Series 4 Series 14
__________ ____________ __________ __________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,748 $148,972 $148,404 $149,590
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (339) (337) (340)
Less liability for deferred sales charge (4) (5,109) (5,116) (5,097) (5,137)
________ ________ ________ ________
Net assets $143,301 $143,517 $142,970 $144,113
======== ======== ======== ========
Units outstanding 15,025 15,048 14,990 15,110
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,250 $150,477 $149,903 $151,101
Less maximum transactional sales charge (5) (6,611) (6,621) (6,596) (6,648)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (339) (337) (340)
________ ________ ________ ________
Net assets $143,301 $143,517 $142,970 $144,113
======== ======== ======== ========
_____________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $3,000,000 will be allocated among each of the 15 Trusts in FT
500, has been deposited with the Trustee as collateral, covering the
monies necessary for the purchase of the Securities according to their
purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $.0260 per
Unit for each Select Portfolio Series and $.0225 per Unit for each
Portfolio Series. A payment will be made at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period to an account maintained by the Trustee from which the obligation
of the investors to the Sponsor will be satisfied. To the extent that
actual organization costs of a Trust are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions of $.185 per Unit for each Select Portfolio Series, or
$.340 per Unit for each Portfolio Series, payable to us in five equal
monthly installments beginning on August 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 December 20, 2001. If you redeem
your Units before December 20, 2001 you will have to pay the remaining
amount of the deferred sales charge applicable to such Units when you
redeem them.
(5) The aggregate cost to investors includes a maximum transactional
sales charge (comprised of an initial sales charge and a deferred sales
charge) computed at the rate of 2.85% of the Public Offering Price per
Unit for each Select Portfolio Series (equivalent to 2.879% of the net
amount invested, exclusive of the deferred sales charge) or 4.40% of the
Public Offering Price per Unit for each Portfolio Series (equivalent to
4.444% of the net amount invested, exclusive of the deferred sales
charge), assuming no reduction of the transactional sales charge as set
forth under "Public Offering."
</FN>
</TABLE>
Page 12
Schedule of Investments
Communications Select Portfolio, Series 8
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Communications Services (Domestic)
______________________________
137 BLS BellSouth Corporation 4% $ 44.063 $ 6,037
127 Q Qwest Communications International Inc. 4% 47.000 5,969
120 SBC SBC Communications Inc. 4% 50.063 6,007
110 VZ Verizon Communications, Inc. 4% 54.375 5,981
278 WCOM WorldCom, Inc. 4% 21.313 5,925
Communications Services (Foreign)
______________________________
173 DT Deutsche Telekom AG (ADR) 4% 34.563 5,979
49 TI Telecom Italia SpA (ADR) 4% 121.625 5,960
107 TEF Telefonica S.A. (ADR) 4% 55.688 5,959
122 TMX Telefonos de Mexico SA de CV (ADR) 4% 48.875 5,963
Communications Equipment
________________________
349 ADCT ADC Telecommunications, Inc. 4% 17.188 5,999
188 NT Nortel Networks Corporation (3) 4% 31.938 6,004
107 TLAB Tellabs, Inc. 4% 55.813 5,972
Fiber Optics
___________
99 GLW Corning Incorporated 4% 59.938 5,934
124 JDSU JDS Uniphase Corporation 4% 48.125 5,967
142 SCMR Sycamore Networks, Inc. 4% 42.000 5,964
Networking Products
___________________
158 CSCO Cisco Systems, Inc. 4% 38.500 6,083
47 JNPR Juniper Networks, Inc. 4% 128.000 6,016
Wireless Communications
___________________
55 CMVT Comverse Technology, Inc. 4% 106.813 5,875
511 ERICY L.M. Ericsson AB (ADR) 4% 11.688 5,973
278 MOT Motorola, Inc. 4% 21.250 5,907
72 NTDMY NTT DoCoMo, Inc. (ADR) 4% 94.130 6,777
150 NOK Nokia Oy (ADR) 4% 39.438 5,916
85 QCOM QUALCOMM Incorporated 4% 70.938 6,030
205 PCS Sprint Corp. (PCS Group) 4% 29.313 6,009
180 VOD Vodafone Group Plc (ADR) 4% 33.313 5,996
______ _________
Total Investments 100% $150,202
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 13
Schedule of Investments
Energy Select Portfolio, Series 9
FT 500
At the Opening of Business on the Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Natural Gas
__________
76 APA Apache Corporation 3.30% $ 65.125 $ 4,950
119 DYN Dynegy Inc. 3.34% 42.125 5,013
78 EPG El Paso Energy Corporation 3.33% 64.125 5,002
72 ENE Enron Corp. 3.28% 68.438 4,928
135 WMB The Williams Companies, Inc. 3.25% 36.125 4,877
Oil & Gas-Drilling
__________________
144 ESV ENSCO International Incorporated 3.37% 35.125 5,058
179 GLM Global Marine Inc. 3.40% 28.500 5,101
83 NBR Nabors Industries, Inc. 3.35% 60.540 5,025
118 NE Noble Drilling Corporation 3.40% 43.250 5,103
162 SDC Santa Fe International Corporation 3.35% 31.063 5,032
Oil & Gas-Exploration & Production
__________________________________
79 APC Anadarko Petroleum Corporation 3.33% 63.220 4,994
93 BRR Barrett Resources Corporation 3.18% 51.313 4,772
95 BR Burlington Resources Inc. 3.35% 53.000 5,035
104 EOG EOG Resources, Inc. 3.32% 47.938 4,986
248 VPI Vintage Petroleum, Inc. 3.29% 19.938 4,945
Oil-Field Services
__________________
69 BJS BJ Services Company 3.38% 73.438 5,067
118 BHI Baker Hughes Incorporated 3.40% 43.250 5,103
125 HAL Halliburton Company 3.38% 40.563 5,070
62 SLB Schlumberger Limited 3.33% 80.563 4,995
111 TDW Tidewater Inc. 3.40% 46.000 5,106
105 WFT Weatherford International, Inc. 3.30% 47.250 4,961
Oil-Integrated
______________
62 CHV Chevron Corporation 3.35% 81.000 5,022
180 COC/A Conoco Inc. (Class A) 3.39% 28.250 5,085
76 E ENI SpA (ADR) 3.28% 64.813 4,926
61 XOM Exxon Mobil Corporation 3.32% 81.813 4,991
83 RD Royal Dutch Petroleum Company (3) 3.32% 60.125 4,990
69 TOT Total Fina Elf SA (ADR) 3.34% 72.750 5,020
178 MRO USX-Marathon Group 3.32% 28.000 4,984
Oil-Refining & Marketing
________________________
151 TOS Tosco Corporation 3.29% 32.688 4,936
143 VLO Valero Energy Corporation 3.36% 35.250 5,041
______ ________
Total Investments 100% $150,118
====== =======
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 14
Schedule of Investments
Financial Services Select Portfolio, Series 10
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Banks & Thrifts
______________
99 BAC Bank of America Corporation 3.39% $ 50.938 $ 5,043
85 CMA Comerica Incorporated 3.33% 58.313 4,957
221 FSR Firstar Corporation 3.41% 22.938 5,069
119 FBF Fleet Boston Financial Corporation 3.35% 41.875 4,983
92 JPM J.P. Morgan Chase & Co. 3.29% 53.188 4,893
111 WM Washington Mutual, Inc. 3.34% 44.688 4,960
Financial Services
___________________
102 AXP American Express Company 3.31% 48.313 4,928
76 COF Capital One Financial Corporation 3.31% 64.688 4,916
92 C Citigroup Inc. 3.38% 54.688 5,031
131 CEFT Concord EFS, Inc. 3.33% 37.813 4,954
63 FNM Fannie Mae 3.32% 78.250 4,930
78 FRE Freddie Mac 3.33% 63.438 4,948
90 HI Household International, Inc. 3.34% 55.188 4,967
64 ING ING Groep N.V. (ADR) 3.33% 77.250 4,944
127 KRB MBNA Corporation 3.34% 39.063 4,961
86 PVN Providian Financial Corporation 3.34% 57.750 4,967
Insurance
_________
79 AFL AFLAC Incorporated 3.31% 62.250 4,918
136 ALL The Allstate Corporation 3.33% 36.438 4,956
59 AIG American International Group, Inc. 3.37% 84.813 5,004
43 CI CIGNA Corporation 3.33% 115.250 4,956
151 JHF John Hancock Financial Services, Inc. 3.33% 32.813 4,955
121 NFS Nationwide Financial Services, Inc. (Class A) 3.27% 40.188 4,863
Investment Services
___________________
85 BSC The Bear Stearns Companies Inc. 3.32% 58.063 4,935
165 EV Eaton Vance Corp. 3.31% 29.813 4,919
45 GS The Goldman Sachs Group, Inc. 3.33% 110.000 4,950
64 LEH Lehman Brothers Holdings Inc. 3.33% 77.313 4,948
67 MER Merrill Lynch & Co., Inc. 3.32% 73.625 4,933
59 MWD Morgan Stanley Dean Witter & Co. 3.33% 83.938 4,952
176 SCH The Charles Schwab Corporation 3.32% 28.000 4,928
116 SV Stilwell Financial, Inc. 3.36% 43.063 4,995
______ ________
Total Investments 100% $148,663
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 15
Schedule of Investments
Internet Select Portfolio, Series 12
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Access/Information Providers
_____________________
106 AOL AOL Time Warner Inc. 3.32% $ 46.700 $ 4,950
336 CNET CNET Networks, Inc. 3.28% 14.563 4,893
106 Q Qwest Communications International Inc. 3.34% 47.000 4,982
86 TMPW TMP Worldwide Inc. 3.41% 59.188 5,090
233 WCOM WorldCom, Inc. 3.33% 21.313 4,966
182 YHOO Yahoo! Inc. 3.34% 27.375 4,982
Communications Equipment
_____________________
102 JDSU JDS Uniphase Corporation 3.29% 48.125 4,909
156 NT Nortel Networks Corporation (3) 3.34% 31.938 4,982
89 TLAB Tellabs, Inc. 3.33% 55.813 4,967
Computers & Peripherals
___________________
53 BRCD Brocade Communications Systems, Inc. 3.28% 92.375 4,896
234 DELL Dell Computer Corporation 3.38% 21.500 5,031
70 EMC EMC Corporation 3.28% 69.875 4,891
163 HWP Hewlett-Packard Company 3.32% 30.375 4,951
160 SUNW Sun Microsystems, Inc. 3.37% 31.375 5,020
Internet Software & Services
___________________
139 ARBA Ariba, Inc. 3.39% 36.313 5,048
80 BEAS BEA Systems, Inc. 3.39% 63.125 5,050
297 BVSN BroadVision, Inc. 3.35% 16.813 4,993
42 CHKP Check Point Software Technologies Ltd. (3) 3.40% 120.563 5,064
228 EXDS Exodus Communications, Inc. 3.32% 21.688 4,945
311 INKT Inktomi Corporation 3.33% 15.984 4,971
95 MSFT Microsoft Corporation 3.35% 52.563 4,994
113 OPWV Openwave Systems, Inc. 3.33% 43.938 4,965
156 ORCL Oracle Corporation 3.33% 31.813 4,963
62 VRSN VeriSign, Inc. 3.26% 78.313 4,855
Networking Products
___________________
131 CSCO Cisco Systems, Inc. 3.38% 38.500 5,044
39 JNPR Juniper Networks, Inc. 3.35% 128.000 4,992
119 SCMR Sycamore Networks, Inc. 3.35% 42.000 4,998
Semiconductors
_____________
41 BRCM Broadcom Corporation (Class A) 3.24% 117.875 4,833
157 INTC Intel Corporation 3.30% 31.375 4,926
62 PMCS PMC-Sierra, Inc. (3) 3.32% 79.938 4,956
______ ________
Total Investments 100% $149,107
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 16
Schedule of Investments
Leading Brands Select Portfolio, Series 9
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Apparel/Retail
_____________
203 GPS The Gap, Inc. 4% $ 29.375 $ 5,963
159 JNY Jones Apparel Group, Inc. 4% 37.688 5,992
Beverages
_____________
141 BUD Anheuser-Busch Companies, Inc. 4% 42.313 5,966
105 KO The Coca-Cola Company 4% 57.000 5,985
129 PEP PepsiCo, Inc. 4% 45.938 5,926
Consumer Electronics
________________
150 PHG Koninklijke (Royal) Philips Electronics N.V. (3) 4% 39.563 5,934
Food
_____
251 CAG ConAgra Foods, Inc. 4% 23.750 5,961
136 HNZ H.J. Heinz Company 4% 43.563 5,925
101 HSY Hershey Foods Corporation 4% 58.875 5,946
66 WWY Wm. Wrigley Jr. Company 4% 89.813 5,928
Household Products
__________________
179 CLX The Clorox Company 4% 33.063 5,918
104 CL Colgate-Palmolive Company 4% 57.900 6,022
89 KMB Kimberly-Clark Corporation 4% 66.220 5,894
83 PG Procter & Gamble Company 4% 71.938 5,971
Leisure/Entertainment
________________
128 AOL AOL Time Warner Inc. 4% 46.700 5,978
181 DIS The Walt Disney Company 4% 33.063 5,984
157 HDI Harley-Davidson, Inc. 4% 37.750 5,927
Pharmaceuticals
_____________
87 BMY Bristol-Myers Squibb Company 4% 67.938 5,911
63 JNJ Johnson & Johnson 4% 94.188 5,934
142 PFE Pfizer Inc. 4% 41.688 5,920
111 SGP Schering-Plough Corporation 4% 53.563 5,945
Restaurants
__________
176 MCD McDonald's Corporation 4% 34.125 6,006
132 SBUX Starbucks Corporation 4% 44.813 5,915
Toiletries/Cosmetics
_______________
140 AVP Avon Products, Inc. 4% 42.563 5,959
174 G The Gillette Company 4% 34.125 5,938
______ ________
Total Investments 100% $148,748
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 17
Schedule of Investments
Pharmaceutical Select Portfolio, Series 11
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
165 ABT Abbott Laboratories 5% $45.000 $ 7,425
131 AHP American Home Products Corporation 5% 56.150 7,356
120 AMGN Amgen Inc. 5% 61.563 7,388
121 ADRX Andrx Group 5% 60.250 7,290
155 AZN AstraZeneca Group Plc (ADR) 5% 47.938 7,430
135 BGEN Biogen, Inc. 5% 57.250 7,729
109 BMY Bristol-Myers Squibb Company 5% 67.938 7,405
211 CORR COR Therapeutics, Inc. 5% 34.875 7,359
156 ELN Elan Corporation Plc (ADR) 5% 47.750 7,449
109 DNA Genentech, Inc. 5% 67.188 7,323
88 GENZ Genzyme Corporation (General Division) 5% 85.438 7,518
139 GSK GlaxoSmithKline Plc (ADR) 5% 53.375 7,419
79 JNJ Johnson & Johnson 5% 94.188 7,441
171 KG King Pharmaceuticals, Inc. 5% 43.438 7,428
89 LLY Eli Lilly and Company 5% 83.250 7,409
160 MEDI MedImmune, Inc. 5% 49.688 7,950
89 MRK Merck & Co., Inc. 5% 83.313 7,415
180 NVS Novartis AG (ADR) 5% 41.188 7,414
177 PFE Pfizer Inc. 5% 41.688 7,379
139 SGP Schering-Plough Corporation 5% 53.563 7,445
______ ________
Total Investments 100% $148,972
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 18
Schedule of Investments
Technology Select Portfolio, Series 14
FT 500
At the Opening of Business on the Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Communications Equipment
_____________________
292 ADCT ADC Telecommunications, Inc. 3.36% $ 17.188 $ 5,019
83 GLW Corning Incorporated 3.33% 59.938 4,975
103 JDSU JDS Uniphase Corporation 3.31% 48.125 4,957
126 NOK Nokia Oy (ADR) 3.32% 39.438 4,969
157 NT Nortel Networks Corporation (3) 3.35% 31.938 5,014
71 QCOM QUALCOMM Incorporated 3.37% 70.938 5,037
89 TLAB Tellabs, Inc. 3.32% 55.813 4,967
Computers & Peripherals
_____________________
53 BRCD Brocade Communications Systems, Inc. 3.27% 92.375 4,896
234 DELL Dell Computer Corporation 3.36% 21.500 5,031
70 EMC EMC Corporation 3.27% 69.875 4,891
163 HWP Hewlett-Packard Company 3.31% 30.375 4,951
132 SLR Solectron Corporation 3.33% 37.790 4,988
160 SUNW Sun Microsystems, Inc. 3.36% 31.375 5,020
Computer Software & Services
________________________
184 BMCS BMC Software, Inc. 3.29% 26.750 4,922
42 CHKP Check Point Software Technologies Ltd. (3) 3.38% 120.563 5,064
104 ITWO i2 Technologies, Inc. 3.35% 48.172 5,010
95 MSFT Microsoft Corporation 3.34% 52.563 4,993
157 ORCL Oracle Corporation 3.34% 31.813 4,995
73 SEBL Siebel Systems, Inc. 3.34% 68.438 4,996
55 VRTS VERITAS Software Corporation 3.32% 90.375 4,971
Networking Products
_______________
131 CSCO Cisco Systems, Inc. 3.37% 38.500 5,044
39 JNPR Juniper Networks, Inc. 3.34% 128.000 4,992
Semiconductor Equipment
____________________
113 AMAT Applied Materials, Inc. 3.36% 44.438 5,022
131 NVLS Novellus Systems, Inc. 3.39% 38.750 5,076
Semiconductors
_____________
166 ALTR Altera Corporation 3.32% 29.875 4,959
158 INTC Intel Corporation 3.31% 31.375 4,957
94 LLTC Linear Technology Corporation 3.33% 52.938 4,976
62 PMCS PMC-Sierra, Inc. (3) 3.31% 79.938 4,956
118 STM STMicroelectronics N.V. (3) 3.30% 41.813 4,934
92 VTSS Vitesse Semiconductor Corporation 3.35% 54.438 5,008
______ ________
Total Investments 100% $149,590
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 19
Schedule of Investments
Communications Portfolio, Series 8
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Communications Services (Domestic)
______________________________
137 BLS BellSouth Corporation 4% $ 44.063 $ 6,037
127 Q Qwest Communications International Inc. 4% 47.000 5,969
120 SBC SBC Communications Inc. 4% 50.063 6,007
110 VZ Verizon Communications, Inc. 4% 54.375 5,981
278 WCOM WorldCom, Inc. 4% 21.313 5,925
Communications Services (Foreign)
______________________________
173 DT Deutsche Telekom AG (ADR) 4% 34.563 5,979
49 TI Telecom Italia SpA (ADR) 4% 121.625 5,960
107 TEF Telefonica S.A. (ADR) 4% 55.688 5,959
122 TMX Telefonos de Mexico SA de CV (ADR) 4% 48.875 5,963
Communications Equipment
________________________
349 ADCT ADC Telecommunications, Inc. 4% 17.188 5,999
188 NT Nortel Networks Corporation (3) 4% 31.938 6,004
107 TLAB Tellabs, Inc. 4% 55.813 5,972
Fiber Optics
___________
99 GLW Corning Incorporated 4% 59.938 5,934
124 JDSU JDS Uniphase Corporation 4% 48.125 5,967
142 SCMR Sycamore Networks, Inc. 4% 42.000 5,964
Networking Products
___________________
158 CSCO Cisco Systems, Inc. 4% 38.500 6,083
47 JNPR Juniper Networks, Inc. 4% 128.000 6,016
Wireless Communications
___________________
55 CMVT Comverse Technology, Inc. 4% 106.813 5,875
511 ERICY L.M. Ericsson AB (ADR) 4% 11.688 5,973
278 MOT Motorola, Inc. 4% 21.250 5,907
72 NTDMY NTT DoCoMo, Inc. (ADR) 4% 94.130 6,777
150 NOK Nokia Oy (ADR) 4% 39.438 5,916
85 QCOM QUALCOMM Incorporated 4% 70.938 6,030
205 PCS Sprint Corp. (PCS Group) 4% 29.313 6,009
180 VOD Vodafone Group Plc (ADR) 4% 33.313 5,996
______ _________
Total Investments 100% $150,202
====== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 20
Schedule of Investments
Energy Portfolio, Series 9
FT 500
At the Opening of Business on the Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Natural Gas
__________
76 APA Apache Corporation 3.30% $ 65.125 $ 4,950
119 DYN Dynegy Inc. 3.34% 42.125 5,013
78 EPG El Paso Energy Corporation 3.33% 64.125 5,002
72 ENE Enron Corp. 3.28% 68.438 4,928
135 WMB The Williams Companies, Inc. 3.25% 36.125 4,877
Oil & Gas-Drilling
______________
144 ESV ENSCO International Incorporated 3.37% 35.125 5,058
179 GLM Global Marine Inc. 3.40% 28.500 5,101
83 NBR Nabors Industries, Inc. 3.35% 60.540 5,025
118 NE Noble Drilling Corporation 3.40% 43.250 5,103
162 SDC Santa Fe International Corporation 3.35% 31.063 5,032
Oil & Gas-Exploration & Production
_____________________________
79 APC Anadarko Petroleum Corporation 3.33% 63.220 4,994
93 BRR Barrett Resources Corporation 3.18% 51.313 4,772
95 BR Burlington Resources Inc. 3.35% 53.000 5,035
104 EOG EOG Resources, Inc. 3.32% 47.938 4,986
248 VPI Vintage Petroleum, Inc. 3.29% 19.938 4,945
Oil-Field Services
_______________
69 BJS BJ Services Company 3.38% 73.438 5,067
118 BHI Baker Hughes Incorporated 3.40% 43.250 5,103
125 HAL Halliburton Company 3.38% 40.563 5,070
62 SLB Schlumberger Limited 3.33% 80.563 4,995
111 TDW Tidewater Inc. 3.40% 46.000 5,106
105 WFT Weatherford International, Inc. 3.30% 47.250 4,961
Oil-Integrated
____________
62 CHV Chevron Corporation 3.35% 81.000 5,022
180 COC/A Conoco Inc. (Class A) 3.39% 28.250 5,085
76 E ENI SpA (ADR) 3.28% 64.813 4,926
61 XOM Exxon Mobil Corporation 3.32% 81.813 4,991
83 RD Royal Dutch Petroleum Company (3) 3.32% 60.125 4,990
69 TOT Total Fina Elf SA (ADR) 3.34% 72.750 5,020
178 MRO USX-Marathon Group 3.32% 28.000 4,984
Oil-Refining & Marketing
____________________
151 TOS Tosco Corporation 3.29% 32.688 4,936
143 VLO Valero Energy Corporation 3.36% 35.250 5,041
______ _______
Total Investments 100% $150,118
====== =======
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 21
Schedule of Investments
Financial Services Portfolio, Series 10
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Banks & Thrifts
______________
99 BAC Bank of America Corporation 3.39% $ 50.938 $ 5,043
85 CMA Comerica Incorporated 3.33% 58.313 4,957
221 FSR Firstar Corporation 3.41% 22.938 5,069
119 FBF Fleet Boston Financial Corporation 3.35% 41.875 4,983
92 JPM J.P. Morgan Chase & Co. 3.29% 53.188 4,893
111 WM Washington Mutual, Inc. 3.34% 44.688 4,960
Financial Services
______________
102 AXP American Express Company 3.31% 48.313 4,928
76 COF Capital One Financial Corporation 3.31% 64.688 4,916
92 C Citigroup Inc. 3.38% 54.688 5,031
131 CEFT Concord EFS, Inc. 3.33% 37.813 4,954
63 FNM Fannie Mae 3.32% 78.250 4,930
78 FRE Freddie Mac 3.33% 63.438 4,948
90 HI Household International, Inc. 3.34% 55.188 4,967
64 ING ING Groep N.V. (ADR) 3.33% 77.250 4,944
127 KRB MBNA Corporation 3.34% 39.063 4,961
86 PVN Providian Financial Corporation 3.34% 57.750 4,967
Insurance
_________
79 AFL AFLAC Incorporated 3.31% 62.250 4,918
136 ALL The Allstate Corporation 3.33% 36.438 4,956
59 AIG American International Group, Inc. 3.37% 84.813 5,004
43 CI CIGNA Corporation 3.33% 115.250 4,956
151 JHF John Hancock Financial Services, Inc. 3.33% 32.813 4,955
121 NFS Nationwide Financial Services, Inc. (Class A) 3.27% 40.188 4,863
Investment Services
_______________
85 BSC The Bear Stearns Companies Inc. 3.32% 58.063 4,935
165 EV Eaton Vance Corp. 3.31% 29.813 4,919
45 GS The Goldman Sachs Group, Inc. 3.33% 110.000 4,950
64 LEH Lehman Brothers Holdings Inc. 3.33% 77.313 4,948
67 MER Merrill Lynch & Co., Inc. 3.32% 73.625 4,933
59 MWD Morgan Stanley Dean Witter & Co. 3.33% 83.938 4,952
176 SCH The Charles Schwab Corporation 3.32% 28.000 4,928
116 SV Stilwell Financial, Inc. 3.36% 43.063 4,995
______ ________
Total Investments 100% $148,663
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 22
Schedule of Investments
Internet Portfolio, Series 12
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Access/Information Providers
_____________________
106 AOL AOL Time Warner Inc. 3.32% $ 46.700 $ 4,950
336 CNET CNET Networks, Inc. 3.28% 14.563 4,893
106 Q Qwest Communications International Inc. 3.34% 47.000 4,982
86 TMPW TMP Worldwide Inc. 3.41% 59.188 5,090
233 WCOM WorldCom, Inc. 3.33% 21.313 4,966
182 YHOO Yahoo! Inc. 3.34% 27.375 4,982
Communications Equipment
_____________________
102 JDSU JDS Uniphase Corporation 3.29% 48.125 4,909
156 NT Nortel Networks Corporation (3) 3.34% 31.938 4,982
89 TLAB Tellabs, Inc. 3.33% 55.813 4,967
Computers & Peripherals
___________________
53 BRCD Brocade Communications Systems, Inc. 3.28% 92.375 4,896
234 DELL Dell Computer Corporation 3.38% 21.500 5,031
70 EMC EMC Corporation 3.28% 69.875 4,891
163 HWP Hewlett-Packard Company 3.32% 30.375 4,951
160 SUNW Sun Microsystems, Inc. 3.37% 31.375 5,020
Internet Software & Services
___________________
139 ARBA Ariba, Inc. 3.39% 36.313 5,048
80 BEAS BEA Systems, Inc. 3.39% 63.125 5,050
297 BVSN BroadVision, Inc. 3.35% 16.813 4,993
42 CHKP Check Point Software Technologies Ltd. (3) 3.40% 120.563 5,064
228 EXDS Exodus Communications, Inc. 3.32% 21.688 4,945
311 INKT Inktomi Corporation 3.33% 15.984 4,971
95 MSFT Microsoft Corporation 3.35% 52.563 4,994
113 OPWV Openwave Systems, Inc. 3.33% 43.938 4,965
156 ORCL Oracle Corporation 3.33% 31.813 4,963
62 VRSN VeriSign, Inc. 3.26% 78.313 4,855
Networking Products
___________________
131 CSCO Cisco Systems, Inc. 3.38% 38.500 5,044
39 JNPR Juniper Networks, Inc. 3.35% 128.000 4,992
119 SCMR Sycamore Networks, Inc. 3.35% 42.000 4,998
Semiconductors
_____________
41 BRCM Broadcom Corporation (Class A) 3.24% 117.875 4,833
157 INTC Intel Corporation 3.30% 31.375 4,926
62 PMCS PMC-Sierra, Inc. (3) 3.32% 79.938 4,956
______ ________
Total Investments 100% $149,107
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 23
Schedule of Investments
Leading Brands Portfolio, Series 9
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Apparel/Retail
_____________
203 GPS The Gap, Inc. 4% $ 29.375 $ 5,963
159 JNY Jones Apparel Group, Inc. 4% 37.688 5,992
Beverages
_____________
141 BUD Anheuser-Busch Companies, Inc. 4% 42.313 5,966
105 KO The Coca-Cola Company 4% 57.000 5,985
129 PEP PepsiCo, Inc. 4% 45.938 5,926
Consumer Electronics
________________
150 PHG Koninklijke (Royal) Philips Electronics N.V. (3) 4% 39.563 5,934
Food
_____
251 CAG ConAgra Foods, Inc. 4% 23.750 5,961
136 HNZ H.J. Heinz Company 4% 43.563 5,925
101 HSY Hershey Foods Corporation 4% 58.875 5,946
66 WWY Wm. Wrigley Jr. Company 4% 89.813 5,928
Household Products
________________
179 CLX The Clorox Company 4% 33.063 5,918
104 CL Colgate-Palmolive Company 4% 57.900 6,022
89 KMB Kimberly-Clark Corporation 4% 66.220 5,894
83 PG Procter & Gamble Company 4% 71.938 5,971
Leisure/Entertainment
________________
128 AOL AOL Time Warner Inc. 4% 46.700 5,978
181 DIS The Walt Disney Company 4% 33.063 5,984
157 HDI Harley-Davidson, Inc. 4% 37.750 5,927
Pharmaceuticals
_____________
87 BMY Bristol-Myers Squibb Company 4% 67.938 5,911
63 JNJ Johnson & Johnson 4% 94.188 5,934
142 PFE Pfizer Inc. 4% 41.688 5,920
111 SGP Schering-Plough Corporation 4% 53.563 5,945
Restaurants
__________
176 MCD McDonald's Corporation 4% 34.125 6,006
132 SBUX Starbucks Corporation 4% 44.813 5,915
Toiletries/Cosmetics
_______________
140 AVP Avon Products, Inc. 4% 42.563 5,959
174 G The Gillette Company 4% 34.125 5,938
______ ________
Total Investments 100% $148,748
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 24
Schedule of Investments
Pharmaceutical Portfolio, Series 11
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
165 ABT Abbott Laboratories 5% $45.000 $ 7,425
131 AHP American Home Products Corporation 5% 56.150 7,356
120 AMGN Amgen Inc. 5% 61.563 7,388
121 ADRX Andrx Group 5% 60.250 7,290
155 AZN AstraZeneca Group Plc (ADR) 5% 47.938 7,430
135 BGEN Biogen, Inc. 5% 57.250 7,729
109 BMY Bristol-Myers Squibb Company 5% 67.938 7,405
211 CORR COR Therapeutics, Inc. 5% 34.875 7,359
156 ELN Elan Corporation Plc (ADR) 5% 47.750 7,449
109 DNA Genentech, Inc. 5% 67.188 7,323
88 GENZ Genzyme Corporation (General Division) 5% 85.438 7,518
139 GSK GlaxoSmithKline Plc (ADR) 5% 53.375 7,419
79 JNJ Johnson & Johnson 5% 94.188 7,441
171 KG King Pharmaceuticals, Inc. 5% 43.438 7,428
89 LLY Eli Lilly and Company 5% 83.250 7,409
160 MEDI MedImmune, Inc. 5% 49.688 7,950
89 MRK Merck & Co., Inc. 5% 83.313 7,415
180 NVS Novartis AG (ADR) 5% 41.188 7,414
177 PFE Pfizer Inc. 5% 41.688 7,379
139 SGP Schering-Plough Corporation 5% 53.563 7,445
______ ________
Total Investments 100% $148,972
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 25
Schedule of Investments
REIT Growth & Income Portfolio, Series 4
FT 500
At the Opening of Business on the
Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
126 AIV Apartment Investment & Management Company 4% $46.750 $ 5,891
126 AVB Avalonbay Communities, Inc. 4% 46.563 5,867
308 BED Bedford Property Investors, Inc. 4% 19.188 5,910
298 BDN Brandywine Realty Trust 4% 19.875 5,923
221 CBL CBL & Associates Properties, Inc. 4% 26.813 5,926
181 CPT Camden Property Trust 4% 32.500 5,882
410 CARS Capital Automotive REIT 4% 14.563 5,971
444 DDR Developers Diversified Realty Corporation 4% 13.375 5,938
241 DRE Duke-Weeks Realty Corporation 4% 24.750 5,965
263 EGP EastGroup Properties, Inc. 4% 23.000 6,049
194 EOP Equity Office Properties Trust 4% 30.688 5,953
115 EQR Equity Residential Properties Trust 4% 51.688 5,944
176 FR First Industrial Realty Trust, Inc. 4% 33.688 5,929
157 GGP General Growth Properties, Inc. 4% 37.813 5,937
324 GLB Glenborough Realty Trust Incorporated 4% 18.188 5,893
270 HR Healthcare Realty Trust, Inc. 4% 22.063 5,957
241 HPT Hospitality Properties Trust 4% 24.625 5,935
446 HMT Host Marriott Corporation 4% 13.250 5,909
138 KIM Kimco Realty Corporation 4% 43.250 5,968
217 LRY Liberty Property Trust 4% 27.438 5,954
315 MLS The Mills Corporation 4% 19.063 6,005
270 PNP Pan Pacific Retail Properties, Inc. 4% 21.938 5,923
272 PLD ProLogis Trust 4% 22.000 5,984
237 RA Reckson Associates Realty Corporation 4% 24.750 5,866
259 SMT Summit Properties Inc. 4% 22.875 5,925
______ ________
Total Investments 100% $148,404
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
</FN>
</TABLE>
Page 26
Schedule of Investments
Technology Portfolio, Series 14
FT 500
At the Opening of Business on the Initial Date of Deposit-January 17, 2001
<TABLE>
<CAPTION>
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value per Securities to
of Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
_________ _____________________________________ _________ ______ _____________
<S> <C> <C> <C> <C>
Communications Equipment
_____________________
292 ADCT ADC Telecommunications, Inc. 3.36% $ 17.188 $ 5,019
83 GLW Corning Incorporated 3.33% 59.938 4,975
103 JDSU JDS Uniphase Corporation 3.31% 48.125 4,957
126 NOK Nokia Oy (ADR) 3.32% 39.438 4,969
157 NT Nortel Networks Corporation (3) 3.35% 31.938 5,014
71 QCOM QUALCOMM Incorporated 3.37% 70.938 5,037
89 TLAB Tellabs, Inc. 3.32% 55.813 4,967
Computers & Peripherals
_____________________
53 BRCD Brocade Communications Systems, Inc. 3.27% 92.375 4,896
234 DELL Dell Computer Corporation 3.36% 21.500 5,031
70 EMC EMC Corporation 3.27% 69.875 4,891
163 HWP Hewlett-Packard Company 3.31% 30.375 4,951
132 SLR Solectron Corporation 3.33% 37.790 4,988
160 SUNW Sun Microsystems, Inc. 3.36% 31.375 5,020
Computer Software & Services
________________________
184 BMCS BMC Software, Inc. 3.29% 26.750 4,922
42 CHKP Check Point Software Technologies Ltd. (3) 3.38% 120.563 5,064
104 ITWO i2 Technologies, Inc. 3.35% 48.172 5,010
95 MSFT Microsoft Corporation 3.34% 52.563 4,993
157 ORCL Oracle Corporation 3.34% 31.813 4,995
73 SEBL Siebel Systems, Inc. 3.34% 68.438 4,996
55 VRTS VERITAS Software Corporation 3.32% 90.375 4,971
Networking Products
_______________
131 CSCO Cisco Systems, Inc. 3.37% 38.500 5,044
39 JNPR Juniper Networks, Inc. 3.34% 128.000 4,992
Semiconductor Equipment
____________________
113 AMAT Applied Materials, Inc. 3.36% 44.438 5,022
131 NVLS Novellus Systems, Inc. 3.39% 38.750 5,076
Semiconductors
_____________
166 ALTR Altera Corporation 3.32% 29.875 4,959
158 INTC Intel Corporation 3.31% 31.375 4,957
94 LLTC Linear Technology Corporation 3.33% 52.938 4,976
62 PMCS PMC-Sierra, Inc. (3) 3.31% 79.938 4,956
118 STM STMicroelectronics N.V. (3) 3.30% 41.813 4,934
92 VTSS Vitesse Semiconductor Corporation 3.35% 54.438 5,008
______ ________
Total Investments 100% $149,590
====== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 28.
Page 27
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 January 16, 2001. Each Select Portfolio Series has a
Mandatory Termination Date of July 17, 2002. Each Portfolio Series has a
Mandatory Termination Date of July 19, 2006.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of ours. The cost of the Securities to us and our profit or
loss (which is the difference between the cost of the Securities to us
and the cost of the Securities to a Trust) are set forth below:
Cost of
Securities Profit
to Sponsor (Loss)
_________ ______
Communications Select Portfolio, Series 8 $149,509 $ 693
Energy Select Portfolio, Series 9 150,396 (278)
Financial Services Select Portfolio, Series 10 148,485 178
Internet Select Portfolio, Series 12 148,755 352
Leading Brands Select Portfolio, Series 9 148,765 (17)
Pharmaceutical Select Portfolio, Series 11 149,133 (161)
Technology Select Portfolio, Series 14 149,246 344
Communications Portfolio, Series 8 149,509 693
Energy Portfolio, Series 9 150,396 (278)
Financial Services Portfolio, Series 10 148,485 178
Internet Portfolio, Series 12 148,755 352
Leading Brands Portfolio, Series 9 148,765 (17)
Pharmaceutical Portfolio, Series 11 149,133 (161)
REIT Growth & Income Portfolio, Series 4 148,898 (494)
Technology Portfolio, Series 14 149,246 344
(3) This Security represents the common stock of a foreign company which
trades directly on a U.S. national securities exchange.
</FN>
</TABLE>
Page 28
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
500, consists of 15 separate portfolios set forth below:
- Communications Select Portfolio, Series 8
- Energy Select Portfolio, Series 9
- Financial Services Select Portfolio, Series 10
- Internet Select Portfolio, Series 12
- Leading Brands Select Portfolio, Series 9
- Pharmaceutical Select Portfolio, Series 11
- Technology Select Portfolio, Series 14
- Communications Portfolio, Series 8
- Energy Portfolio, Series 9
- Financial Services Portfolio, Series 10
- Internet Portfolio, Series 12
- Leading Brands Portfolio, Series 9
- Pharmaceutical Portfolio, Series 11
- REIT Growth & Income Portfolio, Series 4
- Technology Portfolio, Series 14
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited portfolios of common stocks
with the Trustee and in turn, the Trustee delivered documents to us
representing our ownership of the Trusts in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trusts, or cash (including a letter of credit) with instructions
to buy more Securities, to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"
for each Trust), and not the percentage relationship existing on the day
we are creating new Units, since the two may differ. This difference may
be due to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trusts, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in a
Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts pay the associated brokerage fees. To
reduce this dilution, the Trusts will try to buy the Securities as close
to the Evaluation Time and as close to the evaluation price as possible.
In addition, because the Trusts pay the brokerage fees associated with
the creation of new Units and with the sale of Securities to meet
redemption and exchange requests, frequent redemption and exchange
activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trusts to buy Securities. If we or an affiliate of ours act as agent to
the Trusts, we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
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 29
Portfolios
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the sector or
investment focus for which the Trust is named. A diversified portfolio
helps to offset the risks normally associated with such an investment,
although it does not eliminate them entirely. The companies selected for
the Trusts have been researched and evaluated using database screening
techniques, fundamental analysis, and the judgment of the Sponsor's
research analysts. Each Select Portfolio Series has an expected maturity
of approximately 18 months whereas each Portfolio Series has an expected
maturity of approximately five and one-half years.
Communications Select Portfolio, Series 8 and Communications Portfolio,
Series 8 each consist of a portfolio of common stocks of communications
companies, diversified across domestic and international companies
involved in communications services, communications equipment, fiber
optics, networking products and wireless communications.
The focus of the communications industry is constantly being reshaped.
It is due in large part to increasing competition, consolidation and
technology. Technology has been playing a particularly crucial role. So
much so that many communications companies are beginning to concentrate
on more high-tech and high-growth areas such as wireless communications,
the Internet and digital technology. With Internet usage continuing to
increase and the number of wireless subscribers worldwide nearly
tripling over the last three years, we believe the potential opportunity
for growth in these areas is becoming more evident.
Because of increasing competition, communications companies are
realizing that the quality of their offerings may ultimately determine
their level of success. Many companies have already turned to mergers
and acquisitions as a means of attaining new technologies in an effort
to reach more consumers. Others have forged strategic alliances with
companies outside the industry to broaden their exposure.
Regardless of the avenue they choose, the dream of converging services
is becoming reality. Consumers can now get multiple services such as
Internet access, wireless and traditional telephone service, and cable
from one company, on one bill.
Consider the following factors:
- The U.S. Telecommunications Act of 1996 and the 1997
Telecommunications Agreement, passed by the World Trade Organization,
have opened markets domestically and internationally to encourage
competition and capital investment.
- The growing popularity of the Internet is creating greater demand for
data traffic. Advanced technologies like high-speed digital systems
using fiber optic cables are one means being utilized to satisfy this
demand.
- According to market research company Forrester Research, revenues from
wireless operations have the potential to grow exponentially over the
next several years.
- Cahners In-Stat Group predicts that approximately 1.5 billion
handsets, personal digital assistants and Internet appliances could be
equipped with wireless capabilities by the end of 2004.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Communications Portfolios are considered Large-Cap Blend
Trusts.
Energy Select Portfolio, Series 9 and Energy Portfolio, Series 9 each
consist of a portfolio of common stocks of energy companies which the
Sponsor believes are positioned to take advantage of the world's
increasing demand for energy. The demand for energy, in all of its
forms, tends to be driven largely by economic prosperity and is,
therefore, cyclical in nature. The United States consumes approximately
25% of the world's supply of oil; however, we anticipate that emerging
countries, along with Asia, may experience the highest rate of growth in
demand in the not too distant future. According to Standard & Poor's,
emerging countries are expected to account for more than 50% of world
demand by the year 2015. In the 1990s, oil and natural gas stocks were
mostly out of favor, but the companies in the industry began
consolidating and cutting costs to position themselves to benefit from
upward cycles.
Page 30
The technologies that are presently being employed in the field of oil
and gas exploration are helping reduce the cost of extracting oil and
natural gas by saving detection time and allowing companies to capture a
higher percentage of tapped reserves.
3-D Seismic Imaging. This is a relatively new technology that utilizes
the vibration from sound waves to construct a three-dimensional,
computer generated, picture of a geological formation. This process has
the potential to greatly improve the odds of locating oil and gas.
Horizontal Drilling. New instrumentation can now be attached to a drill
bit to generate real time geological information, without impeding the
drilling process. It is estimated that horizontal drilling has the
potential to out-produce a vertical well by as much as sevenfold. This
technique has been especially cost-effective in offshore drilling.
By the year 2020, the Energy Information Administration projects that
the world will consume approximately three times as much energy as it
did 30 years ago.
Consider the following factors:
- Oil prices have a significant influence on capital spending. Oil
companies need a sustained upward trend in oil prices to justify risking
large amounts of investment capital on rigs and exploration. For this
reason, the oil industry tends to experience longer peaks and troughs
than most cyclical industries.
- Forrester Research estimates that online sales of gas and electricity
will exceed $250 billion in 2004, up from a modest $11 billion in 1999.
[Standard & Poor's Industry Surveys]
- Technological advances, including the Internet, continue to shape the
oil business, enhancing producers' ability to obtain greater quantities
of oil and gas, while political and regulatory issues surface in the
public arena.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Energy Portfolios are considered Large-Cap Value Trusts.
Financial Services Select Portfolio, Series 10 and Financial Services
Portfolio, Series 10 each consist of a portfolio of common stocks of
companies that provide a wide variety of financial services.
The financial services industry has undergone several significant
changes during its storied history. Perhaps none have been more
noteworthy than the recent overturn of the Glass-Steagall Act. Firms can
now create "financial supermarkets" that offer services including
traditional banking, insurance underwriting, securities underwriting,
investment brokerage and merchant banking.
We believe that there are a few major trends that should continue
pushing the financial industry. The first is an aging population. Nearly
three out of ten people in the United States are baby boomers. Scores of
them have already started, or soon will start, planning for their
retirement just as they are entering their peak earning years. Another
driving factor behind the industry is technological innovation. Improved
technology has enabled financial companies to increase their volume and
reduce transaction costs in order to attract consumers. E-commerce, once
viewed as a threat, is now being embraced by many in the industry.
Because most purchases made over the Internet are charged, companies
that offer credit card services are realizing that e-commerce represents
a significant source of potential revenue. Others have begun offering
products and services over the Internet simply to satisfy growing demand
or as an effective cross-selling tool.
For much of the industry, however, the greatest impact may come from
merger and acquisition ("M&A") activity. U.S. M&A activity continues to
remain strong, led by the telecommunications, radio and TV, and banking
industries. Now that the Glass-Steagall Act is no longer a barrier,
companies throughout the financial services industry can now use
consolidation as a way to compete more effectively and implement new
growth strategies just as other industries have done.
Consider the following factors:
- In 2000, trading volume on the New York Stock Exchange was up nearly
30% versus the previous year. [NYSE.com]
- The banking industry is generally healthy due to a strong economy,
relatively low interest rates and recent favorable regulatory changes.
- We believe that the recent proposal to eliminate the pooling method of
accounting will add further pressure for consolidation within the
industry.
- In the decade of the 1990s, assets under management grew from just
over $1.07 trillion to more than $6.84 trillion. Much of this growth can
be attributed to increased retirement savings and gains in the stock
market. [Standard & Poor's Industry Surveys]
Page 31
Based on the composition of the portfolios on the Initial Date of
Deposit, the Financial Services Portfolios are considered Large-Cap
Value Trusts.
Internet Select Portfolio, Series 12 and Internet Portfolio, Series 12
each consist of a portfolio of common stocks of technology companies
which provide products or services for, or conduct business on, the
Internet.
The number of individuals connecting to the Internet is growing daily. A
recent report by the Computer Industry Almanac projects that there could
potentially be over 600 million people around the world with Internet
access by the year 2002. The report also suggests that by the end of the
year 2002, there will be 23 countries where over 30 percent of the
population will be Internet users.
Although the potential scope of the Internet is impressive, its effects
may be even more dramatic. One of the Internet's most significant
effects is to cut the cost of interaction-the searching, coordinating,
and monitoring that people and companies must do when they exchange
goods, services or ideas. McKinsey & Company estimates that the costs
associated with these activities could drop by as much as 80 percent or
more if they are handled electronically. Pervading all economies, these
costs account for more than a third of economic activity in the United
States. Though still considered to be in its infancy, the Internet has
already had an impact on business, consumers and nearly every aspect of
today's society. Whether this rate of change will continue and where it
will take us may be determined, in our opinion, in large part by the
companies in these Trusts.
New technologies continue to be accepted faster than ever. While it took
35 years before one-quarter of U.S. households owned a telephone, the
Internet took only seven years to reach the same level of penetration.
[Red Herring]
Consider the following factors:
- More than 120 million people are online in the United States alone,
and the number of online users is expected to dramatically increase in
the future. [The Industry Standard]
- People are spending an average of 10 hours online per month, a 23%
jump over 1999. [The Industry Standard]
- Business-to-business online revenues are forecasted to grow
significantly over the next several years. [The Industry Standard]
- Improved security measures are helping fuel consumer transactions over
the Web. Global e-commerce spending for the fourth quarter of 2000 was
expected to jump 85.5%, to $19.5 billion, from $10.5 billion in the
fourth quarter of 1999. [The Industry Standard]
- Almost 100 million U.S. adults are now going online every month. That
is half of American adults and a 27% increase over 1999 in the number
who surf the Web. [The Industry Standard]
- There are approximately 2.7 billion pages on the Web, an 80% increase
from 1999. [The Industry Standard]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Internet Portfolios are considered Large-Cap Growth Trusts.
Leading Brands Select Portfolio, Series 9 and Leading Brands Portfolio,
Series 9 each consist of a portfolio of common stocks of companies in
the consumer products industry. Almost every American is familiar with
brand name companies. Many have become household names and their
products can be found in almost every home across the country. This is
also increasingly becoming the case overseas as more markets open in
developing countries. Typically, leading brands companies have large
advertising budgets and strong research and development enabling them to
further expand into new markets. Today's consumer environment is
becoming increasingly competitive, placing a stronger emphasis on
establishing a powerful global brand. In any given year, thousands of
new products in categories from toothpaste to bleach inundate the
marketplace. By marketing aggressively both domestically and
internationally, these blue-chip companies are able to establish a
widely recognized brand name in an effort to attain market dominance.
Considering that the United States and Canada together make up
approximately 5% of the world's population, it is evident that there are
abundant opportunities for consumer products overseas. Realizing this,
leading companies have been expanding into many untapped foreign markets
where the growth rates in per capita income and spending are generally
forecasted to outpace those of developed countries over the next decade.
The companies in the Leading Brands Portfolios have been chosen for
their financial strength and market dominance, competitive advantages,
skilled management and essential products and services.
Page 32
Consider the following factors:
- Relaxed trade agreements and improved political climates are opening
more markets for producers of leading brand name products.
- Generally, the products and services of consumer goods companies
remain in demand, even during uncertain economic times.
- A relatively healthy U.S. economy and the creation of the euro in
Europe, which has the potential to encourage companies to increase their
global branding efforts in that region, are both positive factors for
consumer goods companies, considering that these regions have been two
of the largest consumers of brand name products historically. [Standard
& Poor's Industry Surveys]
- Some 80% of the world's population is in developing countries, which
represents a potential growth opportunity. [Standard & Poor's Industry
Surveys]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Leading Brands Portfolios are considered Large-Cap Growth
Trusts.
Pharmaceutical Select Portfolio, Series 11 and Pharmaceutical Portfolio,
Series 11 each consist of a portfolio of common stocks of pharmaceutical
companies. According to Standard & Poor's, the pharmaceutical industry
was projected to generate over $360 billion in sales worldwide in 2000,
an increase of around 8% over 1999. The industry is highly competitive
and extremely capital intensive. Drugmakers spend billions of dollars on
researching and developing new products. In fact, according to the
Pharmaceutical Research and Manufacturers of America, the amount of
capital invested in R&D has nearly doubled every five years since 1970.
There are approximately 78 million baby boomers living in the United
States, some of whom will begin turning 65 after 2010. Currently, it is
estimated that 70% of Americans over the age of 65 suffer from
cardiovascular disease. We believe that as average life expectancies
increase, the number of people at risk for disease will increase.
The Food & Drug Administration. In 1997, the Food and Drug
Administration (FDA) relaxed its restrictions on pharmaceutical
companies advertising drugs directly to the public. The FDA, which now
has a faster review process in place, is creating a business environment
that could make it quicker and more economical for some drugmakers to
bring new products to market.
Demand Driven By Need. The bottom line is that the demand for
prescription and over-the-counter drugs is driven more by need than
price. We believe that an aging population coupled with longer life
expectancies should help support demand for drugs in the future.
Research-based pharmaceutical companies continue to invest record-
setting amounts in research and development. According to the
Pharmaceutical Research and Manufacturers of America, spending has grown
from approximately $2.5 billion in 1980 to a new record level of
approximately $26.4 billion in 2000.
Consider the following factors:
- The Pharmaceutical Research and Manufacturers of America reported that
the industry currently has over 1,000 new medicines in development to
treat hundreds of serious diseases.
- Pharmaceutical companies have initiated a number of cost-containment
measures such as using the Internet to reduce administrative costs, and
forging alliances with biotechnology companies.
- Drugmakers are promoting their products to the public through all of
the major media outlets. According to IMS Health, direct-to-consumer
advertising totaled $1.3 billion in the first half of 2000, an increase
of approximately 44% over the previous six months.
- Managed care providers, especially HMOs, encourage the use of
pharmaceuticals because they are regarded as a relatively inexpensive
form of treatment and are less invasive.
Based on the composition of the portfolios on the Initial Date of
Deposit, the Pharmaceutical Portfolios are considered Large-Cap Growth
Trusts.
REIT Growth & Income Portfolio, Series 4 consists of a portfolio of
common stocks of Real Estate Investment Trusts ("REITs"). A REIT is a
company that buys, develops, and manages income producing real estate
such as apartments, shopping centers, offices, and warehouses. In short,
a REIT is a corporation that pools the capital of many investors to
purchase all forms of real estate.
Page 33
The REIT Growth & Income Portfolio invests in a number of these REITs,
offering a simple and convenient way to achieve a diversified portfolio
with one purchase. The portfolio offers diversification among different
types of properties as well as regional diversification. This type of
diversification helps to reduce some of the fluctuations in the real
estate market as a result of economic downturns or changes in supply and
demand in a specific region or type of property. REITs allow investors
to participate in a growing real estate industry. The market
capitalization of REITs has grown from roughly $8.7 billion in 1990 to
approximately $124.3 billion in 1999 [National Association of Real
Estate Investment Trusts].
REITs offer investors several advantages over ownership of individual
properties. REITs are currently required to annually distribute a
majority of their income as dividends to shareholders, making them a
great source of steady income without forcing investors to manage the
properties themselves. Investors can enjoy the benefits of capital
appreciation if properties are sold at a profit. Another advantage is
liquidity. Compared to traditional privately held real estate, which may
be difficult to sell, REITs are traded on major stock exchanges making
them highly liquid. REIT investors also gain the advantage of skilled
management since REIT management teams tend to be experts within their
specific property or geographic niches.
Consider the following factors:
- The REIT Modernization Act allows REITs to own taxable REIT
subsidiaries. This act will enable REITs to grow non-rental income
through various initiatives such as offering their tenants telephone or
energy services.
- The REIT Modernization Act will reduce the income distribution
requirement from 95% to 90%, allowing REIT management teams more
flexibility with available cash, including the ability to initiate stock
repurchase programs.
- REIT property fundamentals are currently strong due to stable rental
income and consistent occupancy rates.
- We believe fears of oversupply from new real estate developments have
diminished.
- Because the correlation of REIT returns with the returns of other
market sectors is relatively low, we feel REITs provide an added
diversification benefit to your overall portfolio.
Technology Select Portfolio, Series 14 and Technology Portfolio, Series
14 each consist of a portfolio of common stocks of technology companies
involved in the manufacturing, sales or servicing of computers and
peripherals, computer software and services, networking products,
communications equipment, semiconductor equipment and semiconductors.
If you are looking to invest in cutting-edge technology, you may not
need to look any further than the Internet. It is now estimated that
over 300 million people are connected to the Web worldwide. The
technology that makes it all possible is developed by computer,
software, networking and communications companies. Now that the
infrastructure is in place, we believe the focus of technology is
shifting to e-commerce.
E-commerce can be divided into two main categories: business-to-consumer
and business-to-business. Business-to-business online revenues were
roughly $213 billion in 2000, while business-to-consumer revenues were
estimated to be as much as $45 billion.
Software Solutions. E-commerce and business-to-business commerce are
creating demand and opportunity for software products in many areas
including supply-chain management (SCM) and database software. These
software systems can navigate massive amounts of data to help streamline
manufacturing and distribution, monitor inventories, and perform
transaction management.
Higher Productivity. Technology has played an integral part in the
economic prosperity enjoyed by the United States during the 1990s. It
has helped increase productivity and curb inflation. We believe that the
Internet should continue to fuel technological innovation for years to
come as businesses of all sizes go online to increase distributions and
boost efficiency.
Data Networking. The value of information lies in its application.
Computer networks connect computers and peripheral equipment so that
information can be shared. As e-commerce evolves, the need for
businesses to network with suppliers and customers should create strong
demand for those companies that provide equipment and data networking
services.
Page 34
The Impact of E-Commerce Improved Productivity.
We expect the expanding use of e-commerce to result in significant cost
savings in transactions.
Tighter Inventory. Using the Internet to improve forecasting and
replenishment of products, companies should be able to reduce inventory
costs as suppliers are linked by just-in-time inventory systems.
Better Customer Service. E-commerce should dramatically reduce the
amount of time it takes to process orders. In addition, customer service
costs should be reduced through the use of a Web customer service
interface to decrease errors.
Consider the following factors:
- Half of all U.S. households own a computer. Lower-income households
are buying personal computers at a faster rate than any other segment,
in part, because of the introduction of models that retail below $1,000.
[The Industry Standard]
- More than 120 million people are online in the United States alone,
and the number of online users is expected to dramatically increase in
the future. [The Industry Standard]
- Investment in technology is growing. The worldwide IT market was
valued at $360 billion in 1993. By 2002, IBM expects the overall IT
market to grow to approximately $1.6 trillion. [PricewaterhouseCoopers
LLP]
- More than half of the traffic now carried over telecommunications
networks is data. [The Industry Standard]
- Semiconductor sales rose 31% from 1999 to a record $221.1 billion in
2000. [Infobeads]
Based on the composition of the portfolios on the Initial Date of
Deposit, the Technology Portfolios are considered Large-Cap Growth Trusts.
The style and capitalization characteristics used to describe each Trust
are designed to help you better understand how a Trust fits into your
overall investment plan. These characteristics are determined as of the
Initial Date of Deposit and due to changes in the value of the
Securities, may vary thereafter. In general, growth portfolios include
stocks with high relative price-to-book ratios while value portfolios
include stocks with low relative price-to-book ratios. At least 65% of
the stocks in a Trust on the Initial Date of Deposit must fall into
either the growth or value category to receive the designation. Trusts
that do not meet this criteria are designated as blend Trusts. Both the
weighted average market capitalization of a Trust and at least half of
the Securities in the Trust must fall into the following ranges to
determine its market capitalization designation: Small-Cap-less than $2
billion; Mid-Cap-$2 billion to $10 billion; Large-Cap-over $10 billion.
A Trust, however, may contain individual stocks that do not fall into
its stated market capitalization designation.
You should be aware that predictions stated herein for the above
industries or sectors may not be realized. In addition, the Securities
contained in each Trust are not intended to be representative of the
selected industry or sector as a whole and the performance of each Trust
is expected to differ from that of its comparative industry or sector.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S. and, for
certain Trusts, foreign companies. The value of a Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors'
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur. In addition, common stock prices may
be particularly sensitive to rising interest rates, as the cost of
capital rises and borrowing costs increase.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
especially the relatively short 18-month life of each Select Portfolio
Series, or that you won't lose money. Units of the Trusts are not
deposits of any bank and are not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
Page 35
Certain of the Securities in certain of the Trusts may be issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies as a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Communications Industry. Because more than 25% of the Communications
Portfolios are invested in communications companies, these Trusts are
considered to be concentrated in the communications industry. A
portfolio concentrated in a single industry may present more risks than
a portfolio which is broadly diversified over several industries. The
market for high technology communications products and services is
characterized by rapidly changing technology, rapid product obsolescence
or loss of patent protection, cyclical market patterns, evolving
industry standards and frequent new product introductions. Certain
communications/bandwidth companies are subject to substantial
governmental regulation, which among other things, regulates permitted
rates of return and the kinds of services that a company may offer. The
communications industry has experienced substantial deregulation in
recent years. Deregulation may lead to fierce competition for market
share and can have a negative impact on certain companies. Competitive
pressures are intense and communications stocks can experience rapid
volatility.
Consumer Products Industry. The Leading Brands Portfolios are considered
to be concentrated in the consumer products industry. General risks of
these companies include cyclicality of revenues and earnings, economic
recession, currency fluctuations, changing consumer tastes, extensive
competition, product liability litigation and increased governmental
regulation. Generally, spending on consumer products is affected by the
economic health of consumers. A weak economy and its effect on consumer
spending would adversely affect consumer products companies.
Energy Industry. The Energy Portfolios are considered to be concentrated
in companies that explore for, produce, refine, distribute or sell
petroleum or gas products, or provide parts or services to petroleum or
gas companies. 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.
Financial Services Industry. The Financial Services Portfolios are
considered to be concentrated in the financial services industry which
includes banks and thrifts, financial services and insurance companies,
and investment firms. Banks, thrifts and their holding companies are
especially subject to the adverse effects of economic recession;
volatile interest rates; portfolio concentrations in geographic markets
and in commercial and residential real estate loans; and competition
from new entrants in their fields of business. Although recently-enacted
legislation repealed most of the barriers which separated the banking,
insurance and securities industries, these industries are still
extensively regulated at both the federal and state level and may be
adversely affected by increased regulations.
Banks and thrifts face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial-
services overhaul legislation, permit new entrants to offer various
financial products. Technological advances such as the Internet allow
these nontraditional lending sources to cut overhead and permit the more
efficient use of customer data.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Page 36
Companies involved in the insurance industry are engaged in
underwriting, selling, distributing or placing of property and casualty,
life or health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes
and other disasters. Life and health insurance profits may be affected
by mortality rates. Already extensively regulated, insurance companies'
profits may also be adversely affected by increased government
regulations or tax law changes.
Pharmaceutical Industries. The Pharmaceutical Portfolios are considered
to be concentrated in the biotechnology and pharmaceutical industries.
Biotechnology and pharmaceutical companies are subject to changing
government regulation, including price controls, national health
insurance, managed care regulation and tax incentives or penalties
related to medical insurance premiums, which could have a negative
effect on the price and availability of their products and services. In
addition, such companies face increasing competition from generic drug
sales, the termination of their patent protection for certain drugs and
technological advances which render their products or services obsolete.
The research and development costs required to bring a drug to market
are substantial and may include a lengthy review by the government, with
no guarantee that the product will ever go to market or show a profit.
In addition, the potential for an increased amount of required
disclosure of proprietary scientific information could negatively impact
the competitive position of these companies. Many of these companies may
not offer certain drugs or products for several years, and as a result,
may have significant losses of revenue and earnings.
Real Estate Investment Trusts. The REIT Growth & Income Portfolio is
considered to be concentrated in Real Estate Investment Trusts
("REITs"). REITs are financial vehicles that pool investors' capital to
purchase or finance real estate. REITs may concentrate their investments
in specific geographic areas or in specific property types, i.e.,
hotels, shopping malls, residential complexes and office buildings. The
value of the REITs and the ability of the REITs to distribute income may
be adversely affected by several factors, including rising interest
rates, changes in the national, state and local economic climate and
real estate conditions, perceptions of prospective tenants of the
safety, convenience and attractiveness of the properties, the ability of
the owner to provide adequate management, maintenance and insurance, the
cost of complying with the Americans with Disabilities Act, increased
competition from new properties, the impact of present or future
environmental legislation and compliance with environmental laws,
changes in real estate taxes and other operating expenses, adverse
changes in governmental rules and fiscal policies, adverse changes in
zoning laws, and other factors beyond the control of the issuers of the
REITs.
Technology Industry. The Internet Portfolios and the Technology
Portfolios are considered to be concentrated in the technology industry.
Technology companies are generally subject to the risks of rapidly
changing technologies; short product life cycles; fierce competition;
aggressive pricing and reduced profit margins; the loss of patent,
copyright and trademark protections; cyclical market patterns; evolving
industry standards and frequent new product introductions. Technology
companies may be smaller and less experienced companies, with limited
product lines, markets or financial resources and fewer experienced
management or marketing personnel. Technology company stocks, especially
those which are Internet-related, have experienced extreme price and
volume fluctuations that are often unrelated to their operating
performance. Also, the stocks of many Internet companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
such as that concerning Microsoft Corporation, or of the industries
represented by such issuers may negatively impact the share prices of
these Securities. We cannot predict what impact any pending or proposed
legislation or pending or threatened litigation will have on the share
prices of the Securities.
Foreign Stocks. Certain of the Securities in certain of the Trusts are
issued by foreign companies, which makes the Trusts subject to more
risks than if they invested solely in domestic common stocks. These
Securities are either directly listed on a U.S. securities exchange or
are in the form of American Depositary Receipts ("ADRs") which are
listed on a U.S. securities exchange. Risks of foreign common stocks
Page 37
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The 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 earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trusts). During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
a Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of a Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth for a Trust in "Notes to Statements of Net Assets," this will
result in a greater effective cost per Unit to Unit holders for the
reimbursement to the Sponsor. To the extent actual organization costs
are less than the estimated amount, only the actual organization costs
will be deducted from the assets of a Trust. When Securities are sold to
reimburse the Sponsor for organization costs, the Trustee will sell
Securities, to the extent practicable, which will maintain the same
proportionate relationship among the Securities contained in a Trust as
existed prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
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 (2.85% of the Public Offering Price for each
Page 38
Select Portfolio Series and 4.40% of the Public Offering Price for each
Portfolio Series) and the maximum remaining deferred sales charge
(initially equal to $.185 per Unit for each Select Portfolio Series and
$.340 per Unit for each Portfolio Series). This initial sales charge is
initially equal to approximately 1.00% of the Public Offering Price of a
Unit, but will vary from 1.00% depending on the purchase price of your
Units and as deferred sales charge payments are made. When the Public
Offering Price exceeds $10.00 per Unit, the initial sales charge will
exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, five monthly deferred sales
charge payments of $.037 per Unit for each Select Portfolio Series or
$.068 per Unit for each Portfolio Series will be deducted from a Trust's
assets on approximately the 20th day of each month from August 20, 2001
through December 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 1.85% of the Public Offering Price for each Select Portfolio Series
or more than 3.40% of the Public Offering Price for each Portfolio Series.
If you purchase Units after the last deferred sales charge payment has
been assessed, your transactional sales charge will consist of a one-
time initial sales charge of 2.85% of the Public Offering Price per Unit
(equivalent to 2.934% of the net amount invested) for each Select
Portfolio Series and 4.40% of the Public Offering Price per Unit
(equivalent to 4.603% of the net amount invested) for each Portfolio
Series. For each Portfolio Series, the transactional sales charge will
be reduced by 1/2 of 1% on each subsequent January 31, commencing
January 31, 2002, to a minimum transactional sales charge of 3.00%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum transactional sales charge is
reduced as described below:
For each Select Portfolio Series:
Your maximum
transactional
If you invest sales charge
(in thousands):* will be:
_________________ _____________
$50 but less than $100 2.60%
$100 but less than $150 2.35%
$150 but less than $500 2.00%
$500 but less than $1 million 1.85%
$1 million or more 1.35%
For each Portfolio Series:
Your maximum
transactional
If you invest sales charge
(in thousands):* will be:
_________________ _____________
$50 but less than $100 4.15%
$100 but less than $250 3.90%
$250 but less than $500 3.40%
$500 but less than $1 million 2.40%
$1 million or more 1.50%
* 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
charge 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. Broker/dealers will
receive a concession of 1.00% of the Public Offering Price on Portfolio
Series' Units sold subject to the transactional sales charge reduction
for purchases of $1 million or more. In all other instances, any reduced
transactional sales charge is the responsibility of the party making the
sale.
You may use redemption or termination proceeds from any unit investment
trust we sponsor to purchase Units of the Trusts during the initial
offering period at the Public Offering Price less 1.00%. Please note
that any deferred sales charge remaining on units you redeem to buy
Units of the Trusts will be deducted from those redemption proceeds.
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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.
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
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.
As Sponsor, we will also receive a creation and development fee. See
"Expenses and Charges" for a description of the services provided for
this fee.
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.
For each Select Portfolio Series, dealers and other selling agents can
purchase Units at prices which reflect a concession or agency commission
of 2.50% of the Public Offering Price per Unit. However, for Units
subject to a transactional sales charge which are purchased using
redemption or termination proceeds, this amount will be reduced to 1.50%
of the sales price of these Units.
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For each Portfolio Series, dealers and other selling agents can purchase
Units at prices which reflect a concession or agency commission of 3.30%
of the Public Offering Price per Unit (or 65% of the maximum
transactional sales charge after January 31, 2002). However, for Units
subject to a transactional sales charge which are purchased using
redemption or termination proceeds, this amount will be reduced to 2.30%
of the sales price of these Units. Dealers and other selling agents will
receive an additional volume concession or agency commission on all
Portfolio Series Units they sell equal to .30% of the Public Offering
Price if they purchase at least $100,000 worth of Units of the Trusts on
the Initial Date of Deposit or $250,000 on any day thereafter or if they
were eligible to receive a similar concession in connection with sales
of similarly structured trusts sponsored by us which are currently in
the initial offering period.
Dealers and other selling agents who sell Units of a Trust during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales per Trust Additional
(in millions): Concession:
_________________ ___________
$1 but less than $10 .10%
$10 or more .20%
Dealers and other selling agents can combine Units of a Select Portfolio
Series and its related Portfolio Series they sell for purposes of
reaching the additional concessions levels set forth in the above table.
In addition, dealers and other selling agents will not receive a
concession on the sale of Units which are not subject to a transactional
sales charge, but such Units will be included in determining whether the
above volume sales levels are met. For all Trusts, dealers and other
selling agents who, during any consecutive 12-month period, sell at
least $1.75 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
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 the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance. We may also, from time to time, use advertising which
classifies Trusts according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum
transactional sales charge per Unit of a 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
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period, dealers and others may also realize profits or sustain losses as
a result of fluctuations in the Public Offering Price they receive when
they sell the Units.
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and in the case of each Portfolio Series, costs incurred in
annually updating each Portfolio Series' registration statements. We may
discontinue purchases of Units at any time. IF YOU WISH TO DISPOSE OF
YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES BEFORE
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell or redeem
your Units before you have paid the total deferred sales charge on your
Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are listed under "Fee
Table." If actual expenses of a Trust exceed the estimate, that Trust
will bear the excess. The Trustee will pay operating expenses of a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee may earn interest on
these funds, thus benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. For each Portfolio Series, legal, typesetting,
electronic filing and regulatory filing fees and expenses associated
with updating those Trusts' registration statements yearly are also now
chargeable to such Trusts. Historically, we paid these fees and
expenses. There are no such fees and expenses that will be charged to
each Select Portfolio Series. First Trust Advisors L.P., an affiliate of
ours, acts as both Portfolio Supervisor and Evaluator to the Trusts and
will receive the fees set forth under "Fee Table" for providing
portfolio supervisory and evaluation services to the Trusts. In
providing portfolio supervisory services, the Portfolio Supervisor may
purchase research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
As Sponsor, we will receive a fee from each Trust for creating and
developing the Trusts, including determining each Trust's objectives,
policies, composition and size, selecting service providers and
information services and for providing other similar administrative and
ministerial functions. The "creation and development fee" is accrued
(and becomes a liability of each Trust) on a daily basis. The dollar
amount of the creation and development fee accrued each day, which will
vary with fluctuations in a Trust's net asset value, is determined by
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multiplying the net asset value of the Trust on that day by 1/365 of the
annual creation and development fee of .35%. The total amount of any
accrued but unpaid creation and development fee is paid to the Sponsor
on a monthly basis from the assets of your Trust. If you redeem your
Units, you will only be responsible for any accrued and unpaid creation
and development fee through the date of redemption. In connection with
the creation and development fee, in no event will the Sponsor collect
more than .50% for each Select Portfolio Series and .55% for each
Portfolio Series of a Unit holder's initial investment. We do not use
this fee to pay distribution expenses or as compensation for sales
efforts.
In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Account, the Trustee has the power
to sell Securities in a Trust to make cash available to pay these
charges which may result in capital gains or losses to you. See "Tax
Status."
Each Portfolio Series will be audited annually. So long as we are making
a secondary market for Units, we will bear the cost of these annual
audits to the extent the costs exceed $0.0050 per Unit. Otherwise, each
Portfolio Series will pay for the audit. You can request a copy of the
audited financial statements from the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
GRANTOR TRUSTS.
The following applies only to Communications Select Portfolio, Series 8;
Energy Select Portfolio, Series 9; Financial Services Select Portfolio,
Series 10; Internet Select Portfolio, Series 12; Leading Brands Select
Portfolio, Series 9; Pharmaceutical Select Portfolio, Series 11;
Technology Select Portfolio, Series 14; Communications Portfolio, Series
8; Energy Portfolio, Series 9; Financial Services Portfolio, Series 10;
Internet Portfolio, Series 12; Leading Brands Portfolio, Series 9;
Pharmaceutical Portfolio, Series 11 and Technology Portfolio, Series 14.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay 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
Page 43
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 each
Select Portfolio Series has a maturity of approximately 18 months, the
reduction in the capital gains rate for property held for more than five
years could only possibly apply to your interest in those 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. Capital
gain or loss is long-term if the holding period for the asset is more
than one year and is short-term if the holding period for the asset is
one year or less. You must exclude the date you purchase your Units to
determine the holding period of your Units. The tax rates for capital
gains realized from assets held for one year or less are generally the
same as for ordinary income. The tax code may, however, treat certain
capital gains as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") when you redeem your Units
(except for Fee Accounts) or at a Trust's termination. If you request an
In-Kind Distribution you will be responsible for any expenses related to
this distribution. By electing to receive an In-Kind Distribution, you
will receive whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trusts as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
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.
REGULATED INVESTMENT COMPANY.
The following applies only to REIT Growth & Income Portfolio, Series 4.
Trust Status.
The Trust intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended. If the Trust does in fact
qualify as a regulated investment company and distributes its income as
required by tax law, the Trust generally will not be subject to federal
income taxes or excise taxes on income earned from the Securities. You,
however, will be subject to federal income taxes on dividends you
receive from the Trust.
Page 44
Ordinary Income Distributions.
Distributions of the Trust's income, unless designated as capital gain
dividends, will generally be taxable to you as ordinary income. To the
extent distributions in any year exceed the Trust's current and
accumulated earnings and profits, they will be treated as a return of
capital and will reduce your basis and be treated as a gain from the sale
of Units to the extent they exceed your basis. Distributions from the
Trust are not eligible for the 70% dividends received deduction for
corporations. Under certain circumstances, distributions made to you in
January must be treated for federal income tax purposes as having been
received by you on December 31 of the previous year.
Capital Gains Dividends, Your Tax Basis and Income or Loss upon
Disposition.
Distributions of net capital gain from the Trust which are designated by
the Trust as capital gain dividends will generally be taxable to you as
long-term capital gain, regardless of how long you have owned your
Units. However, if you receive a capital gain dividend and sell your
Units prior to holding them for six months, the loss will be
recharacterized as long-term capital loss to the extent of the long-term
capital gain received as a dividend.
In addition, the Trust may designate some capital gain dividends as
"unrecaptured Section 1250 gain distributions," in which case the
dividend would be subject to a maximum tax rate of 25% (rather than
20%). You will generally recognize capital gain or loss when you dispose
of your Units (by sale, redemption or otherwise). To determine the
amount of this gain or loss, you must subtract your tax basis in your
Units from what you receive in the transaction. Your tax basis in your
Units is generally equal to the cost of your Units. In some cases,
however, you may have to adjust your tax basis after you purchase your
Units.
If you are an individual, the maximum marginal federal tax rate for net
capital gain (except for unrecaptured Section 1250 gains, as discussed
above) 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. 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.
In-Kind Distributions
Under certain circumstances, you may request a distribution of
Securities (an "In-Kind Distribution") when you redeem your Units or at
the Trust's termination. If you request an In-Kind Distribution you will
be responsible for any expenses related to this distribution. This
transaction, however, is subject to taxation and you will recognize gain
or loss, generally based on the value at that time, of the Securities
received.
Limitations on the Deductibility of Trust Expenses.
Certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted
gross income. Miscellaneous itemized deductions subject to this
limitation do not include expenses incurred by the Trust so long as the
Units are held by or for 500 or more persons at all times during the
taxable year or another exception is met. In the event the Units are
held by fewer than 500 persons, additional taxable income may be
realized by the individual (and other noncorporate) Unit holders in
excess of the distributions received from the Trust.
Foreign Investors.
If you are a foreign investor, subject to applicable tax treaties,
distributions from the Trust which constitute dividends for U.S. federal
income tax purposes (other than dividends designated by the Trust as
capital gain dividends) will be subject to U.S. income taxes, including
withholding taxes. Distributions designated as capital gain dividends
should not be subject to U.S. federal income taxes, including
withholding taxes, provided certain conditions are met. You should
consult your tax advisor with respect to the conditions you must meet in
order to be exempt for U.S. tax purposes.
Page 45
Retirement Plans
You may purchase Units of the Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
the Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- 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.
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Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
a Trust exceed amounts in the Income Account on the Income Distribution
Dates. Distribution amounts will vary with changes in a Trust's fees and
expenses, in dividends received and with the sale of Securities. The
Trustee will distribute amounts in the Capital Account, net of amounts
designated to meet redemptions, pay the deferred sales charge or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units. If the Trustee does not have your TIN, it is required to
withhold a certain percentage of your distribution and deliver such
amount to the Internal Revenue Service ("IRS"). You may recover this
amount by giving your TIN to the Trustee, or when you file a tax return.
However, you should check your statements to make sure the Trustee has
your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
a Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust, except for REIT Growth & Income Portfolio, Series 4, by
notifying the Trustee at least 10 days before any Record Date. There is
no distribution reinvestment option for REIT Growth & Income Portfolio,
Series 4. 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
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
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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. If you elect to receive an In-Kind
Distribution of Securities contained in REIT Growth & Income Portfolio,
Series 4, you should be aware that it will be considered a taxable event
at the time you receive the Securities. See "Tax Status" for additional
information.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
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
Page 48
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trusts, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by a Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from each Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account for distribution to Unit holders
or to meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for a Trust to facilitate selling
Securities, exchanged securities or property from the Trusts. If we or
our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information" for each Trust. The Trusts may be terminated earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. If a Trust is terminated due to this last reason,
we will refund your entire 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, 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
Page 49
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive an In-Kind Distribution (reduced by customary
transfer and registration charges and subject to any additional
restrictions imposed on Fee Accounts Units by "wrap fee" plans) rather
than the typical cash distribution. If you elect to receive an In-Kind
Distribution of Securities contained in REIT Growth & Income Portfolio,
Series 4 at termination, you should be aware that it will be considered
a taxable event at the time you receive the Securities. See "Tax Status"
for additional information. You must notify the Trustee at least ten
business days prior to the Mandatory Termination Date if you elect this
In-Kind Distribution option. If you do not elect to participate in the
In-Kind Distribution option, you will receive a cash distribution from
the sale of the remaining Securities, along with your interest in the
Income and Capital Accounts, within a reasonable time after such Trust
is terminated. Regardless of the distribution involved, the Trustee will
deduct from the Trusts any accrued costs, expenses, advances or
indemnities provided for by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Page 50
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 51
FIRST TRUST (R)
COMMUNICATIONS SELECT PORTFOLIO, SERIES 8
ENERGY SELECT PORTFOLIO, SERIES 9
FINANCIAL SERVICES SELECT PORTFOLIO, SERIES 10
INTERNET SELECT PORTFOLIO, SERIES 12
LEADING BRANDS SELECT PORTFOLIO, SERIES 9
PHARMACEUTICAL SELECT PORTFOLIO, SERIES 11
TECHNOLOGY SELECT PORTFOLIO, SERIES 14
COMMUNICATIONS PORTFOLIO, SERIES 8
ENERGY PORTFOLIO, SERIES 9
FINANCIAL SERVICES PORTFOLIO, SERIES 10
INTERNET PORTFOLIO, SERIES 12
LEADING BRANDS PORTFOLIO, SERIES 9
PHARMACEUTICAL PORTFOLIO, SERIES 11
REIT GROWTH & INCOME PORTFOLIO, SERIES 4
TECHNOLOGY PORTFOLIO, SERIES 14
FT 500
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-53412) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts, including their Codes of Ethics, is
available on the EDGAR Database on the Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.; Washington, D.C. 20549-0102
e-mail address: [email protected]
January 17, 2001
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 52
First Trust (R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in FT 500 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 January 17, 2001. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Litigation
Microsoft Corporation 2
Concentrations
Communications 2
Consumer Products 3
Energy 3
Financial Services 4
Pharmaceutical 7
Real Estate Investment Trusts ("REITs") 7
Technology 8
Portfolios
Communications 9
Energy 11
Financial Services 13
Internet 14
Leading Brands 16
Pharmaceutical 18
REIT Growth & Income 19
Technology 21
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in certain
Trusts consist of securities of foreign issuers, an investment in the
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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 the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the U.S. dollar value of these securities will vary
with fluctuations in the U.S. dollar foreign exchange rates for the
various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Litigation
Microsoft Corporation. Microsoft Corporation is currently engaged in
litigation with Sun Microsystems, Inc., the U.S. Department of Justice
and several state Attorneys General. The complaints against Microsoft
include copyright infringement, unfair competition and anti-trust
violations. The claims seek injunctive relief and monetary damages. The
District Court handling the antitrust case recently held that Microsoft
exercised monopoly power in violation of the Sherman Antitrust Act and
various state antitrust laws. The court entered into a final judgment on
June 7, 2000 in which it called for Microsoft to be broken up into two
separate companies, one composed of the company's operating systems and
the other containing its applications software business. The court also
called for significant operating restrictions to be placed on the
company until such time as the separation was completed. Microsoft has
stated that it will appeal the rulings against it after the penalty
phase and final decree. It is impossible to predict what impact the
penalties will have on Microsoft or the value of its stock.
Concentrations
Communications. An investment in Units of the Communications Portfolios
should be made with an understanding of the problems and risks such an
investment may entail. The market for high-technology communications
products and services is characterized by rapidly changing technology,
rapid product obsolescence, cyclical market patterns, evolving industry
standards and frequent new product introductions. The success of the
Page 2
issuers of the Securities depends in substantial part on the timely and
successful introduction of new products and services. An unexpected
change in one or more of the technologies affecting an issuer's products
or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results.
Furthermore, there can be no assurance that the issuers of the
Securities will be able to respond in a timely manner to compete in the
rapidly developing marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of the Trusts' Units. For example, while telephone companies in the
United States are subject to both state and federal regulations
affecting permitted rates of returns and the kinds of services that may
be offered, the prohibition against phone companies delivering video
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in the Trusts' portfolios are engaged in fierce
competition for a share of the market for their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology.
Consumer Products. An investment in the Leading Brands Portfolios should
be made with an understanding of the problems and risks inherent in an
investment in the consumer products industry in general. These include
the cyclicality of revenues and earnings, changing consumer demands,
regulatory restrictions, product liability litigation and other
litigation resulting from accidents, extensive competition (including
that of low-cost foreign competition), unfunded pension fund liabilities
and employee and retiree benefit costs and financial deterioration
resulting from leveraged buy-outs, takeovers or acquisitions. In
general, expenditures on consumer products will be affected by the
economic health of consumers. A weak economy with its consequent effect
on consumer spending would have an adverse effect on consumer products
companies. Other factors of particular relevance to the profitability of
the industry are the effects of increasing environmental regulation on
packaging and on waste disposal, the continuing need to conform with
foreign regulations governing packaging and the environment, the outcome
of trade negotiations and the effect on foreign subsidies and tariffs,
foreign exchange rates, the price of oil and its effect on energy costs,
inventory cutbacks by retailers, transportation and distribution costs,
health concerns relating to the consumption of certain products, the
effect of demographics on consumer demand, the availability and cost of
raw materials and the ongoing need to develop new products and to
improve productivity.
Energy. An investment in Units of the Energy Portfolios should be made
with an understanding of the problems and risks such an investment may
entail. The Energy Portfolios invest in Securities of companies involved
in the energy industry. The business activities of companies held in the
Energy Portfolios 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 Energy Portfolios 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
Energy Portfolios.
According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in U.S. environmental policies and
the continued decline in U.S. production of crude oil. Possible effects
of these factors may be increased U.S. and world dependence on oil from
the Organization of Petroleum Exporting Countries ("OPEC") and highly
uncertain and potentially more volatile oil prices. Factors which the
Sponsor believes may increase the profitability of oil and petroleum
operations include increasing demand for oil and petroleum products as a
result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are
the two principal requirements for stable crude oil markets. Without
excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
Page 3
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 each of the Energy Portfolios.
Financial Services. An investment in Units of the Financial Services
Portfolios should be made with an understanding of the problems and
risks inherent in the bank and financial services sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
Page 4
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Securities in the Trusts' portfolios cannot be
predicted with certainty. The recently enacted Gramm-Leach-Bliley Act
repealed most of the barriers set up by the 1933 Glass-Steagall Act
which separated the banking, insurance and securities industries. Now
banks, insurance companies and securities firms can merge to form one-
stop financial conglomerates marketing a wide range of financial service
products to investors. This legislation will likely result in increased
merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal
thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize
interstate banking has recently been signed into law. Under the
legislation, banks will be able to purchase or establish subsidiary
banks in any state, one year after the legislation's enactment. Since
mid-1997, banks have been allowed to turn existing banks into branches.
Consolidation is likely to continue. The Securities and Exchange
Commission and the Financial Accounting Standards Board require the
expanded use of market value accounting by banks and have imposed rules
requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may
result in increased volatility in the reported health of the industry,
and mandated regulatory intervention to correct such problems.
Additional legislative and regulatory changes may be forthcoming. For
example, the bank regulatory authorities have proposed substantial
changes to the Community Reinvestment Act and fair lending laws, rules
and regulations, and there can be no certainty as to the effect, if any,
that such changes would have on the Securities in the Trusts'
portfolios. In addition, from time to time the deposit insurance system
is reviewed by Congress and federal regulators, and proposed reforms of
that system could, among other things, further restrict the ways in
which deposited moneys can be used by banks or reduce the dollar amount
or number of deposits insured for any depositor. Such reforms could
reduce profitability as investment opportunities available to bank
institutions become more limited and as consumers look for savings
vehicles other than bank deposits. Banks and thrifts face significant
competition from other financial institutions such as mutual funds,
credit unions, mortgage banking companies and insurance companies, and
increased competition may result from legislative broadening of regional
and national interstate banking powers as has been recently enacted.
Among other benefits, the legislation allows banks and bank holding
companies to acquire across previously prohibited state lines and to
consolidate their various bank subsidiaries into one unit. The Sponsor
makes no prediction as to what, if any, manner of bank and thrift
regulatory actions might ultimately be adopted or what ultimate effect
such actions might have on the Trusts' portfolios.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Securities or whether such approvals, if necessary, will be
obtained.
Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
Page 5
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(vii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to
comply with these laws and regulations would cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.
Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini-Superfunds ("Environmental Clean-up
Laws or "ECLs") establish a mechanism to pay for clean-up of waste sites
if PRP's fail to do so, and to assign liability to PRP's. The extent of
liability to be allocated to a PRP is dependent on a variety of factors.
The extent of clean-up necessary and the assignment of liability has not
been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
While current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.
Page 6
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as the stock
prices, of these companies. Furthermore, there can be no assurance that
the issuers of the Securities included in the Financial Services
Portfolios will be able to respond in a timely manner to compete in the
rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
Pharmaceutical. An investment in Units of the Pharmaceutical Portfolios
should be made with an understanding of the problems and risks such an
investment may entail. Companies involved in advanced medical devices
and instruments, drugs and biotech have potential risks unique to their
sector of the healthcare field. These companies are subject to
governmental regulation of their products and services, a factor which
could have a significant and possibly unfavorable effect on the price
and availability of such products or services. Furthermore, such
companies face the risk of increasing competition from new products or
services, generic drug sales, the termination of patent protection for
drug or medical supply products and the risk that technological advances
will render their products obsolete. The research and development costs
of bringing a drug to market are substantial, and include lengthy
governmental review processes with no guarantee that the product will
ever come to market. Many of these companies may have losses and may not
offer certain products for several years. Such companies may also have
persistent losses during a new product's transition from development to
production, and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the
biotechnology/pharmaceuticals sector very attractive for investors
seeking the potential for growth in their investment portfolio. However,
there are no assurances that the Trusts' objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs). The Sponsor is unable to predict the
effect of any of these proposals, if enacted, on the issuers of
Securities in the Trusts.
Real Estate Investment Trusts ("REITs"). An investment in Units of the
REIT Growth & Income Trust should be made with an understanding of risks
inherent in an investment in REITs specifically and real estate
generally (in addition to securities market risks). Generally, these
include economic recession, the cyclical nature of real estate markets,
competitive overbuilding, unusually adverse weather conditions, changing
demographics, changes in governmental regulations (including tax laws
and environmental, building, zoning and sales regulations), increases in
real estate taxes or costs of material and labor, the inability to
secure performance guarantees or insurance as required, the
unavailability of investment capital and the inability to obtain
construction financing or mortgage loans at rates acceptable to builders
and purchasers of real estate. Additional risks include an inability to
reduce expenditures associated with a property (such as mortgage
payments and property taxes) when rental revenue declines, and possible
loss upon foreclosure of mortgaged properties if mortgage payments are
not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
Equity REITs emphasize direct property investment, holding their
invested assets primarily in the ownership of real estate or other
equity interests. REITs obtain capital funds for investment in
underlying real estate assets by selling debt or equity securities in
the public or institutional capital markets or by bank borrowing. Thus,
the returns on common equities of the REITs in which the Trust invests
will be significantly affected by changes in costs of capital and,
particularly in the case of highly "leveraged" REITs (i.e., those with
large amounts of borrowings outstanding), by changes in the level of
interest rates. The objective of an equity REIT is to purchase income-
producing real estate properties in order to generate high levels of
cash flow from rental income and a gradual asset appreciation, and they
typically invest in properties such as office, retail, industrial, hotel
and apartment buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
Page 7
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
The underlying value of the Securities and the Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in a Trust. The value of the REITs may at times be particularly
sensitive to devaluation in the event of rising interest rates.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in the Trust may
be adversely affected by increases or decreases in property tax rates
and assessments or reassessments of the properties underlying the REITs
by taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in the Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in the REIT Growth
& Income Portfolio.
Technology. An investment in Units of the Internet Portfolios and the
Technology Portfolios should be made with an understanding of the
characteristics of the problems and risks such an investment may entail.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
Page 8
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trusts.
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 Communications Select Portfolio, Series 8
and Communications Portfolio, Series 8
Both the Communications Select Portfolio, Series 8 and the
Communications Portfolio, Series 8 contain common stocks of the
following companies:
Communications Services (Domestic)
__________________________________
BellSouth Corporation, headquartered in Atlanta, Georgia, is a
communications company serving customers in 20 countries. The company
provides wireline network access services for voice, digital and data,
cable and digital TV and advertising services, web design and hosting
and Internet access and wireless communications.
Qwest Communications International Inc., headquartered in Denver,
Colorado, provides broadband Internet-based data, voice and image
communications for businesses and consumers. The company also constructs
and installs fiber optic systems for other communications providers and
its own use.
SBC Communications Inc., headquartered in San Antonio, Texas, provides
landline and wireless telecommunications services and equipment,
directory advertising, publishing and cable television services.
Verizon Communications, Inc., headquartered in New York, New York,
provides wireline voice and data services, wireless services, Internet
service and published directory information. The company also provides
network services for the federal government including business phone
lines, data services, telecommunications equipment and pay phones. The
company operates worldwide.
WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance, international and Internet services in
over 65 countries encompassing the Americas, Europe and the Asia-Pacific
regions. The company also offers wireless and 800 services, calling
cards, private lines and debit cards.
Page 9
Communications Services (Foreign)
_________________________________
Deutsche Telekom AG (ADR), headquartered in Bonn, Germany, is one of
Europe's, and the world's, largest telecommunications services
providers. The company offers domestic and international public fixed-
link voice telephone service in Germany. The company also offers data
transmission services, network services, on-line services, telephone
directory publishing, dial-in information lines, paging and mobile
telecommunications services, and supplies and services
telecommunications equipment.
Telecom Italia SpA (ADR), headquartered in Rome, Italy, is the parent
company of companies operating in the fields of telecommunications,
manufacturing, electronics and network construction. The company's
subsidiaries are also active in publishing, telematics information and
auxiliary services.
Telefonica S.A. (ADR), headquartered in Madrid, Spain, is the exclusive
supplier of voice telephone services in Spain under a contract with the
Spanish State. The company also provides telecommunications services in
Argentina, Brazil, El Salvador, Peru, Portugal, Puerto Rico, the United
States and Venezuela.
Telefonos de Mexico SA de CV (ADR), headquartered in Mexico City,
Mexico, provides local, domestic and international long-distance,
wireless, data, and video transmission services in Mexico.
Communications Equipment
________________________
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets a broad range of products and services that
enable its customers to construct and upgrade their telecommunications
networks to support increasing user demand for voice, data and video
services.
Nortel Networks Corporation, headquartered in Brampton, Ontario, Canada,
makes fully-digital telecommunications switching equipment and
communications equipment and systems for business and residential use.
The company operates worldwide.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
voice, data and video transport and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Fiber Optics
____________
Corning Incorporated, headquartered in Corning, New York, with
subsidiaries, manufactures and sells optical fiber, cable, hardware and
components for the global telecommunications industry; ceramic emission
control substrates used in pollution-control devices; and plastic and
glass laboratory products. The company also produces high-performance
displays and components for television and other communications-related
industries.
JDS Uniphase Corporation, headquartered in San Jose, California,
designs, develops, makes and markets laser subsystems, laser-based
semiconductor wafer defect examination and analysis equipment and fiber
optic telecommunications equipment products.
Sycamore Networks, Inc., headquartered in Chelmsford, Massachusetts,
develops and markets software-based optical networking products. The
company's customers include local exchange carriers, incumbent local
exchange carriers, long distance carriers, Internet service providers,
cable operators, international telephone companies and wholesale carriers.
Networking Products
___________________
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
Juniper Networks, Inc., headquartered in Mountain View, California,
provides Internet infrastructure solutions for Internet service
providers and other telecommunications service providers. The company
delivers next generation Internet backbone routers that are designed for
service provider networks.
Wireless Communications
_______________________
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.
L.M. Ericsson AB (ADR), headquartered in Stockholm, Sweden, develops and
produces advanced systems, products and services for wired and mobile
communications in public and private networks worldwide. The company's
product line includes digital and analog systems for telephones and
networks, microwave radio links, radar surveillance systems and business
systems.
Motorola, Inc., headquartered in Schaumburg, Illinois, designs, makes
and sells, mainly under the "Motorola" brand name, two-way land mobile
communication systems, paging and wireless data systems, personal
communications equipment and systems; semiconductors; and electronic
equipment for military and aerospace use.
NTT DoCoMo, Inc. (ADR), headquartered in Tokyo, Japan, provides various
types of telecommunication services including cellular phones, personal
handyphone systems (PHS), paging, satellite mobile communication and
Page 10
wireless Private Branch Exchange system services. The company also sells
cellular phones, PHS, car phones and pagers.
Nokia Oy (ADR), headquartered in Espoo, Finland, supplies
telecommunications systems and equipment, including mobile phones,
battery chargers for mobile phones, computer monitors, multimedia
network terminals and satellite receivers. The company provides its
products and services worldwide.
QUALCOMM Incorporated, headquartered in San Diego, California, designs,
develops, makes, sells, licenses and operates advanced communications
systems and products based on proprietary digital wireless technology.
The company's products include "CDMA" integrated circuits, wireless
phones and infrastructure products, transportation management
information systems and ground stations, and phones for the low-earth-
orbit satellite communications system.
Sprint Corp. (PCS Group), headquartered in Kansas City, Missouri,
operates the largest 100% digital, 100% personal cellular communication
system ("PCS") nationwide wireless network in the United States.
Vodafone Group Plc (ADR), headquartered in Newbury, Berkshire, England,
provides mobile telecommunication services, supplying its customers with
digital and analog cellular telephone, paging and personal
communications services. The company offers its services in many
countries, including Australia, Egypt, Fiji, France, Germany, Greece,
Malta, the Netherlands, New Zealand, South Africa, Sweden, Uganda and
the United States.
Equity Securities Selected for Energy Select Portfolio, Series 9 and
Energy Portfolio, Series 9
Both the Energy Select Portfolio, Series 9 and the Energy Portfolio,
Series 9 contain common stocks of the following companies:
Natural Gas
___________
Apache Corporation, headquartered in Houston, Texas, is an independent
energy company that explores for, develops and produces natural gas,
crude oil and natural gas liquids.
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.
The Williams Companies, Inc., headquartered in Tulsa, Oklahoma, through
subsidiaries, transports, sells, gathers and processes natural gas;
transports petroleum products; and provides telecommunications services.
The company also provides a variety of other products and services to
the energy industry and financial institutions.
Oil & Gas-Drilling
__________________
ENSCO International Incorporated, headquartered in Dallas, Texas, is an
international offshore contract drilling company that also provides
marine transportation services in the Gulf of Mexico.
Global Marine Inc., headquartered in Houston, Texas, provides offshore
drilling services on a day rate basis and offshore drilling management
services on a turnkey basis.
Nabors Industries, Inc., headquartered in Houston, Texas, operates one
of the largest land oil and gas drilling contract businesses in the
world. The company also provides a number of ancillary well-site
services and makes top drives for a broad range of drilling rig
applications and rig instrumentation equipment to monitor rig performance.
Noble Drilling Corporation, headquartered in Houston, Texas, operates as
a major drilling contractor with offshore operations in the United
States, Africa, Canada, India, Mexico, the Middle East, the North Sea
and South America.
Santa Fe International Corporation, headquartered in Dallas, Texas,
conducts international offshore and land contract drilling. The company
also provides drilling related services to the petroleum industry
worldwide, including third-party rig operations, incentive drilling,
drilling engineering and project management services.
Oil & Gas-Exploration & Production
__________________________________
Anadarko Petroleum Corporation, headquartered in Houston, Texas,
explores for, develops, produces and markets natural gas, crude oil,
condensate and natural gas liquids, both domestically and
internationally. The company also participates in overseas exploration
joint ventures.
Page 11
Barrett Resources Corporation, headquartered in Denver, Colorado,
explores for, develops and produces oil and gas, mostly in the Rocky
Mountain region of Colorado, Utah and Wyoming. The company also operates
in the mid-continent region of the United States and the Gulf of Mexico
region of offshore Louisiana and Texas.
Burlington Resources Inc., headquartered in Houston, Texas, explores
for, develops and produces oil and gas. The company's properties are
primarily located in the United States, while its international
operations are conducted in the North Sea, South America, the United
Kingdom and Indonesia.
EOG Resources, Inc., headquartered in Houston, Texas, explores for,
develops, produces and markets natural gas and crude oil. The company's
operations are primarily in major producing basins in the United States,
as well as in Canada, Trinidad and India and, to a lesser extent,
selected other international areas.
Vintage Petroleum, Inc., headquartered in Tulsa, Oklahoma, acquires,
explores and develops oil and gas reserves. The company also purchases,
gathers and markets gas and oil in the United States, Argentina and
Bolivia.
Oil-Field Services
__________________
BJ Services Company, headquartered in Houston, Texas, provides well
stimulation, cementing, sand control and coiled tubing services used in
the completion of new oil and natural gas wells and in remedial work on
existing wells, both onshore and offshore.
Baker Hughes Incorporated, headquartered in Houston, Texas, makes
drilling products for the oil and gas industry; production products used
in installing, cementing, and perforating the casing in the drilling
hole; and process equipment, pumps and instrumentation.
Halliburton Company, headquartered in Dallas, Texas, through
subsidiaries, provides services and products for the exploration,
development and production segments of the petroleum industry. The
company also provides engineering, construction, project management,
facilities operation and maintenance, and environmental services for
industrial and governmental customers.
Schlumberger Limited, headquartered in New York, New York, supplies
products and services to the petroleum industry. The company's oilfield
services cover exploration, production and completion services; and its
Omnes unit provides information technology and communications services
to oil and gas concerns. The company also supplies test and technology
services.
Tidewater Inc., headquartered in New Orleans, Louisiana, provides
services and equipment to the offshore energy industry through the
operation of one of the world's largest fleets of offshore service
vessels.
Weatherford International, Inc., headquartered in Houston, Texas,
provides marine drilling and workover services to the oil and gas
industries. The company also makes, distributes and services oilfield
equipment, drill pipes, premium tubulars and artificial lift products.
Oil-Integrated
______________
Chevron Corporation, headquartered in San Francisco, California,
explores for, develops and produces crude oil and natural gas; refines
crude oil into finished petroleum products; transports and markets crude
oil, natural gas and petroleum products; and makes chemicals for
industrial uses.
Conoco Inc. (Class A), headquartered in Houston, Texas, explores for,
produces and sells crude oil, natural gas and natural gas liquids. The
company's downstream activities include refining crude oil and other
feedstocks into petroleum products, buying and selling crude oil and
refined products and transporting, distributing and marketing petroleum
products. The company operates worldwide.
ENI SpA (ADR), headquartered in Rome, Italy, through subsidiaries,
explores for, develops and produces oil and natural gas; supplies,
transmits and distributes natural gas; refines and markets oil and
petroleum products; produces and sells petrochemicals; and provides
contracting and engineering oilfield services.
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.
Royal Dutch Petroleum Company, headquartered in The Hague, the
Netherlands, produces crude oil, natural gas, chemicals, coal and metals
worldwide; and provides integrated petroleum services in the United
States.
Total Fina Elf SA (ADR), headquartered in Paris, France, makes rubber-
based products and specialty chemicals; explores for and produces crude
oil and natural gas; and refines and markets petroleum products.
USX-Marathon Group, headquartered in Houston, Texas, explores for,
produces, refines, distributes and markets crude oil, natural gas and
petroleum products.
Oil-Refining & Marketing
________________________
Tosco Corporation, headquartered in Stamford, Connecticut, refines and
markets petroleum products in the United States, primarily on the East
and West Coasts. The company's refineries process crude oil, feedstocks
and blendstocks into various petroleum products. The company also has
related commercial activities throughout the United States and
internationally.
Page 12
Valero Energy Corporation, headquartered in San Antonio, Texas, is one
of the largest independent U.S. refining and marketing companies, and
the largest on the Gulf Coast. The company mainly produces premium,
environmentally clean products such as reformulated gasoline and low-
sulfur diesel oxygenates. It also produces a substantial slate of middle
distillates, jet fuel and petrochemicals.
Equity Securities Selected for Financial Services Select Portfolio,
Series 10 and Financial Services Portfolio, Series 10
Both the Financial Services Select Portfolio, Series 10 and the
Financial Services Portfolio, Series 10 contain common stocks of the
following companies:
Banks & Thrifts
_______________
Bank of America Corporation, headquartered in Charlotte, North Carolina,
is the holding company for Bank of America and NationsBank and conducts
a general banking business in the United States and overseas.
Comerica Incorporated, headquartered in Detroit, Michigan, conducts a
general commercial banking business primarily in four states. Business
conducted includes corporate, consumer and private banking,
institutional trust and investment management, international finance and
trade services.
Firstar Corporation, headquartered in Milwaukee, Wisconsin, is the
holding company for Firstar Bank. The company offers banking, trust,
investment, insurance and securities brokerage services. The company
also operates a consumer finance company and an investment advisory firm.
Fleet Boston Financial Corporation, headquartered in Boston,
Massachusetts, conducts a general commercial banking and trust business
through a network of branch offices, ATMs and telephone banking centers.
The company also provides other activities related to banking and finance.
J.P. Morgan Chase & Co., headquartered in New York, New York, conducts
domestic and international financial services business with operations
in more than 50 countries and clients throughout the world.
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.
Financial Services
__________________
American Express Company, headquartered in New York, New York, through
subsidiaries, provides travel-related services (including travelers'
cheques, American Express cards, consumer lending, tour packages and
itineraries, and publications); investors' diversified financial
products and services; and international banking services.
Capital One Financial Corporation, headquartered in Falls Church,
Virginia, through subsidiaries, issues Visa and MasterCard credit card
products to customers in the United States and the United Kingdom. The
company also provides consumer lending and deposit services.
Citigroup Inc., headquartered in New York, New York, operates the
largest financial services company in the United States. The company
offers consumer, investment and private banking, life insurance,
property and casualty insurance and consumer finance products.
Concord EFS, Inc., headquartered in Memphis, Tennessee, provides
electronic transaction authorization, processing, settlement and funds
transfer services on a nationwide basis.
Fannie Mae, headquartered in Washington, D.C., provides ongoing
assistance to the secondary market for residential mortgages by
providing liquidity for residential mortgage investments, thereby
improving the distribution of investment capital available for such
mortgage financing.
Freddie Mac, headquartered in McLean, Virginia, was chartered by
Congress in 1970 to create a continuous flow of funds to mortgage
lenders in support of home ownership and rental housing. The company
purchases first lien, conventional and residential mortgages, including
both whole loans and participation interests in such mortgages.
Household International, Inc., headquartered in Prospect Heights,
Illinois, through subsidiaries, provides consumer financial services,
primarily offering consumer lending products to middle market consumers
in the United States, Canada and the United Kingdom.
ING Groep N.V. (ADR), headquartered in Amsterdam, the Netherlands,
offers a comprehensive range of financial services worldwide, including
life and non-life insurance, commercial and investment banking, asset
management and related products.
MBNA Corporation, headquartered in Wilmington, Delaware, is the holding
company for MBNA America Bank, N.A. The company issues bank credit cards
marketed primarily to members of associations and customers of financial
institutions. The company also makes other consumer loans, and offers
insurance and deposit products.
Providian Financial Corporation, headquartered in San Francisco,
California, provides consumer loans, deposit products and other banking
services to consumers nationwide, including credit cards, revolving
lines of credit, home loans, secured credit cards and fee-based services.
Page 13
Insurance
_________
AFLAC Incorporated, headquartered in Columbus, Georgia, writes
supplemental health insurance, mainly limited to reimbursement for
medical, non-medical and surgical expenses of cancer. The company also
sells individual and group life, and accident and health insurance.
The Allstate Corporation, headquartered in Northbrook, Illinois, through
subsidiaries, writes property-liability insurance, primarily private
passenger automobile and homeowners policies. The company also offers
life insurance, annuity and group pension products.
American International Group, Inc., headquartered in New York, New York,
through subsidiaries, provides a broad range of insurance and insurance-
related activities and financial services in the United States and
abroad. The company writes property and casualty and life insurance, and
also provides financial services.
CIGNA Corporation, headquartered in Philadelphia, Pennsylvania, operates
as one of the largest investor-owned, insurance-based financial services
organizations in the country. The company focuses its efforts on
employee benefits, property-casualty insurance, managed care products
and services, retirement products and services and individual financial
services worldwide.
John Hancock Financial Services, Inc., headquartered in Boston,
Massachusetts, provides insurance and investment products, including
investment management and advisory services. The company serves retail
and institutional clients.
Nationwide Financial Services, Inc. (Class A), headquartered in
Columbus, Ohio, is the holding company for Nationwide Insurance
Enterprise. The company offers long-term savings and retirement products
to retail and institutional customers throughout the United States.
Products offered include variable and fixed annuities, life insurance,
mutual funds and retirement products. The company also offers
administrative services.
Investment Services
___________________
The Bear Stearns Companies Inc., headquartered in New York, New York,
provides investment banking, securities trading and brokerage services
to corporations, governments, and institutional and individual investors
worldwide. The company also provides securities clearing and financing
services for broker/dealers, hedge funds, money managers and other
clients worldwide.
Eaton Vance Corp., headquartered in Boston, Massachusetts, through
subsidiaries, creates, markets and manages mutual funds. The company
also provides management and counseling services to individual and
institutional clients.
The Goldman Sachs Group, Inc., headquartered in New York, New York, is a
global investment banking and securities firm specializing in investment
banking, trading and principal investments, and asset management and
securities services. The company's clients include corporations,
financial institutions, government and high net-worth individuals.
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.
Merrill Lynch & Co., Inc., headquartered in New York, New York, through
subsidiaries, provides a variety of financial and investment services
through offices around the world. The company serves individual and
institutional clients with a range of financial services, including
personal financial planning, trading and brokering, banking and lending,
and insurance.
Morgan Stanley Dean Witter & Co., headquartered in New York, New York,
provides a broad range of nationally-marketed credit and investment
products, with a principal focus on individual customers. The company
provides investment banking, transaction processing, private-label
credit card and various other investment advisory services.
The Charles Schwab Corporation, headquartered in San Francisco,
California, through subsidiaries, provides discount securities brokerage
and related financial services, and offers trade execution services for
Nasdaq securities to broker/dealers and institutional customers.
Stilwell Financial, Inc., headquartered in Kansas City, Missouri,
provides investment management services through its subsidiaries, Janus
Capital Corporation, Berger LLC and Nelson Money Managers Plc. The
company also has a minority interest in DST Systems, which provides
information processing and software.
Equity Securities Selected for Internet Select Portfolio, Series 12 and
Internet Portfolio, Series 12
Both the Internet Select Portfolio, Series 12 and the Internet
Portfolio, Series 12 contain common stocks of the following companies:
Access/Information Providers
____________________________
AOL Time Warner Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada, Europe and Japan
offering subscribers a wide variety of services, including electronic
Page 14
mail, conferencing, news, sports, Internet access, entertainment,
weather, stock quotes, software, computing support and online classes.
The company also publishes and distributes magazines and books; produces
and distributes recorded music, motion pictures and television
programing; owns and operates retail stores; owns and administers music
copyrights; and operates cable TV systems.
CNET Networks, Inc., headquartered in San Francisco, California,
operates a media company integrating television programming with a
network of channels on the World Wide Web. The company produces
television programs and operates an Internet network focused on
computers and technologies.
Qwest Communications International Inc., headquartered in Denver,
Colorado, provides broadband Internet-based data, voice and image
communications for businesses and consumers. The company also constructs
and installs fiber optic systems for other communications providers and
its own use.
TMP Worldwide Inc., headquartered in New York, New York, is a
recruitment advertising agency and executive search and selection firm.
The company has built Monster.com into one of the Internet's leading
career destination portals.
WorldCom, Inc., headquartered in Clinton, Mississippi, operates as a
global communications company which provides facilities-based and fully-
integrated local, long distance, international and Internet services in
over 65 countries encompassing the Americas, Europe and the Asia-Pacific
regions. The company also offers wireless and 800 services, calling
cards, private lines and debit cards.
Yahoo! Inc., headquartered in Santa Clara, California, is a global
Internet media company that offers a family of branded on-line media
properties, including "YAHOO!" The company's Web site enables users to
locate and access information and services through hypertext links from
a hierarchical, subject-based directory of Web sites.
Communications Equipment
________________________
JDS Uniphase Corporation, headquartered in San Jose, California,
designs, develops, makes and markets laser subsystems, laser-based
semiconductor wafer defect examination and analysis equipment and fiber
optic telecommunications equipment products.
Nortel Networks Corporation, headquartered in Brampton, Ontario, Canada,
makes fully-digital telecommunications switching equipment and
communications equipment and systems for business and residential use.
The company operates worldwide.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
voice, data and video transport and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Computers & Peripherals
_______________________
Brocade Communications Systems, Inc., headquartered in San Jose,
California, supplies Fibre Channel switching solutions for storage area
networks (SANs). The company's products are connected to computers and
storage devices, such as disk drives and tape drives, that computers use
to save information.
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
manufactures, markets and supports hardware, software and service
products for the enterprise storage market. The company's products are
sold as integrated storage solutions for customers on various computing
platforms including "UNIX" and "Windows NT."
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.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products, including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support, using the UNIX operating system.
Internet Software & Services
____________________________
Ariba, Inc., headquartered in Mountain View, California, provides
intranet- and Internet-based business-to-business electronic commerce
solutions for operating resources, such as information technology and
telecommunications equipment, professional services, supplies,
facilities and office equipment, and expense items.
BEA Systems, Inc., headquartered in San Jose, California, markets and
supports software used by large organizations to enable and support
their most critical business processes. The company's products have been
adopted in a wide variety of industries, including telecommunications,
banking and finance, manufacturing, retail and transportation.
Page 15
BroadVision, Inc., headquartered in Redwood City, California, develops,
markets and supports application software solutions. The company
provides an integrated software application system, "BroadVision One-To-
One," that enables businesses to create applications for interactive
marketing and selling services on the World Wide Web.
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").
Exodus Communications, Inc., headquartered in Santa Clara, California,
provides Internet system and network management solutions for
enterprises with mission-critical Internet operations. The company's
data centers are located throughout the United States and in England.
Inktomi Corporation, headquartered in Foster City, California, develops
and markets scalable Internet software. The company's products are
designed to enhance the performance and intelligence of large scale
networks and include search engine, shopping engine and traffic service
network caching products.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a wide range of software products.
The company offers operating system software, server application
software, business and consumer applications software, software
development tools and Internet and intranet software. "Windows" is the
company's flagship PC operating system. The company also develops the
MSN network of Internet products and services.
Openwave Systems, Inc., headquartered in Redwood City, California, is a
leading provider of Internet-based communication infrastructure software
and applications.
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.
VeriSign, Inc., headquartered in Mountain View, California, provides
digital certificate solutions and infrastructure needed by companies,
government agencies, trading partners and individuals to conduct trusted
and secure communications and commerce over the Internet and over
intranets and extranets using the Internet Protocol.
Networking Products
___________________
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
Juniper Networks, Inc., headquartered in Mountain View, California,
provides Internet infrastructure solutions for Internet service
providers and other telecommunications service providers. The company
delivers next generation Internet backbone routers that are designed for
service provider networks.
Sycamore Networks, Inc., headquartered in Chelmsford, Massachusetts,
develops and markets software-based optical networking products. The
company's customers include local exchange carriers, incumbent local
exchange carriers, long distance carriers, Internet service providers,
cable operators, international telephone companies and wholesale carriers.
Semiconductors
______________
Broadcom Corporation (Class A), headquartered in Irvine, California,
develops highly integrated silicon solutions that enable broadband
digital data transmission to the home and within the business enterprise.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
Equity Securities Selected for Leading Brands Select Portfolio, Series 9
and Leading Brands Portfolio, Series 9
Both the Leading Brands Select Portfolio, Series 9 and the Leading
Brands Portfolio, Series 9 contain common stocks of the following
companies:
Apparel/Retail
______________
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in the United States, Canada, France, Germany,
Japan and the United Kingdom. The company's stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy."
Page 16
Jones Apparel Group, Inc., headquartered in Bristol, Pennsylvania,
designs, contracts for the manufacture of, and markets a broad range of
primarily better-priced women's suits, dresses and sportswear. The
company also sells clothing through "Jones" factory outlet stores and
full-price retail stores.
Beverages
_________
Anheuser-Busch Companies, Inc., headquartered in St. Louis, Missouri,
produces and distributes beer under brand names such as "Budweiser,"
"Busch" and "Michelob." The company also manufactures metal beverage
containers, recycles metal and glass beverage containers, and operates
rice milling and barley seed processing plants. The company also owns
and operates theme parks.
The Coca-Cola Company, headquartered in Atlanta, Georgia, makes and
distributes soft drink concentrates and syrups; and also markets juice
and juice-drink products. The company's products are sold in 200
countries and include the leading soft drink products in most of these
countries.
PepsiCo, Inc., headquartered in Purchase, New York, markets and
distributes beverages including "Pepsi-Cola," "Diet Pepsi," "Pepsi Max,"
"Mountain Dew," "7UP," "Diet 7UP," "Mirinda," "Slice" and "Tropicana
Pure Premium." The company, which operates internationally, also makes
and distributes ready-to-drink Lipton tea products and snacks, with
"Frito-Lay" representing the North American business.
Consumer Electronics
____________________
Koninklijke (Royal) Philips Electronics N.V., headquartered in
Amsterdam, the Netherlands, makes lighting products; consumer
electronics; components and sub-systems; music and films, integrated
circuits and discrete semiconductors; and medical systems and business
electronics. The company markets its products worldwide.
Food
____
ConAgra Foods, Inc., headquartered in Omaha, Nebraska, is a diversified
food company that operates across the food chain, from agricultural
input to the production and sale of branded consumer products.
H.J. Heinz Company, headquartered in Pittsburgh, Pennsylvania,
manufactures, packages and sells processed food products throughout the
world. The company's products include ketchup, sauces/condiments, pet
food, seafood products, baby food, soups, lower-calorie products, bakery
products, frozen dinners and entrees, and frozen pizza. The company also
provides weight control services.
Hershey Foods Corporation, headquartered in Hershey, Pennsylvania,
manufactures, distributes and sells consumer food products. The company
produces and distributes a line of chocolate and non-chocolate,
confectionery and grocery products in the United States and
internationally.
Wm. Wrigley Jr. Company, headquartered in Chicago, Illinois, makes and
sells chewing gum, sold in the United States and abroad under the names
"Wrigley's Spearmint," "Doublemint," "Juicy Fruit," "Freedent," "Big
Red," "Winterfresh," "Extra," "Arrowmint," "Cool Crunch," "Dulce 16,"
"Orbit," "Big Boy," "Hubba Bubba" and "Big G."
Household Products
__________________
The Clorox Company, headquartered in Oakland, California, manufactures
and sells household products, including the brand names "Armor All,"
"Black Flag," "Brita," "Clorox," "Combat," "Fresh Step," "Glad," "Hidden
Valley," "Jonny Cat," "Kingsford," "Liquid-Plumr," "Pine-Sol," "S.O.S.,"
"STP," "Scoop Away" and "Tilex."
Colgate-Palmolive Company, headquartered in New York, New York, is an
international consumer products company. The company's products include
toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps,
dishwashing liquid and laundry products, among others. The company's
brand names include "Ajax," "Colgate," "Fab," "Mennen," "Palmolive,"
"Prescription Diet," "Protex," "Science Diet" and "Soupline/Suavitel."
Kimberly-Clark Corporation, headquartered in Dallas, Texas, is an
international company which manufactures and markets tissue products,
personal care and healthcare products, as well as business,
correspondence and technical papers. The company sells its products
under the brand names, "Depend," "Huggies," "Kleenex," "Kotex," "Page"
and "Tecnol."
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.
Leisure/Entertainment
_____________________
AOL Time Warner Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada, Europe and Japan
offering subscribers a wide variety of services, including electronic
mail, conferencing, news, sports, Internet access, entertainment,
weather, stock quotes, software, computing support and online classes.
The company also publishes and distributes magazines and books; produces
and distributes recorded music, motion pictures and television
programing; owns and operates retail stores; owns and administers music
copyrights; and operates cable TV systems.
Page 17
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.) and publishing operations.
Harley-Davidson, Inc., headquartered in Milwaukee, Wisconsin, designs,
manufactures and sells heavyweight touring and custom motorcycles and
related products and accessories internationally. The company also
provides financing and insurance services for its products.
Pharmaceuticals
_______________
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries,
baby care products, dental rinse and other proprietary health items.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health products
and over-the-counter foot care and sun care products.
Restaurants
___________
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's." The company's restaurants
prepare, assemble, package and sell a limited menu of moderately-priced
foods including hamburgers, chicken, salads, breakfast foods and
beverages.
Starbucks Corporation, headquartered in Seattle, Washington, buys and
roasts whole bean coffees and sells its own brand of specialty coffee.
The company has retail operations in North America and the Pacific Rim.
The company also produces and sells the bottled "Frappucino" coffee
drink and a line of ice creams.
Toiletries/Cosmetics
____________________
Avon Products, Inc., headquartered in New York, New York, makes and
markets beauty and related products, which include cosmetics, fragrances
and toiletries; gifts and decorative products; apparel; and fashion
jewelry and accessories.
The Gillette Company, headquartered in Boston, Massachusetts, is a
worldwide manufacturer of grooming products, writing instruments and
correction products, toothbrushes and oral care appliances, and alkaline
batteries.
Equity Securities Selected for Pharmaceutical Select Portfolio, Series 11
and Pharmaceutical Portfolio, Series 11
Both the Pharmaceutical Select Portfolio, Series 11 and the
Pharmaceutical Portfolio, Series 11 contain common stocks of the
following companies:
Abbott Laboratories, headquartered in Abbott Park, Illinois, discovers,
develops, makes and sells a broad and diversified line of healthcare
products and services.
American Home Products Corporation, headquartered in Madison, New
Jersey, makes nutritionals, cardiovascular and metabolic disease
therapies, mental health products, anti-inflammatory/analgesic products
and vaccines, and over-the-counter drugs. The company also makes crop
protection and pest control products.
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.
Andrx Group, headquartered in Fort Lauderdale, Florida, formulates and
commercializes controlled-release oral pharmaceuticals utilizing its
proprietary drug delivery technologies to improve drug therapy. The
company also develops generic versions of selected high sales volume
controlled-release brand name pharmaceuticals.
AstraZeneca Group Plc (ADR), headquartered in London, England, is a
holding company. Through its subsidiaries, the company researches,
develops and makes ethical (prescription) pharmaceuticals and
agricultural chemicals; and provides disease-specific healthcare
services. Pharmaceutical products are focused on three areas: oncology,
primary care, and specialist/hospital care.
Biogen, Inc., headquartered in Cambridge, Massachusetts, develops and
makes pharmaceuticals for human healthcare through genetic engineering.
The company's primary focus is on developing and testing products for
the treatment of multiple sclerosis, inflammatory and respiratory
diseases, kidney diseases and certain viruses and cancers.
Page 18
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
COR Therapeutics, Inc., headquartered in South San Francisco,
California, focuses on the development of novel pharmaceutical products
for the treatment and prevention of severe cardiovascular diseases. The
company focuses on the discovery, development and commercialization of
pharmaceutical products to prevent and treat severe cardiovascular
diseases, including arterial thrombosis, a blockage occurring in an
artery; venous thrombosis, a blockage occurring in a vein; and
restenosis, a renarrowing of the arteries.
Elan Corporation Plc (ADR), headquartered in Dublin, Ireland, is a
specialty pharmaceutical company. The company develops and licenses drug
delivery systems formulated to increase the therapeutic value of certain
medications, with reduced side effects. The company also develops and
markets therapeutic agents to diagnose and treat central nervous systems
diseases and disorders.
Genentech, Inc., headquartered in South San Francisco, California,
discovers, develops, makes and sells human pharmaceuticals based on
recombinant DNA technology (gene splicing). The company also makes and
markets certain products within the United States which are sold to F.
Hoffmann-La Roche Ltd. (HLR) for distribution outside the United States.
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.
GlaxoSmithKline Plc (ADR), headquartered in Greenford, Middlesex,
England, conducts research into and develops, makes and markets ethical
pharmaceuticals around the world. Products include gastrointestinal,
respiratory, anti-emesis, anti-migraine, systemic antibiotics,
cardiovascular, dermatological, foods and animal health.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee, is a
vertically integrated pharmaceutical company that manufactures, markets
and sells primarily branded prescription pharmaceutical products.
Eli Lilly and Company, headquartered in Indianapolis, Indiana, with
subsidiaries, develops, makes and markets pharmaceutical and animal
health products sold in countries around the world. The company also
provides healthcare management services in the United States.
MedImmune, Inc., headquartered in Gaithersburg, Maryland, develops and
markets products for the prevention and treatment of infectious
diseases, autoimmune diseases and cancer. The company's products are
also used in transplantation medicine.
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.
Novartis AG (ADR), headquartered in Basel, Switzerland, manufactures
healthcare products for use in a broad range of medical fields, as well
as nutritional and agricultural products. The company markets its
products worldwide.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries,
baby care products, dental rinse and other proprietary health items.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health products
and over-the-counter foot care and sun care products.
Equity Securities Selected for REIT Growth & Income Portfolio, Series 4
The REIT Growth & Income Portfolio, Series 4 contains stocks of the
following companies:
Apartment Investment & Management Company, headquartered in Denver,
Colorado, is a self-managed real estate investment trust engaged in the
ownership, acquisition, development, expansion and management of multi-
family apartment properties.
Avalonbay Communities, Inc., headquartered in Alexandria, Virginia, is a
self-managed real estate investment trust which owns or has interests in
a portfolio of apartment communities located in the Northeast, Mid-
Atlantic, Midwest and Pacific Northwest regions, as well as California.
Bedford Property Investors, Inc., headquartered in Lafayette,
California, is a self-managed real estate investment trust which invests
in completed, income-producing real estate properties such as office and
industrial buildings, mainly in the western United States.
Page 19
Brandywine Realty Trust, headquartered in Newtown Square, Pennsylvania,
is a self-managed real estate investment trust which owns a portfolio of
primarily suburban office and industrial buildings located primarily in
the Mid-Atlantic region. The company also owns an interest in and
operates a commercial real estate management services company.
CBL & Associates Properties, Inc., headquartered in Chattanooga,
Tennessee, is a self-managed real estate investment trust which is
engaged in the ownership, operation, marketing, management, leasing,
expansion, development, redevelopment, acquisition and financing of
regional malls and community and neighborhood centers in the United
States.
Camden Property Trust, headquartered in Houston, Texas, is a self-
managed real estate investment trust engaged in the ownership,
development, acquisition, marketing, management and disposition of multi-
family apartment communities in the southwestern, southeastern,
midwestern and western regions of the United States.
Capital Automotive REIT, headquartered in McLean, Virginia, is a self-
managed real estate investment trust which owns multi-site, multi-
franchised motor vehicle dealerships and motor vehicle-related
businesses in major metropolitan areas throughout the United States.
Developers Diversified Realty Corporation, headquartered in Beachwood,
Ohio, is a self-managed real estate investment trust which acquires,
develops, redevelops, owns, leases, and manages shopping centers,
business centers and undeveloped land.
Duke-Weeks Realty Corporation, headquartered in Indianapolis, Indiana,
is a self-managed real estate investment trust that owns a portfolio of
rental properties, primarily industrial and office. The company also
provides related leasing and property management services.
EastGroup Properties, Inc., headquartered in Jackson, Mississippi, is a
self-managed real estate investment trust focused on the ownership,
acquisition and development of industrial properties in major Sunbelt
markets throughout the United States.
Equity Office Properties Trust, headquartered in Chicago, Illinois, is a
self-managed real estate investment trust engaged in acquiring, owning,
managing, leasing and renovating office properties and parking
facilities throughout the United States.
Equity Residential Properties Trust, headquartered in Chicago, Illinois,
is a self-managed real estate investment trust engaged in the
acquisition, disposition, ownership, management and operation of
multifamily properties.
First Industrial Realty Trust, Inc., headquartered in Chicago, Illinois,
is a self-managed real estate investment trust which owns, manages,
acquires and develops bulk warehouse and light industrial properties
located mainly in the midwestern United States.
General Growth Properties, Inc., headquartered in Chicago, Illinois, is
a self-managed real estate investment trust which owns, develops,
operates, leases and manages shopping centers throughout the United
States.
Glenborough Realty Trust Incorporated, headquartered in San Mateo,
California, is a self-managed real estate investment trust with a
portfolio of properties including office, office/flex, industrial, multi-
family, retail and hotel properties located throughout the United States.
Healthcare Realty Trust, Inc., headquartered in Nashville, Tennessee, is
a self-managed real estate investment trust that integrates owning,
managing and developing income-producing real estate properties related
to health services throughout the United States.
Hospitality Properties Trust, headquartered in Newton, Massachusetts, is
a self-managed real estate investment trust formed to buy, own and lease
hotels to unaffiliated hotel operators.
Host Marriott Corporation, headquartered in Bethesda, Maryland, is a
self-managed real estate investment trust which owns upscale and luxury
full-service hotel properties mainly operated under the "Marriott,"
"Four Seasons," "Hyatt," "Ritz-Carlton" and "Swissotel" brand names.
Kimco Realty Corporation, headquartered in New Hyde Park, New York, is a
self-managed real estate investment trust that owns and operates
neighborhood and community shopping centers in 41 states.
Liberty Property Trust, headquartered in Malvern, Pennsylvania, is a
self-managed real estate investment trust providing leasing,
acquisition, development, property management and other related services
for industrial and office properties located in the southeastern, mid-
Atlantic and midwestern regions of the United States.
The Mills Corporation, headquartered in Arlington, Virginia, is a self-
managed real estate investment trust that owns, develops, leases and
manages a portfolio of market dominant retail and entertainment
destinations.
Pan Pacific Retail Properties, Inc., headquartered in Vista, California,
is a self-managed real estate investment trust which owns, manages,
leases, acquires and develops shopping centers located primarily in the
western United States.
ProLogis Trust, headquartered in Aurora, Colorado, is a self-managed
real estate investment trust which acquires, develops, markets, leases,
operates and manages distribution, light manufacturing and temperature-
controlled facilities located primarily in full-service, master-planned
business parks.
Page 20
Reckson Associates Realty Corporation, headquartered in Melville, New
York, is a self-managed real estate investment trust which owns and
manages Class A suburban office and industrial properties in the New
York tri-state area.
Summit Properties Inc., headquartered in Charlotte, North Carolina, is a
self-managed real estate investment trust engaged in the development,
acquisition and management of luxury apartment communities.
Equity Securities Selected for Technology Select Portfolio, Series 14 and
Technology Portfolio, Series 14
Both the Technology Select Portfolio, Series 14 and the Technology
Portfolio, Series 14 contain common stocks of the following companies:
Communications Equipment
________________________
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets a broad range of products and services that
enable its customers to construct and upgrade their telecommunications
networks to support increasing user demand for voice, data and video
services.
Corning Incorporated, headquartered in Corning, New York, with
subsidiaries, manufactures and sells optical fiber, cable, hardware and
components for the global telecommunications industry; ceramic emission
control substrates used in pollution-control devices; and plastic and
glass laboratory products. The company also produces high-performance
displays and components for television and other communications-related
industries.
JDS Uniphase Corporation, headquartered in San Jose, California,
designs, develops, makes and markets laser subsystems, laser-based
semiconductor wafer defect examination and analysis equipment and fiber
optic telecommunications equipment products.
Nokia Oy (ADR), headquartered in Espoo, Finland, supplies
telecommunications systems and equipment, including mobile phones,
battery chargers for mobile phones, computer monitors, multimedia
network terminals and satellite receivers. The company provides its
products and services worldwide.
Nortel Networks Corporation, headquartered in Brampton, Ontario, Canada,
makes fully-digital telecommunications switching equipment and
communications equipment and systems for business and residential use.
The company operates worldwide.
QUALCOMM Incorporated, headquartered in San Diego, California, designs,
develops, makes, sells, licenses and operates advanced communications
systems and products based on proprietary digital wireless technology.
The company's products include "CDMA" integrated circuits, wireless
phones and infrastructure products, transportation management
information systems and ground stations, and phones for the low-earth-
orbit satellite communications system.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
voice, data and video transport and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Computers & Peripherals
_______________________
Brocade Communications Systems, Inc., headquartered in San Jose,
California, supplies Fibre Channel switching solutions for storage area
networks (SANs). The company's products are connected to computers and
storage devices, such as disk drives and tape drives, that computers use
to save information.
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
manufactures, markets and supports hardware, software and service
products for the enterprise storage market. The company's products are
sold as integrated storage solutions for customers on various computing
platforms including "UNIX" and "Windows NT."
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.
Solectron Corporation, headquartered in Milpitas, California, provides a
complete range of advanced manufacturing services, including
sophisticated electronic assembly and turnkey manufacturing management
services, to original equipment manufacturers in the electronics industry.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products, including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support, using the UNIX operating system.
Page 21
Computer Software & Services
____________________________
BMC Software, Inc., headquartered in Houston, Texas, provides high-
performance systems management software products for mainframe and
client/server based information systems. The company also sells and
provides maintenance enhancement and support services for its products.
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")
i2 Technologies, Inc., headquartered in Dallas, Texas, provides supply
chain management software, which encompasses the planning and scheduling
of manufacturing and related logistics from raw materials procurement
through work-in-process to customer delivery. The company's product,
"RHYTHM," generates integrated solutions to planning and scheduling
problems.
Microsoft Corporation, headquartered in Redmond, Washington, develops,
manufactures, licenses and supports a wide range of software products.
The company offers operating system software, server application
software, business and consumer applications software, software
development tools and Internet and intranet software. "Windows" is the
company's flagship PC operating system. The company also develops the
MSN network of Internet products and services.
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.
Siebel Systems, Inc., headquartered in San Mateo, California, designs,
sells and supports enterprise-class sales and marketing information
software systems. The company also designs, develops and markets a Web-
based application software product.
VERITAS Software Corporation, headquartered in Mountain View,
California, designs, develops, markets and supports enterprise data
storage management and high availability products for open system
environments.
Networking Products
___________________
Cisco Systems, Inc., headquartered in San Jose, California, provides
networking solutions that connect computing devices and computer
networks. The company offers various products to utilities,
corporations, universities, governments and small to medium businesses
worldwide.
Juniper Networks, Inc., headquartered in Mountain View, California,
provides Internet infrastructure solutions for Internet service
providers and other telecommunications service providers. The company
delivers next generation Internet backbone routers that are designed for
service provider networks.
Semiconductor Equipment
_______________________
Applied Materials, Inc., headquartered in Santa Clara, California,
develops, makes, sells and services semiconductor wafer fabrication
equipment and related spare parts for the worldwide semiconductor
industry.
Novellus Systems, Inc., headquartered in San Jose, California, designs,
makes, sells and services chemical vapor deposition equipment used in
the fabrication of integrated circuits. The company sells its products
to semiconductor manufacturers worldwide.
Semiconductors
______________
Altera Corporation, headquartered in San Jose, California, designs,
manufactures and markets programmable logic devices and associated
development tools to the telecommunications, data communications and
industrial applications markets.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Principal components
consist of silicon-based semiconductors etched with complex patterns of
transistors.
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.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broadband communications infrastructures, high-
bandwidth networks and multimedia personal computers.
STMicroelectronics N.V., headquartered in St. Genis Pouilly, France,
designs, develops, makes and markets a broad range of semiconductor
integrated circuits and discrete devices used in a variety of
microelectronic applications, including telecommunications and computer
systems, consumer products, automotive products and industrial
automation and control systems.
Page 22
Vitesse Semiconductor Corporation, headquartered in Camarillo,
California, designs, develops, makes and sells digital gallium arsenide
integrated circuits primarily for telecommunications, data
communications and automated test equipment systems providers.
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 23
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 500, 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 500, 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 January 17, 2001.
FT 500
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 ) January 17, 2001
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 January 17, 2001 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-53412) and related Prospectus of FT 500.
ERNST & YOUNG LLP
Chicago, Illinois
January 17, 2001
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 500 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. 33-48055] 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
