Registration No. 333-73343
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 334
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 May 28, 1999 at 2:00 p.m. pursuant to Rule
487.
________________________________
The Dow (sm) Target 5 Portfolio, June 1999 Series
The Dow (sm) Target 10 Portfolio, June 1999 Series
Target 25 Portfolio, June 1999 Series
Target Small-Cap Portfolio, June 1999 Series
Global Target 15 Portfolio, June 1999 Series
European Target 20 Portfolio, June 1999 Series
The S&P Target 10 Portfolio, June 1999 Series
The Nasdaq Target 15 Portfolio, June 1999 Series
FT 334
FT 334 consists of eight separate unit investment trusts each of which
is listed above (each, a "Trust," and collectively, the "Trusts"). Each
Trust contains a portfolio of common stocks ("Securities") selected by
applying a specialized strategy. The objective of each Trust is to
provide an above-average total return.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is May 28, 1999
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 5
Report of Independent Auditors 7
Statements of Net Assets 8
Schedules of Investments 10
The FT Series 18
Portfolios 19
Risk Factors 21
Hypothetical Performance Information 23
Public Offering 27
Distribution of Units 29
The Sponsor's Profits 30
The Secondary Market 30
How We Purchase Units 30
Expenses and Charges 31
Tax Status 31
Retirement Plans 34
Rights of Unit Holders 34
Income and Capital Distributions 35
Redeeming Your Units 36
Reinvesting in a New Trust 37
Removing Securities from a Trust 37
Amending or Terminating the Indenture 38
Information on the Sponsor, Trustee and Evaluator 39
Other Information 40
Page 2
Summary of Essential Information
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
The Dow (sm) The Dow (sm)
Target 5 Target 10 Target 25 Target Small-Cap
Portfolio Portfolio Portfolio Portfolio, June
June 1999 Series June 1999 Series June 1999 Series 1999 Series
________________ ________________ ________________ ________________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 15,003 14,990 15,000 15,007
Fractional Undivided Interest in the Trust per Unit (1) 1/15,003 1/14,990 1/15,000 1/15,007
Public Offering Price:
Aggregate Offering Price Evaluation of Securities
per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 2.75% of the Public Offering
Price per Unit (2.778% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .275 $ .275 $ .275 $ .275
Less Deferred Sales Charge per Unit $ (.175) $ (.175) $ (.175) $ (.175)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.725 $ 9.725 $ 9.725 $ 9.725
Redemption Price per Unit (based on aggregate
underlying value of Securities less the
deferred sales charge) (5) $ 9.725 $ 9.725 $ 9.725 $ 9.725
Estimated Net Annual Distributions per Unit (6) $ .2534 $ .2491 $ .2497 $ N.A.
Cash CUSIP Number 30264W 149 30264W 164 30264W 180 30264W 206
Reinvestment CUSIP Number 30264W 156 30264W 172 30264W 198 30264W 214
Security Code 56896 56898 56900 56902
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date June 3, 1999
Rollover Notification Date June 1, 2000
Special Redemption and Liquidation Period June 15, 2000 to June 30, 2000
Mandatory Termination Date (7) June 30, 2000
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 1999.
Income Distribution Date (6) Last day of June and December, commencing December 31, 1999.
______________
<FN>
See "Notes to Summary of Essential Information" on page 4.
</FN>
</TABLE>
Page 3
Summary of Essential Information
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Global Target 15 European Target The S&P Target The Nasdaq Target
Portfolio, June 20 Portfolio 10 Portfolio 15 Portfolio
1999 Series June 1999 Series June 1999 Series June 1999 Series
________________ ________________ ________________ ________________
<S> <C> <C> <C> <C>
Initial Number of Units (1) 14,982 15,003 14,991 15,012
Fractional Undivided Interest in the Trust per Unit (1) 1/14,982 1/15,003 1/14,991 1/15,012
Public Offering Price:
Aggregate Offering Price Evaluation of Securities
per Unit (2) $ 9.900 $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 2.75% of the Public Offering
Price per Unit (2.778% of the net amount invested,
exclusive of the deferred sales charge) (3) $ .275 $ .275 $ .275 $ .275
Less Deferred Sales Charge per Unit $ (.175) $ (.175) $ (.175) $ (.175)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.725 $ 9.725 $ 9.725 $ 9.725
Redemption Price per Unit (based on aggregate underlying
underlying value of Securities less the
deferred sales charge) (5) $ 9.725 $ 9.725 $ 9.725 $ 9.725
Estimated Net Annual Distributions per Unit (6) $ .3552 $ .3168 $ N.A. $ N.A.
Cash CUSIP Number 30264W 222 30264W 248 30264W 263 30264W 289
Reinvestment CUSIP Number 30264W 230 30264W 255 30264W 271 30264W 297
Security Code 56904 56906 56908 56910
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date June 3, 1999
Rollover Notification Date June 1, 2000
Special Redemption and Liquidation Period June 15, 2000 to June 30, 2000
Mandatory Termination Date (7) June 30, 2000
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 1999.
Income Distribution Date (6) Last day of June and December, commencing December 31, 1999.
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on June 1, 1999, 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, with the exception of the Securities in The
Dow (sm) Target 10 Portfolio, is valued at its last closing sale price
on the relevant stock exchange on the business day prior to the Initial
Date of Deposit. The Securities in The Dow (sm) Target 10 Portfolio are
valued at the opening sale prices on the New York Stock Exchange on the
Initial Date of Deposit. If a Security is not listed,
or if no closing sale price exists, it is valued at its closing ask
price on such date. The U.S. dollar value of foreign Securities trading
in non-U.S. currencies is determined by converting the value of the
foreign Securities to their U.S. dollar equivalent based on the offering
side of the currency exchange rate for the currency in which a Security
is generally denominated at the Evaluation Time on the business day
prior to the Initial Date of Deposit. Evaluations for purposes of
determining the purchase, sale or redemption price of Units are made as
of the close of trading on the New York Stock Exchange (generally 4:00
p.m. Eastern time) on each day on which it is open (the "Evaluation
Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit or, in
the case of The Dow (sm) Target 10 Portfolio, the Public Offering Price
reflects the value of the Securities on the Initial Date of Deposit. No
investor will purchase Units at this price. Additional Units may be
created during the day of the Initial Date of Deposit which, along with
the Units described above, will be valued as of the Evaluation Time on
the Initial Date of Deposit and sold to investors at the Public Offering
Price per Unit based on this valuation. On the Initial Date of Deposit
the Public Offering Price per Unit will not include any accumulated
dividends on the Securities. After the Initial Date of Deposit, the
Public Offering Price per Unit will include a pro rata share of any
accumulated dividends on the Securities.
(5) During the initial offering period the Sponsor's Initial Repurchase
Price per Unit and Redemption Price per Unit will include the estimated
organization costs per Unit set forth under "Fee Table." After the
initial offering period, the Sponsor's Initial Repurchase Price per Unit
and Redemption Price per Unit will not include such estimated
organization costs. See "Redeeming Your Units."
(6) The actual net annual distributions per Unit you receive will vary
from that set forth above with changes in a Trust's fees and expenses,
dividends received, currency exchange rates, foreign withholding and
with the sale of Securities. See "Fee Table" and "Expenses and Charges."
Dividend yield was not a selection criteria for the Target Small-Cap
Portfolio, The S&P Target 10 Portfolio or The Nasdaq Target 15
Portfolio. At the Rollover Notification Date for Rollover Unit holders
or upon termination of a Trust for other Unit holders, amounts in the
Income Account (which consist of dividends on the Securities) will be
included in amounts distributed to Unit holders. We will distribute
money from the Capital Account monthly on the last day of each month to
Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $1.00 per 100 Units. In any
case, we will distribute any funds in the Capital Account as part of the
final liquidation distribution.
(7) See "Amending or Terminating the Indenture."
</FN>
</TABLE>
Page 4
Fee Table
This Fee Table describes the fees and expenses that you may pay if you
buy and hold Units of a Trust. See "Public Offering" and "Expenses and
Charges." Although the Trusts have a term of approximately 13 months and
are unit investment trusts rather than mutual funds, this information
allows you to compare fees, assuming that when each Trust terminates,
the principal amount and distributions are rolled over into a New Trust,
and you pay only the deferred sales charge.
<TABLE>
<CAPTION>
THE DOW (SM) THE DOW (SM)
TARGET 5 PORTFOLIO TARGET 10 PORTFOLIO TARGET 25 PORTFOLIO
JUNE 1999 SERIES JUNE 1999 SERIES JUNE 1999 SERIES
___________________ ____________________ ___________________
<S> <C> <C> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 1.75%(b) .175 1.75%(b) .175 1.75%(b) .175
______ ______ ______ ______ ______ ______
Maximum sales charge 2.75% $ .275 2.75% $ .275 2.75% $ .275
====== ====== ====== ====== ====== ======
Maximum sales charge imposed on reinvested dividends 1.75%(c) $ .175 1.75%(c) $ .175 1.75%(c) $ .175
====== ====== ====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .130%(d) $.0130 .140%(d) $.0140 .225%(d) $.0225
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .050% $.0050 .050% $.0050 .060% $.0060
Trustee's fee and other operating expenses .094%(e) .0094 .094%(e) .0094 .082% .0082
______ ______ ______ ______ ______ ______
Total .144% $.0144 .144% $.0144 .142% $.0142
====== ====== ====== ====== ====== ======
TARGET SMALL-CAP GLOBAL TARGET 15 EUROPEAN TARGET
PORTFOLIO PORTFOLIO 20 PORTFOLIO
JUNE 1999 SERIES JUNE 1999 SERIES JUNE 1999 SERIES
_________________ ____________________ _________________
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 1.75%(b) .175 1.75%(b) .175 1.75%(b) .175
______ ______ ______ ______ ______ ______
Maximum sales charge 2.75% $ .275 2.75% $ .275 2.75% $ .275
====== ====== ====== ====== ====== ======
Maximum sales charge imposed on reinvested dividends 1.75%(c) $ .175 1.75%(c) $ .175 1.75%(c) $ .175
====== ====== ====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(d) $.0225 .150%(d) $.0150 .180%(d) $.0180
====== ====== ====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .082% .0082 .172% .0171 .203% .0202
______ ______ ______ ______ ______ ______
Total .142% $.0142 .232% $.0231 .263% $.0262
====== ====== ====== ====== ====== ======
</TABLE>
Page 5
<TABLE>
<CAPTION>
THE S&P TARGET THE NASDAQ
10 PORTFOLIO TARGET 15 PORTFOLIO
JUNE 1999 SERIES JUNE 1999 SERIES
_________________ ___________________
<S> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.00%(a) $ .100 1.00%(a) $ .100
Deferred sales charge 1.75%(b) .175 1.75%(b) .175
______ ______ ______ ______
Maximum sales charge 2.75 % $ .275 2.75% $ .275
====== ====== ====== ======
Maximum sales charge imposed on reinvested dividends 1.75%(c) $ .175 1.75%(c) $ .175
====== ====== ====== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .170%(d) $.0170 .170%(d) $.0170
====== ====== ====== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .060% $.0060 .060% $.0060
Trustee's fee and other operating expenses .128%(e) .0128 .098%(e) .0098
______ ______ ______ ______
Total .188% $.0188 .158% $.0158
====== ====== ====== ======
</TABLE>
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 all your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
The Dow (sm) Target 5 Portfolio, June 1999 Series $302 $721 $1,166 $2,397
The Dow (sm) Target 10 Portfolio, June 1999 Series 303 724 1,171 2,407
Target 25 Portfolio, June 1999 Series 312 749 1,212 2,492
Target Small-Cap Portfolio, June 1999 Series 312 749 1,212 2,492
Global Target 15 Portfolio, June 1999 Series 313 753 1,220 2,507
European Target 20 Portfolio, June 1999 Series 319 772 1,251 2,570
The S&P Target 10 Portfolio, June 1999 Series 311 747 1,208 2,483
The Nasdaq Target 15 Portfolio, June 1999 Series 308 738 1,193 2,453
The example will not differ if you hold rather than sell your Units at
the end of each period. The example does not reflect sales charges on
reinvested dividends and other distributions. If these sales charges
were included, your costs would be higher.
________________
<FN>
(a) The amount of the initial sales charge will vary depending on the
purchase price of your Units. The amount of the initial sales charge is
actually the difference between the maximum sales charge (2.75% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.175 per Unit). When the Public Offering Price exceeds
$10.00 per Unit the initial sales charge will exceed 1.00% of the Public
Offering Price per Unit.
(b) The deferred sales charge is a fixed dollar amount equal to $.175
per Unit which will be deducted in ten monthly installments of $.0175
per Unit beginning July 20, 1999 and on the 20th day of each month
thereafter (or the preceding business day if the 20th day is not a
business day) through April 20, 2000. 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 1.75% of the Public Offering Price. If you
purchase Units after the first deferred sales charge payment has been
deducted, your purchase price will include both the initial sales charge
and any remaining deferred sales charge payments.
(c) Reinvested dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "Income and Capital
Distributions."
(d) You will bear all or a portion of the costs incurred in organizing
your respective Trust. These estimated organization costs are included
in the price you pay for your Units and will be deducted from the assets
of a Trust at the end of the initial offering period.
(e) Includes estimated per Unit costs associated with a license fee as
described in "Expenses and Charges."
</FN>
</TABLE>
Page 6
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 334
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 334, comprised of The Dow (sm) Target 5
Portfolio, June 1999 Series; The Dow (sm) Target 10 Portfolio, June 1999
Series; Target 25 Portfolio, June 1999 Series; Target Small-Cap
Portfolio, June 1999 Series; Global Target 15 Portfolio, June 1999
Series; European Target 20 Portfolio, June 1999 Series; The S&P Target
10 Portfolio, June 1999 Series and The Nasdaq Target 15 Portfolio, June
1999 Series as of the opening of business on May 28, 1999. 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 generally accepted auditing
standards. 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 May 28, 1999. 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 334,
comprised of The Dow (sm) Target 5 Portfolio, June 1999 Series; The Dow
(sm) Target 10 Portfolio, June 1999 Series; Target 25 Portfolio, June
1999 Series; Target Small-Cap Portfolio, June 1999 Series; Global Target
15 Portfolio, June 1999 Series; European Target 20 Portfolio, June 1999
Series; The S&P Target 10 Portfolio, June 1999 Series and The Nasdaq
Target 15 Portfolio, June 1999 Series, at the opening of business on May
28, 1999 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 28, 1999
Page 7
Statements of Net Assets
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
The Dow (sm) The Dow (sm) Target Small-Cap
Target 5 Portfolio Target 10 Portfolio Target 25 Portfolio Portfolio, June
June 1999 Series June 1999 Series June 1999 Series 1999 Series
__________________ ___________________ ___________________ ______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,528 $148,407 $148,502 $148,572
Less liability for reimbursement to Sponsor
for organization costs (3) (195) (210) (338) (338)
Less liability for deferred sales charge (4) (2,626) (2,623) (2,625) (2,626)
________ ________ ________ ________
Net assets $145,707 $145,574 $145,539 $145,608
======== ======== ======== ========
Units outstanding 15,003 14,990 15,000 15,007
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,028 $149,906 $150,002 $150,073
Less maximum sales charge (5) (4,126) (4,122) (4,125) (4,127)
Less estimated reimbursement to Sponsor
for organization costs (3) (195) (210) (338) (338)
________ ________ ________ ________
Net assets $145,707 $145,574 $145,539 $145,608
======== ======== ======== ========
__________
<FN>
See "Notes to Statements of Net Assets" on page 9.
</FN>
</TABLE>
Page 8
Statements of Net Assets
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
The Nasdaq
Global Target 15 European Target 20 The S&P Target 10 Target 15
Portfolio, June Portfolio, June Portfolio, June Portfolio, June
1999 Series 1999 Series 1999 Series 1999 Series
________________ __________________ _________________ ______________
<S> <C> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,322 $148,529 $148,413 $148,622
Less liability for reimbursement to Sponsor
for organization costs (3) (225) (270) (255) (255)
Less liability for deferred sales charge (4) (2,622) (2,626) (2,623) (2,627)
________ ________ ________ ________
Net assets $145,475 $145,633 $145,535 $145,740
======== ======== ======== ========
Units outstanding 14,982 15,003 14,991 15,012
ANALYSIS OF NET ASSETS
Cost to investors (5) $149,820 $150,029 $149,913 $150,123
Less maximum sales charge (5) (4,120) (4,126) (4,123) (4,128)
Less estimated reimbursement to Sponsor
for organization costs (3) (225) (270) (255) (255)
________ ________ ________ ________
Net assets $145,475 $145,633 $145,535 $145,740
======== ======== ======== ========
______________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $1,600,000 will be allocated among each of the eight Trusts in
FT 334, 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 $.0130,
$.0140, $.0225, $.0225, $.0150, $.0180, $.0170 and $.0170 per Unit for
The Dow (sm) Target 5 Portfolio, The Dow (sm) Target 10 Portfolio, Target 25
Portfolio, Target Small-Cap Portfolio, Global Target 15 Portfolio,
European Target 20 Portfolio, The S&P Target 10 Portfolio and The Nasdaq
Target 15 Portfolio, respectively. A payment will be made at the end of
the initial offering period to an account maintained by the Trustee from
which the obligation of the investors to the Sponsor will be satisfied.
To the extent that actual organization costs of a Trust are greater than
the estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.175 per Unit), payable to us in ten equal
monthly installments beginning on July 20, 1999 and on the twentieth day
of each month thereafter (or if such date is not a business day, on the
preceding business day) through April 20, 2000. If you redeem Units
before April 20, 2000 you will have to pay the remaining amount of the
deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors in a Trust includes a maximum sales
charge (comprised of an initial and a deferred sales charge) computed at
the rate of 2.75% of the Public Offering Price (equivalent to 2.778% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge as set forth under "Public
Offering."
</FN>
</TABLE>
Page 9
Schedule of Investments
The Dow (sm) Target 5 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Name of Offering Value per Securities to Dividend
Shares Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ __________________________ ____________ _________ _____________ _________
<C> <S> <C> <C> <C> <C>
536 CAT Caterpillar Inc. 20% $55.375 $ 29,681 2.17%
456 DD E.I. du Pont de Nemours & Company 20% 65.125 29,697 2.15%
432 EK Eastman Kodak Company 20% 68.813 29,727 2.56%
518 GT Goodyear Tire & Rubber Company 20% 57.375 29,720 2.09%
769 MO Philip Morris Companies, Inc. 20% 38.625 29,703 4.56%
____ _________
Total Investments 100% $148,528
==== =========
_____________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 10
Schedule of Investments
The Dow (sm) Target 10 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Name of Offering Value per Securities to Dividend
Shares Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________ ____________ _________ ___________ _________
<C> <S> <C> <C> <C> <C>
268 CAT Caterpillar Inc. 10% $ 55.313 $ 14,824 2.17%
160 CHV Chevron Corporation 10% 92.750 14,840 2.63%
228 DD E.I. du Pont de Nemours & Company 10% 65.438 14,920 2.14%
216 EK Eastman Kodak Company 10% 68.375 14,769 2.57%
189 XON Exxon Corporation 10% 78.875 14,908 2.08%
209 GM General Motors Corporation 10% 71.000 14,839 2.82%
259 GT Goodyear Tire & Rubber Company 10% 57.375 14,860 2.09%
173 MMM Minnesota Mining & Manufacturing 10% 85.250 14,748 2.63%
110 JPM J.P. Morgan & Company, Inc. 10% 135.375 14,891 2.93%
384 MO Philip Morris Companies, Inc. 10% 38.563 14,808 4.56%
_____ ________
Total Investments 100% $148,407
===== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 11
Schedule of Investments
Target 25 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Ticker Symbol and Offering Value per Securities to Dividend
Shares Name and Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ _______ ___________ _________
<C> <S> <C> <C> <C> <C>
211 AM American Greetings Corporation (Class A) 4% $ 28.125 $ 5,934 2.70%
147 ASH Ashland Inc. 4% 40.313 5,926 2.73%
226 CAG ConAgra, Inc. 4% 26.250 5,932 2.72%
213 COC Conoco Inc. (Class A) 4% 27.875 5,937 2.73%
119 CBE Cooper Industries, Inc. 4% 50.063 5,957 2.64%
49 DOW Dow Chemical Company 4% 121.625 5,960 2.86%
246 GY GenCorp Inc. 4% 24.125 5,935 2.49%
147 GR B.F. Goodrich Company 4% 40.375 5,935 2.72%
159 HRS Harris Corporation 4% 37.313 5,933 2.57%
183 HSC Harsco Corporation 4% 32.375 5,925 2.78%
172 K Kellogg Company 4% 34.625 5,956 2.71%
292 LPX Louisiana-Pacific Corporation 4% 20.313 5,931 2.76%
98 PPG PPG Industries, Inc. 4% 60.688 5,947 2.50%
115 P Phillips Petroleum Company 4% 51.813 5,958 2.62%
126 RYN Rayonier Inc. 4% 47.250 5,954 2.62%
110 RLM Reynolds Metals Company 4% 54.125 5,954 2.59%
246 R Ryder System, Inc. 4% 24.188 5,950 2.48%
164 SNA Snap-on Incorporated 4% 36.125 5,924 2.44%
187 SWK Stanley Works 4% 31.688 5,926 2.71%
126 TRW TRW Inc. 4% 47.000 5,922 2.81%
94 TX Texaco Inc. 4% 62.875 5,910 2.86%
141 TNB Thomas & Betts Corporation 4% 42.250 5,957 2.65%
253 TNO True North Communications Inc. 4% 23.500 5,946 2.55%
201 MRO USX-Marathon Group 4% 29.625 5,955 2.84%
95 WY Weyerhaeuser Company 4% 62.500 5,938 2.56%
_______ ________
Total Investments 100% $148,502
======= ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 12
Schedule of Investments
Target Small-Cap Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Number Percentage Market Cost of
of Ticker Symbol and of Aggregate Value per Securities to
Shares Name of Issuer of Securities (1) Offering Price Share the Trust (2)
______ ________________________________ ______________ _______ ____________
<C> <S> <C> <C> <C>
60 ABDR Abacus Direct Corporation 2.97% $73.625 $ 4,418
208 ALSI Advantage Learning Systems, Inc. 3.15% 22.500 4,680
178 AFWY American Freightways Corporation 2.10% 17.500 3,115
146 AMES Ames Department Stores, Inc. 3.93% 39.969 5,835
106 ARDT Ardent Software, Inc. 1.46% 20.438 2,166
77 EWB E.W. Blanch Holdings, Inc. 3.27% 63.000 4,851
89 CNMD CONMED Corporation 2.00% 33.375 2,970
80 CTS CTS Corporation 3.04% 56.500 4,520
197 DIIG DII Group, Inc. 4.11% 31.000 6,107
140 DNEX Dionex Corporation 3.93% 41.750 5,845
77 ELK Elcor Corporation 2.12% 40.875 3,147
227 FM Foodmaker, Inc. 4.09% 26.750 6,072
163 GVA Granite Construction Incorporated 3.12% 28.438 4,635
167 HH Hooper Holmes, Inc. 2.02% 18.000 3,006
120 IDPH IDEC Pharmaceuticals Corporation 4.08% 50.500 6,060
174 INTV InterVoice, Inc. 1.25% 10.688 1,860
74 KRON Kronos Incorporated 1.86% 37.375 2,766
171 LRW Labor Ready, Inc. 4.07% 35.313 6,039
96 MBRS MemberWorks Incorporated 2.60% 40.250 3,864
204 METHA Methode Electronics, Inc. (Class A) 2.52% 18.375 3,749
101 MTNT Metro Networks, Inc. 3.81% 56.000 5,656
82 MUSE Micromuse Inc. 2.29% 41.500 3,403
74 MNC Monaco Coach Corporation 1.49% 30.000 2,220
65 NVR NVR, Inc. 2.09% 47.813 3,108
81 SPWY Penske Motorsports, Inc. 2.65% 48.500 3,929
66 PERC Perclose, Inc. 1.82% 41.000 2,706
95 PVSW Pervasive Software Inc. 1.07% 16.750 1,591
65 PCLE Pinnacle Systems, Inc. 2.23% 51.000 3,315
95 PLA Playboy Enterprises, Inc. (Class B) 1.88% 29.375 2,791
92 PLXS Plexus Corporation 1.96% 31.594 2,907
176 PLCM Polycom, Inc. 2.96% 25.000 4,400
164 PRGX Profit Recovery Group International, Inc. (Class A) 4.08% 37.000 6,068
58 PSDI Project Software & Development, Inc. 1.13% 29.000 1,682
88 RESM ResMed Inc. 1.67% 28.250 2,486
126 SAWS Sawtek Inc. 3.35% 39.500 4,977
72 TAGS Tarrant Apparel Group 1.36% 28.125 2,025
59 TQNT TriQuint Semiconductor, Inc. 1.36% 34.125 2,013
186 UTR Unitrode Corporation 2.62% 20.938 3,894
106 URBN Urban Outfitters, Inc. 1.72% 24.125 2,557
44 ZOMX Zomax Incorporated 0.77% 25.875 1,139
_____ ________
Total Investments 100% $148,572
===== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 13
Schedule of Investments
Global Target 15 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Current
of Offering Value per Securities to Dividend
Shares Name of Issuer of Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________ ___________ ________ _____________ ________
<C> <S> <C> <C> <C> <C>
DJIA COMPANIES:
_______________
179 Caterpillar Inc. 6.68% $55.375 $ 9,912 2.17%
152 E.I. du Pont de Nemours & Company 6.67% 65.125 9,899 2.15%
144 Eastman Kodak Company 6.68% 68.813 9,909 2.56%
173 Goodyear Tire & Rubber Company 6.69% 57.375 9,926 2.09%
256 Philip Morris Companies, Inc. 6.67% 38.625 9,888 4.56%
FT INDEX COMPANIES:
___________________
1,569 Blue Circle Industries Plc 6.67% 6.308 9,897 4.14%
1,389 British Airways Plc 6.68% 7.127 9,899 4.46%
1,415 EMI Group Plc 6.67% 6.994 9,897 4.06%
1,571 Marks & Spencer Plc 6.67% 6.300 9,897 4.19%
1,468 Tate & Lyle Plc 6.68% 6.744 9,900 4.53%
HANG SENG INDEX COMPANIES:
_________________________
12,000 Amoy Properties Ltd. 6.78% 0.838 10,054 6.92%
6,000 Great Eagle Holdings Ltd. 6.54% 1.618 9,706 3.59%
14,000 Henderson Investment Ltd. 6.45% 0.683 9,565 4.15%
4,000 Hong Kong Telecommunications Ltd. 6.38% 2.365 9,461 4.64%
7,000 Hysan Development Co. Ltd. 7.09% 1.502 10,512 3.18%
_____ ________
Total Investments 100% $148,322
===== ========
_____________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 14
Schedule of Investments
European Target 20 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Number Percentage Market Cost of Current
of of Aggregate Value Securities to Dividend
Shares Name of Issuer of Securities (1) Offering Price per Share the Trust (2) Yield (3)
______ ________________________________ _____________ _______ ____________ ____________
<C> <S> <C> <C> <C> <C>
341 ABN AMRO Holding NV 5% $ 21.805 $ 7,435 2.76%
363 Abbey National Plc 5% 20.457 7,426 3.19%
183 BASF AG 5% 40.473 7,406 4.15%
187 Bayer AG 5% 39.636 7,412 3.57%
794 British American Tobacco Plc 5% 9.350 7,424 4.40%
513 CGU Plc 5% 14.468 7,422 4.15%
255 Commerzbank AG 5% 29.126 7,427 3.93%
84 DaimlerChrysler AG 5% 88.371 7,423 3.97%
708 Diageo Plc 5% 10.492 7,428 2.96%
1,189 ENI SpA 5% 6.243 7,423 2.60%
25 Electrabel SA 5% 300.146 7,504 4.38%
224 HSBC Holdings Plc 5% 33.120 7,419 3.17%
584 Halifax Plc 5% 12.712 7,424 2.94%
520 Iberdrola SA 5% 14.286 7,429 3.43%
1,179 Marks & Spencer Plc 5% 6.300 7,428 4.19%
332 National Westminster Bank Plc 5% 22.357 7,423 2.97%
409 Repsol SA 5% 18.134 7,417 2.54%
503 Rio Tinto Plc 5% 14.756 7,422 3.73%
131 Royal Dutch Petroleum Company 5% 56.578 7,412 2.68%
542 San Paolo-IMI SpA 5% 13.700 7,425 3.55%
____ ________
Total Investments 100% $148,529
==== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 15
Schedule of Investments
The S&P Target 10 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the
Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of
of Ticker Symbol and Offering Value per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ ___________ ________ _____________
<S> <C> <C> <C> <C>
262 AA Alcoa Inc. 10% $56.625 $ 14,836
263 EDS Electronic Data Systems Corporation 10% 56.438 14,843
275 FDX FDX Corporation 10% 53.938 14,833
185 MOT Motorola, Inc. 10% 80.063 14,812
307 PE PECO Energy Company 10% 48.313 14,832
289 SLR Solectron Corporation 10% 51.375 14,847
532 SPLS Staples, Inc. 10% 27.938 14,863
268 YUM Tricon Global Restaurants, Inc. 10% 55.375 14,841
361 WMT Wal-Mart Stores, Inc. 10% 41.125 14,846
629 WAG Walgreen Co. 10% 23.625 14,860
____ ________
Total Investments 100% $148,413
==== ========
___________
<FN>
See "Notes to Schedules of Investments" on page 17.
</FN>
</TABLE>
Page 16
Schedule of Investments
The Nasdaq Target 15 Portfolio, June 1999 Series
FT 334
At the Opening of Business on the Initial Date of Deposit-May 28, 1999
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Market
of Ticker Symbol and Offering Value per Securities to Capitalization
Shares Name of Issuer of Securities (1) Price Share the Trust (2) (in millions) (4)
______ ________________________________ ___________ ________ _____________ _________________
<C> <S> <C> <C> <C> <C>
56 ADBE Adobe Systems Incorporated 2.81% $ 74.500 $ 4,172 4,545
178 ALTR Altera Corporation 4.24% 35.438 6,308 7,026
463 AMGN Amgen Inc. 19.57% 62.813 29,082 32,160
128 AAPL Apple Computer, Inc. 3.75% 43.500 5,568 5,962
69 BGEN Biogen, Inc. 5.09% 109.563 7,560 8,212
45 CMGI CMGI Inc. 5.85% 193.375 8,702 9,027
34 CNET CNET, Inc. 2.29% 100.000 3,400 3,561
67 CNTO Centocor, Inc. 1.94% 43.063 2,885 3,053
66 CMVT Comverse Technology, Inc. 2.92% 65.750 4,340 4,585
52 EFII Electronics for Imaging, Inc. 1.70% 48.500 2,522 2,610
140 LLTC Linear Technology Corporation 5.09% 54.000 7,560 8,265
53 SANM Sanmina Corporation 2.67% 74.875 3,968 4,277
632 SUNW Sun Microsystems, Inc. 24.98% 58.750 37,130 45,464
362 TLAB Tellabs, Inc. 13.41% 55.063 19,933 21,559
125 XLNX Xilinx, Inc. 3.69% 43.938 5,492 6,352
______ ________
Total Investments 100% $148,622
====== ========
______________
<FN>
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. We entered into purchase
contracts for the Securities on May 28, 1999. Each Trust has a mandatory
termination date of June 30, 2000.
(2) The cost of the Securities to each Trust, with the exception of The
Dow (sm) Target 10 Portfolio, represents the aggregate
underlying value with respect to the Securities acquired-generally
determined by the closing sale prices of the Securities on the
applicable exchange (where applicable, converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the close
of business on May 27, 1999, the business day prior to the Initial Date
of Deposit. The cost of the Securities for The Dow (sm) Target 10 Portfolio
was determined by the opening sale prices of the Securities on the New York
Stock Exchange on May 28, 1999. The valuation of the Securities has been
determined by the Evaluator, an affiliate of ours. The cost of the Securities
to us and our profit or loss (which is the difference between the cost of the
Securities to us and the cost of the Securities to a Trust) are set
forth below:
Cost of
Securities Profit
to Sponsor (Loss)
__________ ______
The Dow (sm) Target 5 Portfolio, June 1999 Series $148,481 $ 47
The Dow (sm) Target 10 Portfolio, June 1999 Series 148,442 (35)
Target 25 Portfolio, June 1999 Series 148,933 (431)
Target Small-Cap Portfolio, June 1999 Series 149,209 (637)
Global Target 15 Portfolio, June 1999 Series 148,047 275
European Target 20 Portfolio, June 1999 Series 147,870 659
The S&P Target 10 Portfolio, June 1999 Series 149,145 (732)
The Nasdaq Target 15 Portfolio, June 1999 Series 150,149 (1,527)
(3) Current Dividend Yield for each Security, with the exception of the
Securities in The Dow(sm) Target 10 Portfolio, was calculated by dividing
the most recent annualized ordinary dividend paid on a Security by that
Security's closing sale price at the close of business on the business day
prior to the Initial Date of Deposit. The Current Dividend Yield for each
Security in The Dow(sm) Target 10 Portfolio was calculated by dividing the
most recent annualized ordinary dividend paid on a Security by that
Security's opening sale price on the New York Stock Exchange on May 28, 1999.
(4) Market capitalization is based on the market value as of the close
of business on May 27, 1999.
</FN>
</TABLE>
Page 17
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created several similar
yet separate investment companies which we have named the FT Series. We
designate each of these investment company series, the FT Series, with a
different series number.
YOU MAY GET MORE SPECIFIC DETAILS ON SOME OF THE INFORMATION IN THIS
PROSPECTUS IN AN "INFORMATION SUPPLEMENT" BY CALLING THE TRUSTEE AT 1-
800-682-7520.
What We Call the Trusts.
This FT Series consists of eight separate unit investment trusts known as:
- - The Dow (sm) Target 5 Portfolio
- - The Dow (sm) Target 10 Portfolio
- - Target 25 Portfolio
- - Target Small-Cap Portfolio
- - Global Target 15 Portfolio
- - European Target 20 Portfolio
- - The S&P Target 10 Portfolio
- - The Nasdaq Target 15 Portfolio
Trusts containing only domestic stocks may be called "Domestic Trusts"
and those which contain foreign stocks may be called "International
Trusts."
Mandatory Termination Date.
The Trusts will terminate on the Mandatory Termination Date,
approximately 13 months from the date of this prospectus. This date is
shown in "Summary of Essential Information." Each Trust was created
under the laws of the State of New York according to a Trust Agreement
(the "Indenture") dated the Initial Date of Deposit. This agreement,
entered into between 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.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited the Securities (fully
backed by an irrevocable letter of credit of a financial institution)
with the Trustee. In return for depositing the Securities, the Trustee
delivered documents to us representing our ownership of the Trusts, in
the form of units ("Units").
With the deposit of the contracts to buy the Securities on the Initial
Date of Deposit we established a percentage relationship among the
Securities in each Trust's portfolio, as stated under "Schedule of
Investments" for each Trust. After the Initial Date of Deposit, we may
deposit additional Securities in a Trust, or cash (including a letter of
credit) with instructions to buy more Securities, in order 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, and not the
percentage relationship existing on the day we are creating 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 underlying Securities will fluctuate daily, the
ratio of Securities in a Trust, on a market value basis, will also
change daily. The portion of Securities represented by each Unit will
not change as a result of the deposit of additional Securities or cash
in a Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trust will 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.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or our affiliate) to
act as agent for a Trust to buy Securities. If we or an affiliate of
ours act as agent to a Trust we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. The Trusts will not, however, sell Securities to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if the Securities no longer meet the
Page 18
criteria by which they were selected. You will not be able to dispose of
or vote any of the Securities in a Trust. As the holder of the
Securities, the Trustee will vote all of the Securities and will do so
based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract. The Trustee must purchase the Replacement Securities within 20
days after it receives notice of a failed contract, and the purchase
price may not be more than the amount of funds reserved for the purchase
of the failed contract.
Portfolios
Objectives
When you invest in a Trust you are purchasing a quality portfolio of
attractive common stocks in one convenient purchase. Certain of the
Trusts invest in stocks with high dividend yields. Investing in stocks
with high dividend yields may be effective in achieving a Trust's
investment objective. This is because regular dividends are common for
established companies, and dividends have historically accounted for a
large portion of the total return on stocks. Because the Trusts' lives
are short, we cannot guarantee that a Trust will achieve its objective
or that a Trust will make money once expenses are deducted.
Each Trust's investment objective is to provide an above-average total
return. Except for the Target Small-Cap Portfolio, The S&P Target 10
Portfolio and The Nasdaq Target 15 Portfolio, each Trust seeks to meet
its objective through a combination of capital appreciation and dividend
income. The Target Small-Cap Portfolio, The S&P Target 10 Portfolio and
The Nasdaq Target 15 Portfolio each seek to meet their objective through
capital appreciation. As discussed below, each Trust follows a different
investment strategy to meet its objective.
Portfolio Strategies
The Target 5 Portfolio Strategy.
Step 1: We rank all 30 stocks contained in the Dow Jones Industrial
Average ("DJIA") by dividend yield as of the business day prior to the
date of this prospectus.
Step 2: We then select the ten highest dividend-yielding stocks from this
group.
Step 3: From the ten stocks selected in Step 2, we select the five stocks
with the lowest per share stock price for The Target 5 Portfolio.
The Target 10 Portfolio Strategy.
Step 1: We rank all 30 stocks contained in the DJIA by dividend yield as
of the opening of business on the date of this prospectus.
Step 2: We then select the ten highest dividend-yielding stocks for The
Target 10 Portfolio.
The Target 25 Portfolio Strategy.
Step 1: We select all dividend-paying stocks listed on the New York
Stock Exchange ("NYSE") (excluding financial, transportation and utility
stocks, American Depositary Receipts, limited partnerships and any stock
included in the DJIA) as of two business days prior to the date of this
prospectus.
Step 2: We then rank the stocks from highest to lowest market
capitalization, and select the 400 highest market cap stocks.
Step 3: We rank the 400 stocks from highest to lowest dividend yield,
and select the 75 highest dividend-yielding stocks.
Step 4: We take the remaining 75 stocks, discard the 50 highest dividend-
yielding stocks, and select the remaining 25 stocks for the Target 25
Portfolio.
The Target Small-Cap Portfolio Strategy.
Step 1: We select the stocks of all U.S. corporations which trade on the
NYSE, the American Stock Exchange ("AMEX") or The Nasdaq Stock Market
("Nasdaq") (excluding limited partnerships, American Depositary Receipts
and mineral and oil royalty trusts) as of two business days prior to the
date of this prospectus.
Step 2: We then select companies which have a market capitalization of
between $150 million and $1 billion and whose stock has an average daily
Page 19
dollar trading volume of at least $500,000.
Step 3: We next select stocks with positive three-year sales growth.
Step 4: From there we select those stocks whose most recent annual
earnings are positive.
Step 5: We eliminate any stock whose price has appreciated by more than
75% in the last 12 months.
Step 6: We select the 40 stocks with the greatest price appreciation in
the last 12 months on a relative market capitalization basis (highest to
lowest) for the Target Small-Cap Portfolio.
For purposes of applying the Target Small-Cap Strategy, market
capitalization and average trading volume are based on 1996 dollars
which are periodically adjusted for inflation; and all steps apply
monthly and rolling quarterly data instead of annual figures where
possible.
The Global Target 15 Portfolio Strategy.
Step 1: We rank all stocks contained in the DJIA, the Financial Times
Industrial Ordinary Share Index ("FT Index") and the Hang Seng Index by
dividend yield as of the business day prior to the date of this
prospectus in the case of DJIA stocks or three business days prior to
the date of this prospectus in the case of FT Index or Hang Seng Index
stocks.
Step 2: We select the ten highest dividend-yielding stocks in each
respective index.
Step 3: We select the five stocks with the lowest per share stock price
of the ten highest-dividend yielding stocks in each respective index as
of their respective selection date for the Global Target 15 Portfolio.
Companies which, on or before their respective selection date, are
subject to any of the limited circumstances which warrant removal of a
Security from a Trust as described under "Removing Securities from a
Trust" have been excluded from the Global Target 15 Portfolio Strategy.
European Target 20 Portfolio Strategy.
Step 1: We rank the 120 largest companies based on market capitalization
which are headquartered in Austria, Belgium, Denmark, Finland, Germany,
Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland or the United Kingdom by dividend yield as of five
business days prior to the date of this prospectus.
Step 2: We select the 20 highest dividend-yielding stocks for the
European Target 20 Portfolio.
The S&P Target 10 Portfolio Strategy.
Step 1: We select the 250 largest companies based on market
capitalization which are components of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index") as of two business days
prior to the date of this prospectus.
Step 2: From the above list, the 125 companies with the lowest price to
sales ratios are selected.
Step 3: The 10 companies which had the greatest 1-year stock price
appreciation are selected for The S&P Target 10 Portfolio.
The Nasdaq Target 15 Portfolio Strategy.
Step 1: We select stocks which are components of the Nasdaq 100 Index as
of two business days prior to the date of this prospectus and
numerically rank them by 12-month price appreciation (best (1) to worst
(100)).
Step 2: We then numerically rank the stocks by six-month price
appreciation.
Step 3: The stocks are then numerically ranked by return on assets ratio.
Step 4: We then numerically rank the stocks by the ratio of cash flow
per share to stock price.
Step 5: We add up the numerical ranks achieved by each company in the
above steps and select the 15 stocks with the lowest sums for The Nasdaq
Target 15 Portfolio.
The stocks which comprise The Nasdaq Target 15 Portfolio are weighted by
market capitalization subject to the restriction that no stock will
comprise less than 1% or 25% or more of the portfolio on the date of
this prospectus. The Securities will be adjusted on a proportionate
basis to accommodate this constraint.
Companies which, based on publicly available information as of two
business days prior to the date of this prospectus, are the subject of
an announced business combination which we expect will happen within six
Page 20
months of date of this prospectus have been excluded from the Target 25
Strategy Portfolio, Target Small-Cap Strategy Portfolio and The Nasdaq
Target 15 Portfolio.
Please note that we applied each strategy at a particular time. If we
create additional Units of a Trust after the Initial Date of Deposit we
will deposit the Securities originally selected by applying the strategy
at such time. This is true even if a later application of a strategy
would have resulted in the selection of different Securities.
"Dow Jones Industrial Average (sm)" "Dow" and "DJIA (sm)" are service
marks of Dow Jones & Company, Inc. ("Dow Jones") and have been licensed
for use for certain purposes by First Trust Advisors L.P., an affiliate
of ours. Dow Jones does not endorse, sell or promote any of the Trusts,
in particular, The Dow (sm) Target 5 Trust and The Dow (sm) Target 10
Trust. Dow Jones makes no representation regarding the advisability of
investing in such products.
"S&P," "S&P 500," and "Standard & Poor's" are trademarks of The McGraw-
Hill Companies, Inc. and have been licensed for use by us. The S&P
Target 10 Portfolio is not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in such Trust. Please see the
Information Supplement which sets forth certain additional disclaimers
and limitations of liabilities on behalf of Standard & Poor's.
The "Nasdaq 100(registered trademark)," "Nasdaq 100 Index(registered
trademark)," and "Nasdaq(registered trademark)" are trade or service
marks of The Nasdaq Stock Market, Inc. (which with its affiliates are
the "Corporations") and are licensed for use by us. The Nasdaq Target 15
Portfolio has not been passed on by the Corporations as to its legality
or suitability. The Nasdaq Target 15 Portfolio is not issued, endorsed,
sold, or promoted by the Corporations. The Corporations make no
warranties and bear no liability with respect to The Nasdaq Target 15
Portfolio.
Dow Jones, Standard & Poor's and The Nasdaq Stock Market, Inc., as well
as the publishers of the Ibbotson Small-Cap Index, MSCI Europe Index, FT
Index and Hang Seng Index, are not affiliated with us and have not
participated in creating the Trusts or selecting the Securities for the
Trusts. Except as noted above, none of the index publishers have given
us a license to use their index nor have they approved of any of the
information in this prospectus.
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.
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 or
that you won't lose money. Units of the Trusts are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Trusts which use dividend yield as a selection criteria employ a
contrarian strategy in which the Securities selected share qualities
that have caused them to have lower share prices or higher dividend
yields than other common stocks in their peer group. There is no
assurance that negative factors affecting the share price or dividend
yield of these Securities will be overcome over the life of the Trusts
or that they will increase in value.
Certain Trusts (particularly the Target Small-Cap Portfolio) are
concentrated in Securities issued by companies with market
capitalizations of less than $1 billion. The share prices of these small-
cap companies are often more volatile than those of larger companies.
This is a result of several factors common to many such issuers,
including limited trading volumes, products or financial resources,
management inexperience and less publicly available information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Financial Institutions Industry. The European Target 20 Portfolio is
concentrated in financial institutions stocks. Such institutions are
especially subject to the adverse effects of economic recession;
volatile interest rates; portfolio concentrations in geographic markets
Page 21
and in commercial and residential real estate loans; and competition
from new entrants in their fields of business. In addition, financial
institutions are extensively regulated and may be adversely affected by
increased regulations.
Financial institutions face increased competition from nontraditional
lending sources as regulatory changes 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.
Retail Industry. The S&P Target 10 Portfolio is concentrated in the
common stocks of companies involved in the retail industry. General
risks of these companies include the general state of the economy,
intense competition and consumer spending trends. A decline in the
economy which results in a reduction of consumers' disposable income can
negatively impact spending habits. Competitiveness in the retail
industry will require large capital outlays for the installation of
automated checkout equipment to control inventory, track the sale of
items and gauge the success of sales campaigns. Retailers who sell their
products over the Internet have the potential to access more consumers,
but will require sophisticated technology to remain competitive.
Technology Industry. The Nasdaq Target 15 Portfolio is concentrated in
technology stocks. Technology companies are generally subject to the
risks of rapidly changing technologies; short product life cycles,
fierce competition; aggressive pricing; frequent introduction of new or
enhanced products; the loss of patent, copyright and trademark
protections; and government regulation. Technology companies may be
smaller and less experienced companies, with limited product lines,
markets or financial resources. Technology company stocks have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance.
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 and Philip Morris
Companies, Inc., or of the industries represented by these issuers may
negatively impact the share prices of these Securities. We cannot
predict what impact any pending or threatened litigation will have on
the share prices of the Securities.
Year 2000 Problem. Many computer systems were not designed to properly
process information and data involving dates of January 1, 2000 and
thereafter. This is commonly known as the "Year 2000 Problem." We do not
expect that any of the computer system changes necessary to prepare for
January 1, 2000 will cause any major operational difficulties for the
Trusts. However, we are unable to predict what impact the Year 2000
Problem will have on any of the issuers of the Securities.
Foreign Stocks. Certain or all of the Securities in certain Trusts are
issued by foreign companies, which makes these Trusts subject to more
risks than if they invested solely in domestic common stocks. Risks of
foreign common stocks include losses due to future political and
economic developments, foreign currency devaluations, restrictions on
foreign investments and exchange of securities, inadequate financial
information and lack of liquidity of certain foreign markets. In
addition, brokerage and other transaction costs on foreign securities
exchanges are often higher than in the U.S. and there is generally less
government supervision and regulation of exchanges, brokers, and issuers
in foreign countries.
The purchase and sale of the foreign Securities will generally occur
only in foreign securities markets. Although we do not believe that the
Trusts will have problems buying and selling these Securities, certain
of the factors stated above may make it impossible to buy or sell them
in a timely manner. Custody of certain of the Securities in the European
Target 20 Portfolio is maintained by Cedel Bank S.A., a global custody
and clearing institution which has entered into a sub-custodian
relationship with the Trustee.
United Kingdom. The Global Target 15 Portfolio and the European Target
20 Portfolio are concentrated in common stocks of U.K. issuers. The
United Kingdom is one of 15 members of the European Union ("EU") which
was formed by the Maastricht Treaty on European Union. It is expected
that the Treaty will have the effect of eliminating most remaining trade
barriers between the member nations and make Europe one of the largest
common markets in the world. However, the uncertain implementation of
Page 22
the Treaty provisions and recent rapid political and social change
throughout Europe make the extent and nature of future economic
development in the United Kingdom and Europe and their effect on
Securities issued by U.K. issuers impossible to predict.
Unlike a majority of EU members, the United Kingdom did not convert its
currency to the new common European currency, the euro, on January 1,
1999. All companies with significant markets or operations in Europe
face strategic challenges as these entities adapt to a single currency.
The euro conversion may materially impact revenues, expenses or income;
increase competition; affect issuers' currency exchange rate risk and
derivatives exposure; cause issuers to increase spending on information
technology updates; and result in potential adverse tax consequences. We
cannot predict whether the United Kingdom will ever convert to the euro
or what impact the implementation of a common currency throughout a
majority of EU countries will have on United Kingdom or European issuers.
Hong Kong. The Global Target 15 Portfolio is also concentrated in common
stocks of Hong Kong issuers. Hong Kong issuers are subject to risks
related to Hong Kong's political and economic environment, the
volatility of the Hong Kong stock market, and the concentration of real
estate companies in the Hang Seng Index. Hong Kong reverted to Chinese
control on July 1, 1997 and any increase in uncertainty as to the future
economic and political status of Hong Kong, or a deterioration of the
relationship between China and the United States, could have negative
implications on stocks listed on the Hong Kong stock market. Securities
prices on the Hong Kong Stock Exchange, and specifically the Hang Seng
Index, can be highly volatile and are sensitive to developments in Hong
Kong and China, as well as other world markets.
Exchange Rates. Because securities of foreign issuers generally pay
dividends and trade in foreign currencies, the U.S. dollar value of
these Securities (and therefore Units of the International Trusts) will
vary with fluctuations in foreign exchange rates. Most foreign
currencies have fluctuated widely in value against the U.S. dollar for
various economic and political reasons. The recent conversion by eleven
of the fifteen EU members of their national currencies to the euro could
negatively impact the market rate of exchange between such currencies
(or the newly created euro) and the U.S. dollar.
To determine the value of foreign Securities or their dividends, the
Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, these markets can be quite volatile, depending on the activity
of the large international commercial banks, various central banks,
large multi-national corporations, speculators and other buyers and
sellers of foreign currencies. Since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated
by the Evaluator may not reflect the amount the International Trusts
would receive, in U.S. dollars, had the Trustee sold any particular
currency in the market.
Hypothetical Performance Information
The following tables compare hypothetical performance information for
the strategies employed by each Trust and the actual performance of the
DJIA, S&P 500 Index, Nasdaq 100 Index, Ibbotson Small-Cap Index, MSCI
Europe Index, FT Index, Hang Seng Index and a combination of the FT
Index, Hang Seng Index and the DJIA (the "Cumulative Index Returns") in
each of the full years listed below (and as of the most recent quarter).
These hypothetical returns should not be used to predict future
performance of the Trusts. Returns from a Trust will differ from its
strategy for several reasons, including the following:
- - Total Return figures shown do not reflect sales charges, commissions,
Trust expenses or taxes.
- - Strategy returns are for calendar years (and the most recent quarter),
while the Trusts begin and end on various dates.
- - Trusts have a maturity longer than one year.
- - Trusts may not be fully invested at all times or equally weighted in
all stocks comprising a strategy.
- - Securities are often purchased or sold at prices different from the
closing prices used in buying and selling Units.
- - For Trusts investing in foreign Securities, currency exchange rates
may differ.
You should note that the Trusts are not designed to parallel movements
in any index or combination of indexes, and it is not expected that they
will do so. In fact, each Trust's strategy underperformed its
comparative index, or combination thereof, in certain years and we
Page 23
cannot guarantee that a Trust will outperform its respective index over
the life of a Trust or over consecutive rollover periods, if available.
Each index differs widely in size and focus, as described below.
DJIA. The DJIA consists of 30 U.S. stocks chosen by the editors of The
Wall Street Journal as being representative of the broad market and of
American industry.
S&P 500 Index. The S&P 500 Index consists of 500 stocks chosen by
Standard and Poor's to be representative of the leaders of various
industries.
Nasdaq 100 Index. The NASDAQ 100 Index consists of the 100 largest non-
financial companies listed on the NASDAQ National Market System. As of
December 18, 1998, the constituents are constructed using a modified
market capitalization approach.
Ibbotson Small-Cap Index. The Ibbotson Small-Cap Index is a market
capitalization weighted index of the ninth and tenth deciles of the New
York Stock Exchange, plus stocks listed on the American Stock Exchange
and over-the-counter with the same or less capitalization as the upper
bound of the NYSE ninth decile.
Financial Times Industrial Ordinary Share Index. The FT Index consists
of 30 common stocks chosen by the editors of The Financial Times as
being representative of British industry and commerce.
Hang Seng Index. The Hang Seng Index consists of 33 of the stocks
currently listed on the Stock Exchange of Hong Kong Ltd. and is intended
to represent four major market sectors: commerce and industry, finance,
property and utilities.
MSCI Europe Index. The MSCI Europe Index is an equity market
capitalization weighted index consisting of over 500 companies from all
of the developed markets in Europe.
Page 24
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN (2)
Hypothetical Strategy Total Returns (1) Index Total Returns
______________________________________________________ _________________________________________
Target Ibbotson
Target 5 Target 10 Target 25 Small-Cap S&P 500 Small-Cap
Year Strategy Strategy Strategy Strategy DJIA Index Index
____ ________ _________ _________ _________ _______ ________ _________
<S> <C> <C> <C> <C> <C> <C> <C>
1972 22.92% 23.76% 8.04% 12.66% 18.38% 18.89% 4.43%
1973 20.01% 4.01% -6.99% -25.02% -13.20% -14.57% -30.90%
1974 -5.40% -1.02% -9.54% -34.85% -23.64% -26.33% -19.95%
1975 64.77% 56.10% 76.02% 40.13% 44.46% 36.84% 52.82%
1976 40.96% 35.18% 44.31% 45.70% 22.80% 23.64% 57.38%
1977 5.49% -1.95% -4.58% 16.22% -12.91% -7.25% 25.38%
1978 1.23% 0.03% 6.49% 17.53% 2.66% 6.49% 23.46%
1979 9.84% 13.01% 27.68% 40.78% 10.60% 18.22% 43.46%
1980 41.69% 27.90% 26.45% 61.97% 21.90% 32.11% 38.88%
1981 3.19% 7.46% 8.52% -9.46% -3.61% -4.92% 13.88%
1982 43.37% 27.12% 30.83% 51.26% 26.85% 21.14% 28.01%
1983 36.38% 39.07% 32.09% 31.04% 25.82% 22.28% 39.67%
1984 11.12% 6.22% 5.55% -1.10% 1.29% 6.22% -6.67%
1985 38.34% 29.54% 41.89% 50.81% 33.28% 31.77% 24.66%
1986 30.89% 35.63% 25.01% 23.35% 27.00% 18.31% 6.85%
1987 10.69% 5.59% 14.41% 14.94% 5.66% 5.33% -9.30%
1988 21.47% 24.57% 27.18% 23.19% 16.03% 16.64% 22.87%
1989 10.55% 26.97% 22.98% 26.10% 32.09% 31.35% 10.18%
1990 -15.74% -7.82% -0.82% 1.08% -0.73% -3.30% -21.56%
1991 62.03% 34.20% 37.67% 59.55% 24.19% 30.40% 44.63%
1992 22.90% 7.69% 15.14% 27.81% 7.39% 7.62% 23.35%
1993 34.01% 27.08% 15.22% 22.47% 16.87% 9.95% 20.98%
1994 8.27% 4.21% 9.73% 2.11% 5.03% 1.34% 3.11%
1995 30.50% 36.85% 36.69% 41.65% 36.67% 37.22% 34.66%
1996 26.20% 28.35% 28.53% 34.96% 28.71% 22.82% 17.62%
1997 19.97% 21.68% 30.69% 16.66% 24.82% 33.21% 22.78%
1998 12.36% 10.59% 1.83% 1.85% 18.03% 28.57% -7.38%
1999 -5.76% 0.86% -6.04% -13.96% 7.02% 4.97% -7.90%
(thru 3/31)
________________
<FN>
(1) The Strategy stocks for each Strategy for a given year consist of the
common stocks selected by applying the respective Strategy as of the
beginning of the period.
(2) Total Return represents the sum of the change in market value of each
group of stocks between the first and last trading day of a period and
the total dividends paid on each group of stocks during the period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return figures assume that all
dividends are reinvested semi-annually and all returns are stated in
terms of U.S. dollars. Based on the year-by-year returns contained in
the table, over the 27 full years as listed above, the Target 5
Strategy, Target 10 Strategy, the Target 25 Strategy and Target Small-
Cap Strategy achieved an average annual total return of 21.10%, 18.33%,
19.04%, and 19.43%, respectively. In addition, over this period, each
individual strategy achieved a greater average annual total return than
that of its corresponding index, the DJIA, S&P 500 Index and Ibbotson
Small-Cap Index which were 13.45%, 13.71% and 14.83%, respectively.
</FN>
</TABLE>
Page 25
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN (2)
Hypothetical Strategy Total Returns (1) Index Total Returns
__________________________________________ ________________________________________________________
Global European S&P Nasdaq MSCI Cumulative
Target 15 Target 20 Target 10 Target 15 Hang Seng Europe S&P 500 Nasdaq Index
Year Strategy Strategy Strategy Strategy FT Index Index DJIA Index Index 100 Index Returns(3)
____ _________ _________ _________ _________ ________ _________ ____ _______ _______ _________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1979 44.70% 43.17% 3.59% 77.99% 10.60% 18.22% 30.73%
1980 52.51% 54.15% 31.77% 65.48% 21.90% 32.11% 39.72%
1981 0.03% -10.59% -5.30% -12.34% -3.61% -4.92% -7.08%
1982 -2.77% 38.21% 0.42% -48.01% 26.85% 21.14% -6.91%
1983 15.61% 20.01% 21.94% -2.04% 25.82% 22.28% 15.24%
1984 29.88% 2.00% 16.34% 2.15% 42.61% 1.29% 1.26% 6.22% 15.35%
1985 54.06% 79.54% 43.49% 54.74% 50.95% 33.28% 79.79% 31.77% 46.32%
1986 38.11% 42.53% 21.81% 22.94% 24.36% 51.16% 27.00% 44.46% 18.31% 6.89% 34.18%
1987 17.52% 14.86% 9.16% 14.10% 37.13% -6.84% 5.66% 4.10% 5.33% 10.49% 11.99%
1988 24.26% 16.77% 20.35% -0.59% 9.00% 21.04% 16.03% 16.35% 16.64% 13.54% 15.36%
1989 15.98% 33.09% 39.62% 37.33% 20.07% 10.59% 32.09% 29.06% 31.35% 26.17% 20.92%
1990 3.19% -0.49% -5.64% -5.39% 11.03% 11.71% -0.73% -3.37% -3.30% -10.41% 7.34%
1991 40.40% 16.59% 24.64% 109.27% 8.77% 50.68% 24.19% 13.66% 30.40% 64.99% 27.88%
1992 26.64% -4.03% 24.66% -0.15% -3.13% 34.73% 7.39% -4.25% 7.62% 8.86% 12.99%
1993 65.65% 37.38% 42.16% 28.55% 19.22% 124.95% 16.87% 29.79% 9.95% 11.67% 53.68%
1994 -7.26% -0.51% 8.17% 10.50% 1.97% -29.34% 5.03% 2.66% 1.34% 1.74% -7.45%
1995 13.45% 34.71% 25.26% 53.80% 16.21% 27.52% 36.67% 22.13% 37.22% 43.01% 26.80%
1996 21.00% 24.35% 26.61% 60.03% 18.35% 37.86% 28.71% 21.57% 22.82% 42.74% 28.31%
1997 -6.38% 28.91% 61.46% 35.15% 14.78% -17.69% 24.82% 24.20% 33.21% 20.76% 7.30%
1998 13.50% 35.77% 53.85% 123.10% 12.32% -2.60% 18.03% 28.80% 28.57% 85.43% 9.25%
1999 2.68% 7.32% 1.92% 12.55% 4.92% 11.02% 7.02% -2.49% 4.97% 14.76% 7.65%
(thru 3/31)
____________
<FN>
(1) The Strategy stocks for each Strategy for a given year consist of
the common stocks selected by applying the respective Strategy as of the
beginning of the period.
(2) Total Return represents the sum of the change in market value of
each group of stocks between the first and last trading day of a period
and the total dividends paid on each group of stocks during the period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return figures assume that all
dividends are reinvested semi-annually (except for the FT Index and Hang
Seng Index from 12/31/78 through 12/31/86, during which time annual
reinvestment was assumed) and all returns are stated in terms of U.S.
dollars. Based on the year-by-year returns contained in the table, over
the full years listed above, the Global Target 15 Strategy, European
Target 20 Strategy, The S&P Target 10 Strategy and The Nasdaq Target 15
Strategy achieved an average annual total return of 21.32%, 22.42%,
26.40% and 32.79%, respectively. In addition, over each stated period,
each individual strategy achieved a greater average annual total return
than that of its corresponding index, the combination of the FT Index,
Hang Seng Index and DJIA (the "Cumulative Index"), MSCI Europe Index,
S&P 500 Index and Nasdaq 100 Index which were 17.94% 19.05%, 17.61% and
22.60%, respectively.
(3) Cumulative Index Returns represent the average of the annual returns
of the stocks contained in the FT Index, Hang Seng Index and DJIA.
Cumulative Index Returns do not represent an actual index.
</FN>
</TABLE>
Page 26
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- - The aggregate underlying U.S. dollar value of the Securities;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The total sales charge (which combines an initial up-front sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities, changes in the
relevant currency exchange rates, changes in the applicable commissions,
stamp taxes, custodial fees and other costs associated with foreign
trading, and changes in the value of the Income and/or Capital Accounts.
The Securities purchased with the portion of the Public Offering Price
intended to be used to reimburse the Sponsor for a Trust's organization
costs (including costs of preparing the registration statement, the
Indenture and other closing documents, registering Units with the
Securities and Exchange Commission ("SEC") and states, the initial audit
of each Trust portfolio, legal fees and the initial fees and expenses of
the Trustee) will be purchased in the same proportionate relationship as
all the Securities contained in a Trust. Securities will be sold to
reimburse the Sponsor for a Trust's organization costs at the end of the
initial offering period (a significantly shorter time period than the
life of the Trusts). During the initial offering period, there may be a
decrease in the value of the Securities. To the extent the proceeds from
the sale of these Securities are insufficient to repay the Sponsor for
Trust organization costs, the Trustee will sell additional Securities to
allow a Trust to fully reimburse the Sponsor. In that event, the net
asset value per Unit of a Trust will be reduced by the amount of
additional Securities sold. Although the dollar amount of the
reimbursement due to the Sponsor will remain fixed and will never exceed
the per Unit amount set forth for a Trust in "Statement of Net Assets,"
this will result in a greater effective cost per Unit to Unit holders
for the reimbursement to the Sponsor. To the extent actual organization
costs are less than the estimated amount, only the actual organization
costs will be deducted from the assets of a Trust. When Securities are
sold to reimburse the Sponsor for organization costs, the Trustee will
sell Securities, to the extent practicable, to an extent which will
maintain the same proportionate relationship among the Securities
contained in a Trust as existed prior to such sale.
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.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is initially equal to approximately 1% of the Public Offering
Price of a Unit. This initial sales charge is actually equal to the
difference between the maximum sales charge of 2.75% and the maximum
remaining deferred sales charge (initially $.175 per Unit) and will vary
from 1% with changes in the aggregate underlying U.S. dollar value of
the Securities, changes in the Income and Capital Accounts and as
deferred sales charge payments are made. In addition, ten monthly
deferred sales charges of $.0175 per Unit will be deducted from a
Trust's assets on approximately the twentieth day of each month from
July 20, 1999 through April 20, 2000. The maximum sales charge you will
pay during the initial offering period will be 2.75% of the Public
Offering Price per Unit (equivalent to 2.778% of the net amount
invested, exclusive of the deferred sales charge).
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
Page 27
fee account" as described below) the maximum sales charge is reduced, as
follows:
Your maximum
If you invest sales charge
(in thousands)* will be
_______________ ____________
$ 50 but less than $100 2.50%
$ 100 but less than $150 2.25%
$ 150 but less than $500 1.90%
$ 500 but less than $1,000 1.75%
$1,000 or more 1.00%
*The breakpoint sales charges are also applied on a Unit basis utilizing
a breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
You can combine the Units you purchase of Trusts in this prospectus with
any other same day purchases you make of other trusts for which we acted
as Principal Underwriter and which are currently in the initial offering
period to qualify for the reduced sales charges described above. The
reduced sales charge for quantity purchases will apply only to purchases
made by the same person on any one day from any one dealer. However, we
will consider Units you purchase in the name of your spouse or your
child under 21 years of age to be purchases by you for determining the
reduced sales charge. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the
broker/dealer or other selling agent making the sale.
If you commit to purchase Units of the Trusts, or subsequent series of
the Trusts, valued at $1,000,000 or more over a 12-month period
commencing with your first purchase you will receive the reduced sales
charge set forth above on all individual purchases over $83,000.
If you are purchasing Units with rollover proceeds from a previous
series of a Trust you will be subject only to the maximum deferred sales
charge on such Units (for rollover purchases of $1,000,000 or more such
charge shall be a deferred sales charge limited to 1.00% of the Public
Offering Price) but you will not be eligible to receive the reduced
sales charges described in the above table. In addition, you can use
termination proceeds from other unit investments trusts which have a
similar strategy as a Trust, or redemption or termination proceeds from
any unit investment trust we sponsor, to purchase Units of the Trusts
subject only to any remaining deferred sales charge. Please note that
you will be charged the amount of any remaining deferred sales charge on
Units you redeem when you redeem them.
The following persons may purchase Units at the Public Offering Price
less the applicable dealer concession:
- - Employees, officers and directors of the Sponsor, our related
companies, dealers and their affiliates, and vendors providing services
to us.
- - Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons).
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
a Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
If you purchase Units through registered broker/dealers who charge
periodic fees for financial planning, investment advisory or asset
management services or provide these services as part of an investment
account where a comprehensive "wrap fee" charge is imposed, you may
purchase Units in the primary or secondary market at the Public Offering
Price, subject only to the Sponsor's retention of the sales charge. See
"Distribution of Units-Dealer Concessions."
Every investor will be charged the deferred sales charge per Unit
regardless of any discounts. However, if you are eligible to receive a
discount such that the maximum sales charge you must pay is less than
the applicable maximum deferred sales charge, you will be credited the
difference between your maximum sales charge and the maximum deferred
sales charge at the time you buy your Units.
The Value of the Securities.
The aggregate underlying U.S. dollar 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
Page 28
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, the evaluation 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 evaluation). If current ask prices are unavailable, the
evaluation is generally determined:
a) On the basis of current ask prices for comparable securities,
b) By appraising the U.S. dollar value of the Securities on the ask side
of the market, or
c) By any combination of the above.
The total U.S. dollar value of the Securities in the International
Trusts during the initial offering period is computed on the basis of
the offering side value of the relevant currency exchange rate expressed
in U.S. dollars as of the Evaluation Time.
The Evaluator will appraise or have appraised the value of the
underlying 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 the following holidays as observed by the NYSE: New Year's
Day, Martin Luther King, Jr.'s Birthday, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day.
After the initial offering period is over, the secondary market Public
Offering Price will be determined based on the aggregate underlying U.S.
dollar value of the Securities in the Trust, plus or minus cash, if any,
in the Income and Capital Accounts of a Trust plus the applicable sales
charge. We calculate the aggregate underlying U.S. dollar value of the
Securities during the secondary market the same way as described above
for sales made during the initial offering period, except that bid
prices are used instead of ask prices when necessary. In addition, the
aggregate underlying U.S. dollar value of the Securities during the
secondary market is computed on the basis of the bid side value of the
relevant currency exchange rate expressed in U.S. dollars as of the
Evaluation Time.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
During the initial offering period, Units will be sold at the current
Public Offering Price. When the initial offering period ends, Units we
have reacquired may be offered by this prospectus at the secondary
market Public Offering Price (see "The Secondary Market").
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 2.25% of the Public
Offering Price per Unit. However, dealers and other selling agents will
receive a concession or agency commission of $0.13 per Unit on purchases
by Rollover Unit holders or on the sale of Units subject only to any
remaining deferred sales charge. In addition, dealers and other selling
agents will receive a maximum concession of up to $0.10 per Unit on
purchases of Units resulting from the automatic reinvestment of income
or capital distributions into additional Units.
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
_____________________ __________
$ 40 but less than $50 0.050%
$ 50 but less than $75 0.125%
$ 75 but less than $100 0.150%
$100 or more 0.200%
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Page 29
Units from brokers, dealers or other selling agents while a market is
being maintained for such Units, such entities agree to immediately
repay to us any concession or agency commission relating to the
reacquired Units. Certain commercial banks may be making Units of the
Trusts available to their customers on an agency basis. A portion of the
sales charge paid by these customers is kept by or given to the banks in
the amounts shown above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units. However, the Glass-Steagall
Act does allow certain agency transactions. In Texas and certain other
states, any banks making Units available must be registered as
broker/dealers under state law.
Award Programs.
From time to time we may sponsor programs which provide awards to our
dealers' registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets, and not out of
the Trust's assets. These programs will not change the price you pay for
your Units or the amount that a Trust will receive from the Units sold.
Investment Comparisons.
From time to time we may compare the then current estimated returns of a
Trust (which may show performance net of the expenses and charges a
Trust would have incurred) and returns over specified periods of other
similar trusts we sponsor in our advertising and sales materials, with
(1) returns on other taxable investments such as the common stocks
comprising various market indices, 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, Business Week,
Forbes or Fortune. The investment characteristics of each Trust, which
are described more fully elsewhere in this prospectus, differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of a Trust's future relative
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit for each Trust less any reduced sales charge as stated
in "Public Offering." Also, any difference between our cost to purchase
the Securities and the price we sell them to a Trust is considered a
profit or loss (see Note 2 of "Notes to Schedules of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
In maintaining a market for Units, any difference between the price at
which Units are purchased and the price at which they are sold (which
includes a maximum sales charge for each Trust) or redeemed will be a
profit or loss to us. The secondary market public offering price of
Units may be more or less than the cost of those Units to us.
The Secondary Market
Although we are not obligated to, we intend to maintain a market for the
Units after the initial offering period and continuously offer to
purchase Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. If you wish to
dispose of your Units, you should ask us for the current market prices
before making a tender for redemption to the Trustee. IF YOU 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 Units
or tender them for redemption before you have paid the total deferred
sales charge on your Units, you will have to pay the remainder at that
time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive the proceeds from the sale of Units
Page 30
we purchase no later than if they were redeemed by the Trustee. We may
tender Units we hold to the Trustee for redemption as any other Units.
If we elect not to purchase Units, the Trustee may sell tendered Units
in the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
The Public Offering Price of any Units we acquire will be consistent
with the Public Offering Price described in the then effective
prospectus. Any profit or loss from the resale or redemption of such
Units will belong to us.
Expenses and Charges
The estimated annual expenses of the Trusts are listed under "Fee
Table." If actual expenses exceed the estimate, the appropriate Trust
will bear the excess. The Trustee will pay operating expenses of the
Trusts from the Income Account of a Trust if funds are available, and
then from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee benefits from the
use of these funds.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
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 the Portfolio Supervisor, Evaluator and Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fee paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such service in such year.
In addition to a Trust's operating expenses, and the fees described
above, the Trusts may also incur the following charges:
- - A quarterly license fee payable by certain of the Trusts for the use
of certain trademarks and trade names of Dow Jones, Standard & Poor's or
The Nasdaq Stock Market, Inc.;
- - All legal expenses of the Trustee according to its responsibilities
under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
the rights and interests of the Unit holders;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust;
- - Foreign custodial and transaction fees, if any; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of a Trust (no such taxes or charges are now in place or
planned as far as we know).
The above expenses and the Trustee's annual fee (when paid or owing to
the Trustee) are secured by a lien on a Trust. In addition, if there is
not enough cash in the Income or Capital Accounts of a Trust, the
Trustee has the power to sell Securities in a Trust to make cash
available to pay these charges. Since the Securities are all common
stocks and dividend income is unpredictable, we cannot guarantee that
dividends will be sufficient to meet any or all expenses of a Trust. If
dividends are not enough, it is likely that the Trustee will have to
sell Securities to meet Trust expenses. These sales may result in
capital gains or losses to the Unit holders. See "Tax Status."
Tax Status
United States Taxation.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
Page 31
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a broker-
dealer, or other investor with special circumstances. In addition, this
section does not describe your state or foreign taxes. As with any
investment, you should consult your own tax professional about your
particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by a Trust, and as
such you will be considered to have received a pro rata share of income
(i.e., dividends and capital gains, if any) from each Security when such
income is considered to be received by a Trust. This is true even if you
elect to have your distributions automatically reinvested into
additional Units. In addition, the income from the Trust which you must
take into account for federal income tax purposes is not reduced for
amounts used to pay a deferred sales charge.
Your Tax Basis and Income or Loss Upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your units or redeem your units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total proceeds received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your units,
generally including sales charges, among each Security or other Trust
asset ratably according to their value on the date you purchase your
Units. In certain circumstances, however, you may have to adjust your
tax basis after you purchase your Units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and
profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The Tax Code may, however, treat certain capital gains
as ordinary income in special situations.
Rollovers.
If you elect to have your proceeds from a Trust rolled over into the
next series of such Trust, it is considered a sale for federal income
tax purposes, and any gain on the sale will be treated as a capital
gain, and any loss will be treated as a capital loss. However, any loss
you incur in connection with the exchange of your Units of a Trust for
units of the next series will generally be disallowed with respect to
this deemed sale and subsequent deemed repurchase, to the extent the two
trusts have identical Securities under the wash sale provisions of the
Internal Revenue Code.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Securities from a Domestic Trust when you redeem your Units or at a
Trust's termination. If you request an In-Kind Distribution you will be
responsible for any expenses related to this distribution. By electing
to receive an In-Kind Distribution, you will receive an undivided
interest in whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by such Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
Page 32
paid the expense. You may, however, be required to treat some or all of
the expenses of a Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by a Trust that are treated as U.S. source income (e.g.,
dividends received on Securities of domestic corporations) will
generally be subject to U.S. income taxation and withholding in the case
of Units held by non-resident alien individuals, foreign corporations or
other non-U.S. persons, subject to any applicable treaty. However,
distributions by a Trust that are derived from dividends of Securities
of a foreign corporation and that are not effectively connected to your
conduct of a trade or business within the United States will generally
not be subject to U.S. income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other U.S. persons, provided that less than 25 percent of the gross
income of the foreign corporation over the three-year period ending with
the close of the taxable year preceding payment was effectively
connected to the conduct of a trade or business within the United States.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
United Kingdom Taxation.
The following summary describes certain important U.K. tax consequences
for certain U.S. Unit holders who hold Units in the Global Target 15
Portfolio as capital assets. This summary is intended to be a general
guide only and is subject to any changes in law occurring after the date
of this prospectus. You should consult your own tax advisor about your
particular circumstances.
Taxation of Dividends. A U.K. resident individual who receives a
dividend from a U.K. company is generally entitled to a tax credit,
which is either offset against U.K. tax liabilities or, in certain
circumstances, repaid.
You will not be able to claim any refund of the tax credit for dividends
paid by U.K. companies.
Taxation of Capital Gains. U.S. investors who are neither resident nor
ordinarily resident in the United Kingdom will not generally be liable
for U.K. tax on gains arising on the disposal of Units in the Global
Target 15 Portfolio. However, they may be liable if the Units are used,
held or acquired for the purposes of a trade, profession or vocation
carried on in the United Kingdom. Individual U.S. investors may also be
liable if they have previously been resident or ordinarily resident in
the United States and become resident or ordinarily resident in the
United Kingdom in the future.
Inheritance Tax. Individual U.S. investors who are domiciled in the
United States and who are not U.K. nationals will generally not be
subject to U.K. inheritance tax on death or on gifts of the Units made
during their lifetimes, provided any applicable U.S. federal gift or
estate tax is paid. They may be subject to U.K. inheritance tax if the
Units are used in a business in the United Kingdom or relate to the
performance of personal services in the United Kingdom.
Where the Units are held on trust, the Units will generally not be
subject to U.K. inheritance tax unless the settlor, at the time of
settlement, was domiciled in the United Kingdom, in which case they may
be subject to tax.
It is very unlikely that the Units will be subject to both U.K.
inheritance tax and U.S. federal gift or estate tax. If they were, one
of the taxes could generally be credited against the other.
Stamp Tax. A sale of Securities listed in the FT Index will generally
result in either U.K. stamp duty or stamp duty reserve tax being payable
by the purchaser. The Global Target 15 Portfolio paid this tax when it
acquired Securities. When the Global Target 15 Portfolio sells
Securities, it is anticipated that the tax will be paid by the purchaser.
Hong Kong Taxation.
The following summary describes certain important Hong Kong tax
consequences to certain U.S. Unit holders who hold Units in the Global
Page 33
Target 15 Portfolio as capital assets. This summary assumes that you are
not carrying on a trade, profession or business in Hong Kong and that
you have no profits sourced in Hong Kong arising from the carrying on of
such trade, profession or business. This summary is intended to be a
general guide only and is subject to any changes in Hong Kong or U.S.
law occurring after the date of this prospectus and you should consult
your own tax advisor about your particular circumstances.
Taxation of Dividends. Dividends you receive from the Global Target 15
Portfolio relating to Hong Kong issuers are not taxable and therefore
will not be subject to the deduction of any withholding tax.
Profits Tax. Unless you are carrying on a trade, profession or business
in Hong Kong you will not be subject to profits tax imposed by Hong Kong
on any gain or profits made on the realization or other disposal of your
Units.
Estate Duty. Units of the Global Target 15 Portfolio do not give rise to
Hong Kong estate duty liability.
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. If you request certificates representing the Units
you ordered for purchase they will be delivered three business days
after your order or shortly thereafter. You may transfer or redeem Units
represented by a certificate by endorsing and surrendering it to the
Trustee, along with a written instrument(s) of transfer. You must sign
your name exactly as it appears on the face of the certificate with
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
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, numbered serially for identification purposes.
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 to you, as the Record Owner:
- - A written initial transaction statement containing a description of
your Trust;
- - The number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
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. The Trustee does not
require such charge now, nor are they currently contemplating doing so.
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.
Page 34
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;
- - 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.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. It is your responsibility to notify the Trustee
when you become Record Owner of the Units, but normally your
broker/dealer provides this notice. The Trustee will credit any
dividends received on a Trust's Securities to the Income Account of a
Trust. All other receipts, such as return of capital, are credited to
the Capital Account of a Trust. Dividends received on foreign
Securities, if any, are converted into U.S. dollars at the applicable
exchange rate.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." 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
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. However, amounts in the Capital Account from the sale of
Securities designated to meet redemptions of Units, pay the deferred
sales charge or pay expenses will not be distributed. The Trustee is not
required to pay interest on funds held in the Income or Capital Accounts
of a Trust. However, the Trustee may earn interest on these funds, thus
benefiting from the use of such funds.
We anticipate that the deferred sales charge will be collected from the
Capital Account of a Trust and that there will be enough money in the
Capital Account to cover these costs. If there is not enough money in
the Capital Account to pay the deferred sales charge, the Trustee may
sell Securities to meet the shortfall. We will designate an account
where distributions will be made to pay the deferred sales charge.
The Trustee is required by the Internal Revenue Service to withhold a
certain percentage of any distribution a Trust makes and deliver such
amount to the Internal Revenue Service if the Trustee does not have your
TIN. You may recover this amount by giving your TIN to the Trustee, or
when you file a tax return. Normally, the selling broker gives your TIN
to the Trustee. However, you should check your statements from the
Trustee to make sure they have the number to avoid this "back-up
withholding." If not, you should provide it to the Trustee as soon as
possible.
Within a reasonable time after a Trust is terminated, unless you are a
Rollover Unit holder, you will receive the pro rata share of the money
from the disposition of the Securities. However, if you own Units of a
Domestic Trust, you may elect to receive a distribution of shares of
Securities (an "In-Kind Distribution") as described under "Amending or
Terminating the Indenture." All Unit holders will receive a pro rata
share of any other assets remaining in the Trust, after deducting any
unpaid expenses of that Trust.
The Trustee may establish reserves (the "Reserve Account") within a
Trust for any state and local taxes and any governmental charges to be
paid out of that Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. You will have to pay any remaining deferred sales charge on any
Units acquired pursuant to this distribution reinvestment option. This
Page 35
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. 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 held in
uncertificated form, you need only to deliver a request for redemption
to the Trustee. In either case, the certificates or the redemption
request you send to the Trustee must be properly endorsed with proper
instruments of transfer and signature guarantees as explained in "Rights
of Unit Holders-Unit Ownership" (or by providing satisfactory indemnity
if the certificates were lost, stolen, or destroyed). No redemption fee
will be charged, but you are responsible for any governmental charges
that apply. Three business days after the day you tender your Units (the
"Date of Tender") you will receive cash in an amount for each Unit equal
to the Redemption Price per Unit calculated at the Evaluation Time on
the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of a Trust.
If you are tendering 1,000 Units or more of a Domestic Trust for
redemption, rather than receiving cash, you may elect to receive an In-
Kind Distribution in an amount and value 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 there is not enough money in the
Capital Account to pay the required cash distribution, the Trustee may
have to sell Securities.
The Internal Revenue Service will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee has not previously
been provided your TIN. For more information about this withholding, see
"Income and Capital Distributions." If the Trustee does not have your
TIN, you must provide it at the time of the redemption request.
The Trustee may sell Securities of a Trust to make funds available for
redemption. If Securities are sold, the size and diversification of a
Trust will be reduced. These sales may result in lower prices than if
the Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate underlying U.S. dollar value of the Securities held in
that Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
Page 36
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of such Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, during the
initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
The aggregate underlying U.S. dollar value of the Securities for
purposes of calculating the Redemption Price during the secondary market
is determined in the same manner as that used to calculate the secondary
market Public Offering Price as discussed in "Public Offering-The Value
of the Securities."
Reinvesting in a New Trust
Each Trust's portfolio has been selected on the basis of capital
appreciation potential for a limited time period. When each Trust is
about to terminate, you may have the option to roll your proceeds into
the next series of a Trust (the "New Trusts") if one is available. We
intend to create the New Trusts in conjunction with the termination of
the Trusts and plan to apply the same strategy we used to select the
portfolio for the Trusts to the New Trusts.
If you wish to have the proceeds from your Units rolled into a New Trust
you must notify the Trustee in writing of your election by the Rollover
Notification Date stated in the "Summary of Essential Information." As a
Rollover Unit holder, your Units will be redeemed and the underlying
Securities sold by the Trustee, in its capacity as Distribution Agent,
during the Special Redemption and Liquidation Period. The Distribution
Agent may engage us or other brokers as its agent to sell the Securities.
Once all of the Securities are sold, your proceeds, less any brokerage
fees, governmental charges or other expenses involved in the sales, will
be used to buy units of a New Trust or trust with a similar investment
strategy that you have selected, provided such trusts are registered and
being offered. Accordingly, proceeds may be uninvested for up to several
days. Units purchased with rollover proceeds will generally be purchased
subject only to the maximum remaining deferred sales charge on such
units (currently expected to be $.175 per unit).
We intend to create New Trust units as quickly as possible, depending on
the availability of the Securities contained in a New Trust's portfolio.
Rollover Unit holders will be given first priority to purchase New Trust
units. We cannot, however, assure the exact timing of the creation of
New Trust units or the total number of New Trust units we will create.
Any proceeds not invested on behalf of Rollover Unit holders in New
Trust units will be distributed within a reasonable time after such
occurrence. Although we believe that enough New Trust units can be
created, monies in a New Trust may not be fully invested on the next
business day.
Please note that there are certain tax consequences associated with
becoming a Rollover Unit holder. See "Tax Status." If you elect not to
participate as a Rollover Unit holder ("Remaining Unit holders"), you
will not incur capital gains or losses due to the Special Redemption and
Liquidation, nor will you be charged any additional sales charge. We may
modify, amend or terminate this rollover option upon 60 days notice.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
Page 37
- - 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; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities to replace failed contracts to purchase Securities, as
described in "The FT Series," a Trust may not acquire any securities or
other property other than the Securities. The Trustee, on behalf of a
Trust, will reject any offer for new or exchanged securities or property
in exchange for a Security, such as those acquired in a merger or other
transaction. If such exchanged securities or property are nevertheless
acquired by a Trust, at our instruction they will either be sold or held
in the Trust. In making the determination as to whether to sell or hold
the exchanged securities or property we may get advice from the
Portfolio Supervisor. Any proceeds received from the sale of Securities,
exchanged securities or property will be credited to the Capital Account
of a Trust for distribution to Unit holders or to meet redemption
requests. The Trustee may retain and pay us or an affiliate of ours to
act as agent for the Trusts to facilitate selling Securities, exchanged
securities or property from the Trusts. If we or our affiliate act in
this capacity, we will be held subject to the restrictions under the
Investment Company Act of 1940, as amended.
The Trustee may sell Securities that we designate; or, without our
direction, in its own discretion, in order to meet redemption requests
or pay expenses. In designating which Securities should 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 have to 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 in making recommendations to the Trustee on the
selection of broker/dealers to execute the Trusts' portfolio
transactions, or when acting as agent for the Trusts in acquiring or
selling Securities on behalf of the Trusts.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, each Trust will terminate on
the Mandatory Termination Date. A Trust may be terminated prior to the
Mandatory Termination Date:
- - Upon the consent of 100% of the Unit holders;
- - If the value of the Securities owned by such Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
In the event of termination, the Trustee will send prior written notice
thereof 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 to each purchaser of Units of such
Trust the entire sales charge paid by such purchaser; however,
termination of a Trust prior to the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, including Unit holders' participation as Rollover Unit
holders, a Trust may be reduced below the Discretionary Liquidation
Amount and could therefore be terminated prior to 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
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Termination Date. We will determine the manner, timing and execution of
the sale of Securities as part of the termination of a Trust. 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 amount than might otherwise be realized if such sale
were not required at this time.
If you own at least 1,000 Units of a Domestic Trust the Trustee will
send you a form at least 30 days prior to the Mandatory Termination Date
which will enable you to receive an In-Kind Distribution of Securities
(reduced by customary transfer and registration charges) rather than the
typical cash distribution. You must notify the Trustee at least ten
business days prior to the Mandatory Termination Date if you elect this
In-Kind Distribution option. If you do not elect to participate in
either the Rollover Option or the In-Kind Distribution option for
eligible Unit holders of Domestic Trusts, you will receive a cash
distribution from the sale of the remaining Securities, along with your
interest in the Income and Capital Accounts of a Trust, within a
reasonable time after your Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from a Trust any accrued
costs, expenses, advances or indemnities provided 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 $25 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, 1998, the total partners' capital of
Nike Securities L.P. was $18,506,548 (audited).
This information refers only to the Sponsor 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.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable to Unit holders for taking any
action or for not taking any action in good faith according to the
Indenture. We will also not be accountable for errors in judgment. We
will only be liable for our own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the Trustee's case) or reckless
disregard of our obligations and duties. The Trustee is not liable for
any loss or depreciation when the Securities are sold. If we fail to act
under the Indenture, the Trustee may do so, and the Trustee will not be
liable for any action it takes in good faith under the Indenture.
Page 39
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trust, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
However, the Evaluator 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 risk information about the Trusts.
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Page 43
FIRST TRUST (registered trademark)
The Dow (sm) Target 5 Portfolio, June 1999 Series
The Dow (sm) Target 10 Portfolio, June 1999 Series
Target 25 Portfolio, June 1999 Series
Target Small-Cap Portfolio, June 1999 Series
Global Target 15 Portfolio, June 1999 Series
European Target 20 Portfolio, June 1999 Series
The S&P Target 10 Portfolio, June 1999 Series
The Nasdaq Target 15 Portfolio, June 1999 Series
FT 334
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
________________________
When Units of the Trusts are no longer available, this prospectus may be
used as a preliminary prospectus for a future series, in which case you
should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES
UNTIL THAT SERIES HAS BECOME EFFECTIVE WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO SECURITIES CAN BE SOLD IN ANY STATE WHERE A SALE WOULD BE
ILLEGAL.
________________________
This prospectus contains information relating to the eight unit
investment trusts listed above, 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. 333-73343) and
- Investment Company Act of 1940 (file no. 811-05903)
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549-6009
Call: 1-800-SEC-0330
Visit: http://www.sec.gov
May 28, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 44
First Trust (registered trademark)
TARGET PORTFOLIO SERIES
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in Target Portfolio Series not found in the prospectus for the
Trusts. This Information Supplement is not a prospectus and does not
include all of the information that a prospective investor should
consider before investing in a Trust. This Information Supplement should
be read in conjunction with the prospectus for the Trust in which an
investor is considering investing.
This Information Supplement is dated May 28, 1999. Capitalized terms
have been defined in the prospectus.
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Dow Jones & Company, Inc. 1
Standard & Poor's 2
The Nasdaq Stock Market, Inc. 2
Risk Factors 3
Securities 3
Dividends 3
Foreign Issuers 4
United Kingdom 4
Hong Kong 5
Exchange Rate 6
Litigation 10
Tobacco Industry 10
Concentrations 10
Banks and Thrifts 10
Petroleum Refining Companies 12
Real Estate Companies 13
Retail Companies 14
Technology Companies 14
Small-Cap Companies 16
Portfolios 16
Equity Securities Selected for The Dow (sm) Target 5 Portfolio, June 1999 Series 16
Equity Securities Selected for The Dow (sm) Target 10 Portfolio, June 1999 Series 17
Equity Securities Selected for Target 25 Portfolio, June 1999 Series 17
Equity Securities Selected for Target Small-Cap Portfolio, June 1999 Series 19
Equity Securities Selected for Global Target 15 Portfolio, June 1999 Series 21
Equity Securities Selected for European Target 20 Portfolio, June 1999 Series 22
Equity Securities Selected for The S&P Target 10 Portfolio, June 1999 Series 24
Equity Securities Selected for The Nasdaq Target 15 Portfolio, June 1999 Series 24
</TABLE>
Dow Jones & Company, Inc.
The Trusts are not sponsored, endorsed, sold or promoted by Dow Jones &
Company, Inc. ("Dow Jones"). Dow Jones makes no representation or
warranty, express or implied, to the owners of the Trusts or any member
of the public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only relationship to
the Sponsor is the licensing of certain trademarks, trade names and
Page 1
service marks of Dow Jones and of the Dow Jones Industrial Average (SM),
which is determined, composed and calculated by Dow Jones without regard
to the Sponsor or the Trusts. Dow Jones has no obligation to take the
needs of the Sponsor or the owners of the Trusts into consideration in
determining, composing or calculating the Dow Jones Industrial Average
(SM). Dow Jones is not responsible for and has not participated in the
determination of the timing of, prices at, or quantities of the Trusts
to be issued or in the determination or calculation of the equation by
which the Trusts are to be converted into cash. Dow Jones has no
obligation or liability in connection with the administration, marketing
or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES INDUSTRIAL AVERAGE (SM) OR ANY DATA INCLUDED THEREIN AND DOW
JONES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR
INTERRUPTIONS THEREIN. DOW JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR
ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES INDUSTRIAL
AVERAGE (SM) OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE DOW JONES INDUSTRIAL AVERAGE (SM) OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
Standard & Poor's
The Trusts are not sponsored, endorsed, sold or promoted by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"). S&P makes
no representation or warranty, express or implied, to the owners of the
Trusts or any member of the public regarding the advisability of
investing in securities generally or in the Trusts particularly or the
ability of the S&P 500 Index to track general stock market performance.
S&P's only relationship to the licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index, which is
determined, composed and calculated by S&P without regard to the
licensee or the Trusts. S&P has no obligation to take the needs of the
licensee or the owners of the Trusts into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for
and has not participated in the determination of the prices and amount
of the Trusts or the timing of the issuance or sale of the Trusts or in
the determination or calculation of the equation by which the Trusts are
to be converted into cash. S&P has no obligation or liability in
connection with the administration, marketing or trading of the Trusts.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE
LICENSEE, OWNERS OF THE TRUSTS, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES,
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY
FOR ANY SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING
LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
The Nasdaq Stock Market, Inc.
The Nasdaq Target 15 Portfolio Series is not sponsored, endorsed, sold
or promoted by The Nasdaq Stock Market, Inc. (including its affiliates)
(Nasdaq, with its affiliates, are referred to as the "Corporations").
The Corporations have not passed on the legality or suitability of, or
the accuracy or adequacy of descriptions and disclosures relating to the
Nasdaq Target 15 Portfolio Series. The Corporations make no
Page 2
representation or warranty, express or implied, to the owners of Units
of the Nasdaq Target 15 Portfolio Series or any member of the public
regarding the advisability of investing in securities generally or in
the Nasdaq Target 15 Portfolio Series particularly, or the ability of
the Nasdaq 100 Index(registered trademark) to track general stock market
performance. The Corporations' only relationship to the Sponsor
("Licensee") is in the licensing of the Nasdaq 100(registered
trademark), Nasdaq 100 Index(registered trademark) and Nasdaq(registered
trademark) trademarks or service marks, and certain trade names of the
Corporations and the use of the Nasdaq 100 Index(registered trademark)
which is determined, composed and calculated by Nasdaq without regard to
Licensee or the Nasdaq Target 15 Portfolio Series. Nasdaq has no
obligation to take the needs of the Licensee or the owners of Units of
the Nasdaq Target 15 Portfolio Series into consideration in determining,
composing or calculating the Nasdaq 100 Index(registered trademark). The
Corporations are not responsible for and have not participated in the
determination of the timing of, prices at or quantities of the Nasdaq
Target 15 Portfolio Series to be issued or in the determination or
calculation of the equation by which the Nasdaq Target 15 Portfolio
Series is to be converted into cash. The Corporations have no liability
in connection with the administration, marketing or trading of the
Nasdaq Target 15 Portfolio Series.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ 100 INDEX(registered trademark) OR ANY DATA
INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE NASDAQ
TARGET 15 PORTFOLIO SERIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE NASDAQ 100 INDEX(registered trademark) OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ 100
INDEX(registered trademark) OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE
ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY
OF SUCH DAMAGES.
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. From September
30, 1997 through October 30, 1997, amid record trading volume, the S&P
500 Index, DJIA, FT Index and Hang Seng Index declined 4.60%, 7.09%,
6.19% and 31.14%, respectively. In addition, against a backdrop of
continued uncertainty regarding the current global currency crisis and
falling commodity prices, during the period between July 31, 1998 and
September 30, 1998, the S&P 500, DJIA and FT Index declined by 8.97%,
11.32% and 17.80%, respectively, while the Hang Seng Index increased .20%.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Shareholders of common stocks of the type held
by the Trusts have a right to receive dividends only when and if, and in
the amounts, declared by the issuer's board of directors and have a
right to participate in amounts available for distribution by the issuer
only after all other claims on the issuer have been paid or provided
for. Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same
degree of protection of capital as do debt securities. The issuance of
additional debt securities or preferred stock will create prior claims
for payment of principal, interest and dividends which could adversely
Page 3
affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock
with respect to assets of the issuer upon liquidation or bankruptcy.
Cumulative preferred stock dividends must be paid before common stock
dividends, and any cumulative preferred stock dividend omitted is added
to future dividends payable to the holders of cumulative preferred
stock. Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Foreign Issuers. Since certain or all of the Securities included in the
International Trusts consist of securities of foreign issuers, an
investment in such Trusts involves certain investment risks that are
different in some respects from an investment in a trust which invests
entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Securities, the possibility that the financial condition of the
issuers of the Securities may become impaired or that the general
condition of the relevant stock market may worsen (both of which would
contribute directly to a decrease in the value of the Securities and
thus in the value of the Units), the limited liquidity and relatively
small market capitalization of the relevant securities market,
expropriation or confiscatory taxation, economic uncertainties and
foreign currency devaluations and fluctuations. In addition, for foreign
issuers that are not subject to the reporting requirements of the
Securities Exchange Act of 1934, there may be less publicly available
information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign
issuers are less liquid and their prices more volatile than securities
of comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the
International Trusts, the Sponsor believes that adequate information
will be available to allow the Supervisor to provide portfolio
surveillance for such Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities. See "Exchange Rate" below.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the International Trusts are
subject to exchange control restrictions under existing law which would
materially interfere with payment to such Trusts of dividends due on, or
proceeds from the sale of, the Securities. However, there can be no
assurance that exchange control regulations might not be adopted in the
future which might adversely affect payment to such a Trust. The
adoption of exchange control regulations and other legal restrictions
could have an adverse impact on the marketability of international
securities in the International Trusts and on the ability of such Trusts
to satisfy their obligation to redeem Units tendered to the Trustee for
redemption. In addition, restrictions on the settlement of transactions
on either the purchase or sale side, or both, could cause delays or
increase the costs associated with the purchase and sale of the foreign
Securities and correspondingly could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to a Trust relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by a
Trust will generally be effected only in foreign securities markets.
Although the Sponsor does not believe that the International Trust will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and makes a
Page 4
significant contribution to the country's balance of payments. The
portfolios of the International Trusts may contain common stocks of
British companies engaged in such industries as banking, chemicals,
building and construction, transportation, telecommunications and
insurance. Many of these industries may be subject to government
regulation, which may have a materially adverse effect on the
performance of their stock. In the first quarter of 1998, gross domestic
product (GDP) of the United Kingdom grew to a level 3.0% higher than in
the first quarter of 1997, however the overall rate of GDP growth has
slowed since the third quarter of 1997. The slow down largely reflects a
deteriorating trade position and higher indirect taxes. The average
quarterly rate of GDP growth in the United Kingdom (as well as in Europe
generally) has been decelerating since 1994. The United Kingdom is a
member of the European Union (the "EU") which was created through the
formation of the Maastricht Treaty on European Union in late 1993. It is
expected that the Treaty will have the effect of eliminating most
remaining trade barriers between the 15 member nations and make Europe
one of the largest common markets in the world. However, the effective
implementation of the Treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of
Securities issued by United Kingdom companies impossible to predict.
A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in this conversion on January 1, 1999
and the Sponsor is unable to predict if or when the United Kingdom will
convert to the euro. Moreover, it is not possible to accurately predict
the effect of the current political and economic situation upon long-
term inflation and balance of trade cycles and how these changes, as
well as the implementation of a common currency throughout a majority of
EU countries, would affect the currency exchange rate between the U.S.
dollar and the British pound sterling. In addition, United Kingdom
companies with significant markets or operations in other European
countries (whether or not such countries are participating) face
strategic challenges as these entities adapt to a single trans-national
currency. The euro conversion may have a material impact on revenues,
expenses or income from operations; increase competition due to the
increased price transparency of EU markets; affect issuers' currency
exchange rate risk and derivatives exposure; disrupt current contracts;
cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax
consequences. The Sponsor is unable to predict what impact, if any, the
euro conversion will have on any of the Securities issued by United
Kingdom companies in the International Trusts.
Hong Kong. Hong Kong, established as a British colony in the 1840's,
reverted to Chinese sovereignty effective July 1, 1997. On such date,
Hong Kong became a Special Administrative Region ("SAR") of China. Hong
Kong's new constitution is the Basic Law (promulgated by China in 1990).
Prior to July 1, 1997, the Hong Kong government followed a laissez-faire
policy toward industry. There were no major import, export or foreign
exchange restrictions. Regulation of business was generally minimal with
certain exceptions, including regulated entry into certain sectors of
the economy and a fixed exchange rate regime by which the Hong Kong
dollar has been pegged to the U.S. dollar. Over the past two decades
through 1996, the gross domestic product (GDP) has tripled in real
terms, equivalent to an average annual growth rate of 6%. However, Hong
Kong's recent economic data has not been encouraging. The full impact of
the Asian financial crisis, as well as current international economic
instability, is likely to continue to have a negative impact on the Hong
Kong economy in the near future.
Although China has committed by treaty to preserve for 50 years the
economic and social freedoms enjoyed in Hong Kong prior to the
reversion, the continuation of the economic system in Hong Kong after
the reversion will be dependent on the Chinese government, and there can
be no assurances that the commitment made by China regarding Hong Kong
will be maintained. Prior to the reversion, legislation was enacted in
Hong Kong designed to extend democratic voting procedures for Hong
Kong's legislature. China has expressed disagreement with this
legislation, which it states is in contravention of the principles
evidenced in the Basic Law of the Hong Kong SAR. The National Peoples'
Congress of China has passed a resolution to the effect that the
Legislative Council and certain other councils and boards of the Hong
Kong Government were to be terminated on June 30, 1997. Such bodies have
subsequently been reconstituted in accordance with China's
Page 5
interpretation of the Basic Law. Any increase in uncertainty as to the
future economic and political status of Hong Kong could have a
materially adverse effect on the value of the Global Target 15
Portfolio. The Sponsor is unable to predict the level of market
liquidity or volatility which may occur as a result of the reversion to
sovereignty, both of which may negatively impact such Trust and the
value of the Units.
China currently enjoys a most favored nation status ("MFN Status") with
the United States. MFN Status is subject to annual review by the
President of the United States and approval by Congress. As a result of
Hong Kong's reversion to Chinese control, U.S. lawmakers have suggested
that they may review China's MFN status on a more frequent basis.
Revocation of the MFN Status would have a severe effect on China's trade
and thus could have a materially adverse effect on the value of the
Global Target 15 Portfolio. The performance of certain companies listed
on the Hong Kong Stock Exchange is linked to the economic climate of
China. The renewal of China's MFN Status in May of 1996 has helped to
reduce the uncertainty for Hong Kong in conducting Sino-U.S. trade, and
the signing of the agreement on copyright protection between the U.S.
and Chinese governments in June of 1996 averted a trade war that would
have affected Hong Kong's re-export trade. In 1997, China and the United
States reached a four-year bilateral agreement on textiles, again
avoiding a Sino-U.S. trade war. More recently, the currency crisis which
has affected a majority of Asian markets since mid-1997 has forced Hong
Kong leaders to address whether to devalue the Hong Kong dollar or
maintain its peg to the U.S. dollar. During the volatile markets of
1998, the Hong Kong Monetary Authority (the "HKMA") acquired the common
stock of certain Hong Kong issuers listed on the Hong Kong Stock
Exchange in an effort to stabilize the Hong Kong dollar and thwart
currency speculators. Government intervention may hurt Hong Kong's
reputation as a free market and increases concerns that authorities are
not willing to let Hong Kong's currency system function autonomously.
This may undermine confidence in the Hong Kong dollar's peg to the U.S.
dollar. Any downturn in economic growth or increase in the rate of
inflation in China or Hong Kong could have a materially adverse effect
on the value of the Global Target 15 Portfolio.
Securities prices on the Hong Kong Stock Exchange, and specifically the
Hang Seng Index, can be highly volatile and are sensitive to
developments in Hong Kong and China, as well as other world markets. For
example, the Hang Seng Index declined by approximately 31% in October,
1997 as a result of speculation that the Hong Kong dollar would become
the next victim of the Asian currency crisis, and in 1989, the Hang Seng
Index dropped 1,216 points (approximately 58%) in early June following
the events at Tiananmen Square. The Hang Seng Index gradually climbed
subsequent to the events at Tiananmen Square, but fell by 181 points on
October 13, 1989 (approximately 6.5%) following a substantial fall in
the U.S. stock markets. During 1994, the Hang Seng Index lost
approximately 31% of its value. From January through August of 1998,
during a period marked by international economic instability and a
global currency crisis, the Hang Seng Index declined by nearly 27%. The
Hang Seng Index is subject to change and delisting of any issues may
have an adverse impact on the performance of the Global Target 15
Portfolio, although delisting would not necessarily result in the
disposal of the stock of these companies, nor would it prevent such
Trust from purchasing additional Securities. In recent years, a number
of companies, comprising approximately 10% of the total capitalization
of the Hang Seng Index, have delisted. In addition, as a result of Hong
Kong's reversion to Chinese sovereignty, an increased number of Chinese
companies could become listed on the Hong Kong Stock Exchange, thereby
changing the composition of the stock market and, potentially, the
composition of the Hang Seng Index.
Exchange Rate. The International Trusts are comprised either totally or
substantially of Securities that are principally traded in foreign
currencies and as such, involve investment risks that are substantially
different from an investment in a fund which invests in securities that
are principally traded in United States dollars. The United States
dollar value of the portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the
United States dollar foreign exchange rates for the relevant currencies.
Most foreign currencies have fluctuated widely in value against the
United States dollar for many reasons, including supply and demand of
the respective currency, the rate of inflation in the respective
economies compared to the United States, the impact of interest rate
differentials between different currencies on the movement of foreign
currency rates, the balance of imports and exports goods and services,
the soundness of the world economy and the strength of the respective
economy as compared to the economies of the United States and other
countries.
The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty which established a system of
Page 6
fixed exchange rates and the convertibility of the United States dollar
into gold through foreign central banks. Starting in 1971, growing
volatility in the foreign exchange markets caused the United States to
abandon gold convertibility and to effect a small devaluation of the
United States dollar. In 1973, the system of fixed exchange rates
between a number of the most important industrial countries of the
world, among them the United States and most Western European countries,
was completely abandoned. Subsequently, major industrialized countries
have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have
continued to "peg" their currencies to the United States dollar although
there has been some interest in recent years in "pegging" currencies to
"baskets" of other currencies or to a Special Drawing Right administered
by the International Monetary Fund. Since 1983, the Hong Kong dollar has
been pegged to the U.S. dollar. In Europe, the euro has been developed.
Currencies are generally traded by leading international commercial
banks and institutional investors (including corporate treasurers, money
managers, pension funds and insurance companies). From time to time,
central banks in a number of countries also are major buyers and sellers
of foreign currencies, mostly for the purpose of preventing or reducing
substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The following tables set forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling, the Hong Kong dollar and the euro:
Page 7
Range of Fluctuations in Foreign Currencies
United Kingdom
Annual Pound Sterling/ Hong Kong/
Period U.S. Dollar U.S. Dollar
______ _______________ ___________
1983 0.616-0.707 6.480-8.700
1984 0.670-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.499-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763
1996 0.583-0.670 7.732-7.742
1997 0.584-0.633 7.708-7.751
1998 0.584-0.620 7.735-7.749
Source: Bloomberg L.P.
Page 8
<TABLE>
<CAPTION>
End of Month Exchange Rates End of Month Exchange Rates
for Foreign Currencies for Foreign Currencies (continued)
United Kingdom Hong United Kingdom Hong
Pound Sterling/ Kong/U.S. Euro/ Pound Sterling/ Kong/U.S. Euro/
Monthly Period U.S. Dollar Dollar U.S. Dollar Monthly Period U.S. Dollar Dollar U.S. Dollar
______________ ______________ __________ __________ ______________ ______________ _________ __________
<S> <C> <C> <C> <C> <C> <C> <C>
1992: September .631 7.732 N.A.
January .559 7.762 N.A. October .633 7.727 N.A.
February .569 7.761 N.A. November .652 7.731 N.A.
March .576 7.740 N.A. December .645 7.733 N.A.
April .563 7.757 N.A. 1996:
May .546 7.749 N.A. January .661 7.728 N.A.
June .525 7.731 N.A. February .653 7.731 N.A.
July .519 7.732 N.A. March .655 7.734 N.A.
August .503 7.729 N.A. April .664 7.735 N.A.
September .563 7.724 N.A. May .645 7.736 N.A.
October .641 7.736 N.A. June .644 7.741 N.A.
November .659 7.742 N.A. July .642 7.735 N.A.
December .662 7.744 N.A. August .639 7.733 N.A.
1993: September .639 7.733 N.A.
January .673 7.734 N.A. October .615 7.732 N.A.
February .701 7.734 N.A. November .595 7.732 N.A.
March .660 7.731 N.A. December .583 7.735 N.A.
April .635 7.730 N.A. 1997:
May .640 7.724 N.A. January .624 7.750 N.A.
June .671 7.743 N.A. February .614 7.744 N.A.
July .674 7.761 N.A. March .611 7.749 N.A.
August .670 7.755 N.A. April .616 7.746 N.A.
September .668 7.734 N.A. May .610 7.748 N.A.
October .676 7.733 N.A. June .600 7.747 N.A.
November .673 7.725 N.A. July .609 7.742 N.A.
December .677 7.723 N.A. August .622 7.750 N.A.
1994: September .619 7.738 N.A.
January .664 7.724 N.A. October .598 7.731 N.A.
February .673 7.727 N.A. November .592 7.730 N.A.
March .674 7.737 N.A. December .607 7.749 N.A.
April .659 7.725 N.A. 1998:
May .662 7.726 N.A. January .613 7.735 N.A.
June .648 7.730 N.A. February .609 7.743 N.A.
July .648 7.725 N.A. March .598 7.749 N.A.
August .652 7.728 N.A. April .598 7.747 N.A.
September .634 7.727 N.A. May .613 7.749 N.A.
October .611 7.724 N.A. June .600 7.748 N.A.
November .639 7.731 N.A. July .613 7.748 N.A.
December .639 7.738 N.A. August .595 7.749 N.A.
1995: September .589 7.749 N.A.
January .633 7.732 N.A. October .596 7.747 N.A.
February .631 7.730 N.A. November .607 7.743 N.A.
March .617 7.733 N.A. December .602 7.746 N.A.
April .620 7.742 N.A. 1999:
May .630 7.735 N.A. January .608 7.748 1.136
June .627 7.736 N.A. February .624 7.748 1.103
July .626 7.738 N.A. March .621 7.750 1.076
August .645 7.741 N.A. April .621 7.750 1.057
May 27 .626 7.755 1.042
</TABLE>
Source: Bloomberg L.P.
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
Page 9
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the
International Trusts would receive had the Trustee sold any particular
currency in the market. The foreign exchange transactions of the
International Trusts will be conducted by the Trustee with foreign
exchange dealers acting as principals on a spot (i.e., cash) buying
basis. Although foreign exchange dealers trade on a net basis, they do
realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price
at which they are willing to sell the currency (offer price).
Litigation
Tobacco Industry. Certain of the issuers of Securities in certain Trusts
may be involved in the manufacture, distribution and sale of tobacco
products. Pending litigation proceedings against such issuers in the
United States and abroad cover a wide range of matters including product
liability and consumer protection. Damages claimed in such litigation
alleging personal injury (both individual and class actions), and in
health cost recovery cases brought by governments, labor unions and
similar entities seeking reimbursement for health care expenditures,
aggregate many billions of dollars.
In November 1998, certain companies in the U.S. tobacco industry entered
into a negotiated settlement with several states which would result in
the resolution of significant litigation and regulatory issues affecting
the tobacco industry generally. The proposed settlement, while extremely
costly to the tobacco industry, would significantly reduce uncertainties
facing the industry and increase stability in business and capital
markets. Future litigation and/or legislation could adversely affect the
value, operating revenues and financial position of tobacco companies.
The Sponsor is unable to predict the outcome of litigation pending
against tobacco companies or how the current uncertainty concerning
regulatory and legislative measures will ultimately be resolved. These
and other possible developments may have a significant impact upon both
the price of such Securities and the value of Units of Trusts containing
such Securities.
Concentrations
Banks and Thrifts. Certain Trusts may be considered to be concentrated
in common stocks of financial institutions. See "Risk Factors" in the
prospectus which will indicate, if applicable, a Trust's concentration
in this industry. 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 10
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 Trust's portfolio cannot be predicted
with certainty. Periodic efforts by recent Administrations to introduce
legislation broadening the ability of banks to compete with new products
have not been successful, but if enacted could lead to more failures as
a result of increased competition and added risks. Failure to enact such
legislation, on the other hand, may lead to declining earnings and an
inability to compete with unregulated financial institutions. 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 which 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. Starting in mid-1997, banks were 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. In late 1993 the United States Treasury Department
proposed a restructuring of the banks regulatory agencies which, if
implemented, may adversely affect certain of the Securities in the
Trust's portfolio. 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 a
Trust's portfolio. 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 a Trust's portfolio.
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
Page 11
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.
Petroleum Refining Companies. Certain Trusts may be considered to be
concentrated in common stocks of companies engaged in refining and
marketing oil and related products. See "Risk Factors" in the prospectus
which will indicate, if applicable, the Trust's concentration in the
petroleum industry. According to the U.S. Department of Commerce, the
factors which will most likely shape the industry include the price and
availability of oil from the Middle East, changes in United States
environmental policies and the continued decline in U.S. production of
crude oil. Possible effects of these factors may be increased U.S. and
world dependence on oil from the Organization of Petroleum Exporting
Countries ("OPEC") and highly uncertain and potentially more volatile
oil prices. Factors which the Sponsor believes may increase the
profitability of oil and petroleum operations include increasing demand
for oil and petroleum products as a result of the continued increases in
annual miles driven and the improvement in refinery operating margins
caused by increases in average domestic refinery utilization rates. The
existence of surplus crude oil production capacity and the willingness
to adjust production levels are the two principal requirements for
stable crude oil markets. Without excess capacity, supply disruptions in
some countries cannot be compensated for by others. Surplus capacity in
Saudi Arabia and a few other countries and the utilization of that
capacity prevented during the Persian Gulf crisis, and continues to
prevent, severe market disruption. Although unused capacity contributed
to market stability in 1990 and 1991, it ordinarily creates pressure to
overproduce and contributes to market uncertainty. The likely
restoration of a large portion of Kuwait and Iraq's production and
export capacity over the next few years 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
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
Page 12
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 significantly to affect production, the concomitant volatility
of crude oil prices and increasing public and governmental concern over
air emissions, waste product disposal, fuel quality and the
environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Trusts.
Real Estate Companies. Certain Portfolios are considered to be
concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sales and other related
activities. See "Risk Factors" in the prospectus which will indicate, if
applicable, a Trust's concentration in this industry. Investment in
securities issued by these real estate companies should be made with an
understanding of the many factors which may have an adverse impact on
the credit quality of the particular company or industry. Generally,
these include economic recession, the cyclical nature of real estate
markets, competitive overbuilding, unusually adverse weather conditions,
changing demographics, changes in governmental regulations (including
tax laws and environmental, building, zoning and sales regulations),
increases in real estate taxes or costs of material and labor, the
inability to secure performance guarantees or insurance as required, the
unavailability of investment capital and the inability to obtain
construction financing or mortgage loans at rates acceptable to builders
and purchasers of real estate. Additional risks include an inability to
reduce expenditures associated with a property (such as mortgage
payments and property taxes) when rental revenue declines, and possible
loss upon foreclosure of mortgaged properties if mortgage payments are
not paid when due.
REITs are financial vehicles that have as their objective the pooling of
capital from a number of investors in order to participate directly in
real estate ownership or financing. REITs are generally fully integrated
operating companies that have interests in income-producing real estate.
REITs are differentiated by the types of real estate properties held and
the actual geographic location of properties and fall into two major
categories: equity REITs emphasize direct property investment, holding
their invested assets primarily in the ownership of real estate or other
equity interests, while mortgage REITs concentrate on real estate
financing, holding their assets primarily in mortgages secured by real
estate. REITs obtain capital funds for investment in underlying real
estate assets by selling debt or equity securities in the public or
institutional capital markets or by bank borrowing. Thus, the returns on
common equities of the REITs in which the Trust invests will be
significantly affected by changes in costs of capital and, particularly
in the case of highly "leveraged" REITs (i.e., those with large amounts
of borrowings outstanding), by changes in the level of interest rates.
The objective of an equity REIT is to purchase income-producing real
estate properties in order to generate high levels of cash flow from
rental income and a gradual asset appreciation, and they typically
invest in properties such as office, retail, industrial, hotel and
apartment buildings and healthcare facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
The underlying value of the Securities and a Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
Page 13
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in a Trust.
The value of the REITs may at times be particularly sensitive to
devaluation in the event of rising interest rates. Equity REITs are less
likely to be affected by interest rate fluctuations than mortgage REITs
and the nature of the underlying assets of an equity REIT may be
considered more tangible than that of a mortgage REIT. Equity REITs are
more likely to be adversely affected by changes in the value of the
underlying property it owns than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in a Trust may be
adversely affected by increases or decreases in property tax rates and
assessments or reassessments of the properties underlying the REITs by
taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in a Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in a Trust.
Recently, in the wake of Chinese economic development and reform,
certain Hong Kong real estate companies and other investors began
purchasing and developing real estate in southern China, including
Beijing, the Chinese capital. By 1992, however, southern China began to
experience a rise in real estate prices, increases in construction costs
and a tightening of credit markets. Any worsening of these conditions
could affect the profitability and financial condition of Hong Kong real
estate companies and could have a materially adverse effect on the value
of a Global Target 15 Portfolio.
Retail Companies. Certain Portfolios are considered to be concentrated
in common stocks of retail companies. See "Risk Factors" in the
prospectus which will indicate, if applicable, a Trust's concentration
in this industry. The profitability of companies engaged in the retail
Page 14
industry will be affected by various factors including the general state
of the economy and consumer spending trends. Recently, there have been
major changes in the retail environment due to the declaration of
bankruptcy by some of the major corporations involved in the retail
industry, particularly the department store segment. The continued
viability of the retail industry will depend on the industry's ability
to adapt and to compete in changing economic and social conditions, to
attract and retain capable management, and to finance expansion.
Weakness in the banking or real estate industry, a recessionary economic
climate with the consequent slowdown in employment growth, less
favorable trends in unemployment or a marked deceleration in real
disposable personal income growth could result in significant pressure
on both consumer wealth and consumer confidence, adversely affecting
consumer spending habits. In addition, competitiveness of the retail
industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Technology Companies. Certain Portfolios are considered to be
concentrated in common stocks of technology companies. See "Risk
Factors" in the prospectus which will indicate, if applicable, a Trust's
concentration in this industry.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Securities will be able to respond in
a timely manner to compete in the rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Page 15
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
a Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Small-Cap Companies. While historically small-cap company stocks have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap companies may have
limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
these companies may distribute, sell or produce products which have
recently been brought to market and may be dependent on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Trusts
which contain these Securities to buy and sell significant amounts of
such shares without an unfavorable impact on prevailing market prices.
Portfolios
Equity Securities Selected for The Dow (sm) Target 5 Portfolio
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, explores for, develops and produces crude oil and natural gas;
makes polymers, elastomers, finishes and performance films; makes
specialty fibers and chemicals; produces agricultural products; and
makes electronic materials and medical products. The company
participates in five principal business segments-Petroleum Operations;
Polymers; Fibers; Chemicals; and Diversified Businesses.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
Goodyear Tire & Rubber Company, headquartered in Akron, Ohio, develops,
makes and sells tires and related transportation products; participates
in various crude oil transportation and gathering activities; and makes
various industrial rubber and chemical products.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
Page 16
Equity Securities Selected for The Dow (sm) Target 10 Portfolio
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
Chevron Corporation, headquartered in San Francisco, California, is an
international oil company with activities in the United States and
abroad. The company is involved in worldwide, integrated petroleum
operations which explore for, develop and produce petroleum liquids and
natural gas, as well as transporting the products. The company is also
involved in the mineral and chemical industries.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, explores for, develops and produces crude oil and natural gas;
makes polymers, elastomers, finishes and performance films; makes
specialty fibers and chemicals; produces agricultural products; and
makes electronic materials and medical products. The company
participates in five principal business segments-Petroleum Operations;
Polymers; Fibers; Chemicals; and Diversified Businesses.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
Exxon Corporation, headquartered in Irving, Texas, is principally
involved in the energy industry. The company explores for and produces
crude oil and natural gas, manufactures petroleum products, explores for
and mines coal and minerals and transports and sells crude oil, natural
gas and petroleum products.
General Motors Corporation, headquartered in Detroit, Michigan,
manufactures and sells cars and trucks worldwide under the trademarks
"Chevrolet," "Oldsmobile," "Pontiac," "Buick," "Saturn," "Cadillac" and
"GMC Trucks."
Goodyear Tire & Rubber Company, headquartered in Akron, Ohio, develops,
makes and sells tires and related transportation products; participates
in various crude oil transportation and gathering activities; and makes
various industrial rubber and chemical products.
Minnesota Mining & Manufacturing, headquartered in St. Paul, Minnesota,
manufactures industrial, electronic, health, consumer and information-
imaging products for distribution worldwide. The company's products
include adhesives, abrasives, laser imagers and "Scotch" brand products.
J.P. Morgan & Company, Inc., headquartered in New York, New York, is a
global investment banking firm that serves clients with complex needs
through an integrated range of advisory, financing, trading, investment
and related capabilities.
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
Equity Securities Selected for the Target 25 Portfolio
American Greetings Corporation (Class A), headquartered in Cleveland,
Ohio, designs, makes and sells everyday, seasonal and personalized
greeting cards and other personal communications products such as gift
wrap, paper party goods, stationery, non-prescription reading glasses,
picture frames, giftware, candles and hair accessory items.
Ashland Inc., headquartered in Covington, Kentucky, refines petroleum
products; gathers and transports crude oil and petroleum products;
operates retail gasoline and merchandise stores under the
"SuperAmerica," "Rich" and other brand names; operates quick-lube
outlets under the "Valvoline" name; and distributes industrial chemicals.
ConAgra, Inc., headquartered in Omaha, Nebraska, produces shelf stable
and frozen food products, processed meats, beef, pork, lamb, poultry and
agricultural products and engages in grain processing and merchandising.
Conoco Inc. (Class A), headquartered in Houston, Texas, is an
integrated, global energy company mainly engaged in the exploration,
development, production and sale of crude oil, natural gas and natural
gas liquids; the refining of crude oil and other feedstocks into
petroleum products; and the transportation and distribution of petroleum
products.
Cooper Industries, Inc., headquartered in Houston, Texas, manufactures,
Page 17
markets and sells electrical products, tools and hardware, and
automotive parts. The company's products include compression equipment
for oil and natural gas applications, rotary drilling equipment, mining
and construction machinery, and electrical power transformers.
Dow Chemical Company, headquartered in Midland, Michigan, is a leading
manufacturer and supplier of chemicals, plastic materials and
agricultural products, and other specialized products and services
marketed worldwide.
GenCorp Inc., headquartered in Fairlawn, Ohio, makes extruded and molded
rubber products, vinyl-coated fabrics, vinyl woodgrain laminates,
decorative wallcoverings, tennis balls and racquetballs, styrene and
butadiene-based specialty lattices, plastic films, propulsion systems
and defense electronics.
B.F. Goodrich Company, headquartered in Richfield, Ohio, provides
aircraft systems and services and manufactures performance materials
that are sold to customers worldwide and used in thousands of consumer
and industrial products.
Harris Corporation, headquartered in Melbourne, Florida, through
subsidiaries, researches, develops and produces high-technology systems
for government and commercial organizations, makes data-sheet integrated
circuits and discrete devices, and makes communications equipment. The
company also sells office equipment and business communication products.
Harsco Corporation, headquartered in Camp Hill, Pennsylvania, provides
industrial mill services, scaffolding and railway maintenance services;
and makes railway maintenance, gas control and containment equipment.
The company also produces industrial grating and bridge decking, pipe
fittings, process equipment, slag abrasives and roofing granules.
Kellogg Company, headquartered in Battle Creek, Michigan, makes and
markets ready-to-eat cereals under the "Kellogg's" name; and other
convenience food products including toaster pastries, frozen waffles,
bagels, marshmallow squares and cereal bars.
Louisiana-Pacific Corporation, headquartered in Portland, Oregon, makes
lumber, pulp, structural and other panel products, hardwood veneers, and
cellulose insulation through facilities throughout the United States,
Canada and Ireland.
PPG Industries, Inc., headquartered in Pittsburgh, Pennsylvania, makes
protective and decorative coatings, flat glass, fabricated glass
products, continuous strand fiber glass, and industrial and specialty
chemicals. Markets for the company's products include manufacturing,
construction, automotive and chemical processing.
Phillips Petroleum Company, headquartered in Bartlesville, Oklahoma,
with subsidiaries, refines, transports, and markets crude oil, natural
gas liquids and petroleum products; provides feedstock for the
production of petrochemicals; makes intermediate and finished chemical
products; explores for and produces petroleum liquids; and acquires,
gathers, and processes raw natural gas.
Rayonier Inc., headquartered in Stamford, Connecticut, trades,
merchandises and makes logs, timber and wood products; and produces and
sells high value-added specialty pulps.
Reynolds Metals Company, headquartered in Richmond, Virginia, refines
bauxite into alumina; calcinates petroleum coke; produces prebaked
carbon anodes; makes and distributes various finished aluminum products;
and sells plastic bags and food wraps, and plastic lidding and container
products.
Ryder System, Inc., headquartered in Miami, Florida, provides full
service leasing and short-term rental of trucks, tractors and trailers;
dedicated logistics services; public transit management and student
transportation; and transportation by truck of automobiles and light
trucks.
Snap-on Incorporated, headquartered in Kenosha, Wisconsin, develops,
manufactures and distributes tool and equipment solutions worldwide. The
company's products include hand and power tools, diagnostics and shop
equipment, tool storage products, diagnostics software and other
solutions for the automotive and industrial service industries.
Stanley Works, headquartered in New Britain, Connecticut, makes tools,
hardware, residential door systems and home automation products for the
consumer, industrial and professional markets.
TRW Inc., headquartered in Cleveland, Ohio, provides advanced technology
products and services for the automotive (including occupant safety
systems, automotive electronics and steering systems) and space, defense
and information systems markets (including spacecraft, software, systems
engineering and systems integration.)
Page 18
Texaco Inc., headquartered in White Plains, New York, explores for,
produces, transports, refines and markets crude oil, natural gas and
petroleum products in the United States, Europe and elsewhere throughout
the Eastern and Western Hemispheres.
Thomas & Betts Corporation, headquartered in Memphis, Tennessee,
designs, makes and sells, on a global basis, electrical and electronic
connectors and components, as well as other related products and
accessories for construction and original equipment manufacturer
markets. Products are sold worldwide through electrical, electronic and
HVAC distributors, mass merchandisers, catalogs and home centers.
True North Communications Inc., headquartered in Chicago, Illinois,
operates a global advertising and communications business and provides
services to clients in promotion, public relations, public affairs,
direct/database marketing, branding consultancy, graphic arts, sports
marketing, directory advertising and healthcare and multicultural
advertising.
USX-Marathon Group, headquartered in Pittsburgh, Pennsylvania, explores
for, produces, refines, distributes and markets crude oil, natural gas
and petroleum products.
Weyerhaeuser Company, headquartered in Tacoma, Washington, grows and
harvests timber and makes, distributes and sells forest products. The
company also builds and develops houses and apartments; develops
commercial and residential lots; and provides a broad range of financial
services.
Equity Securities Selected for the Target Small-Cap Portfolio
Abacus Direct Corporation, headquartered in Westminster, Colorado,
provides information products and marketing research services to the
direct marketing industry, specifically the catalog industry.
Advantage Learning Systems, Inc., headquartered in Wisconsin Rapids,
Wisconsin, provides learning information systems to kindergarten through
senior high schools in the United States and Canada.
American Freightways Corporation, headquartered in Harrison, Arkansas,
operates as a scheduled common and contract carrier transporting
primarily less-than-truckload shipments of general commodities, serving
the mid-Atlantic, midwestern, southeastern and southwestern states.
Ames Department Stores, Inc., headquartered in Rocky Hill, Connecticut,
with subsidiaries, operates self-service discount department stores
under the "Ames" name in states in the northeast, mid-Atlantic and
midwest regions and District of Columbia.
Ardent Software, Inc., headquartered in Westborough, Massachusetts,
designs, develops, markets, sells and supports software for developing,
deploying, and maintaining business applications and data warehousing
solutions.
E.W. Blanch Holdings, Inc., headquartered in Dallas, Texas, provides
integrated risk management services, including reinsurance intermediary
services, risk management consulting and administration services, and
wholesale insurance services.
CONMED Corporation, headquartered in Utica, New York, provides advanced
electrosurgical systems and electrocardiogram electrodes and
accessories. The company also makes and markets surgical suction
instruments, intravenous therapy accessories and wound care products.
CTS Corporation, headquartered in Elkhart, Indiana, designs, makes and
sells a broad line of electronic components principally serving the
electronic needs of original equipment manufacturers.
DII Group, Inc., headquartered in Longmont, Colorado, through
subsidiaries, provides outsourcing technology solutions to the
electronics industry, including design services, custom semiconductor
production, printed circuit board fabrication, systems assembly and test
services.
Dionex Corporation, headquartered in Sunnyvale, California, with
subsidiaries, develops, makes, markets and services a range of
chromatography systems, sample preparation devices and related products
used by chemists to isolate and quantify the individual components of
complex chemical mixtures in many major industrial, research and
laboratory markets.
Elcor Corporation, headquartered in Dallas, Texas, makes premium
laminated fiberglass asphalt residential roofing products;
remanufactures diesel engine cylinder liners; provides tin plating of
pistons; and applies shielding to computer and electronic equipment.
Foodmaker, Inc., headquartered in San Diego, California, owns, operates
and franchises "Jack In The Box" fast-food restaurants located primarily
in the western United States.
Granite Construction Incorporated, headquartered in Watsonville,
California, provides heavy civil construction services throughout the
Page 19
United States, primarily in the west, southwest and southeast. The
company also owns and leases aggregate reserves and owns construction
materials processing plants and a large heavy construction contractor
equipment fleet.
Hooper Holmes, Inc., headquartered in Basking Ridge, New Jersey,
provides medical and paramedical examinations for applicants seeking
life and health insurance. The company also offers insurance inspection
reports and attending physician statements.
IDEC Pharmaceuticals Corporation, headquartered in San Diego,
California, develops products for the long-term management of immune
system cancers and autoimmune and inflammatory diseases.
InterVoice, Inc., headquartered in Dallas, Texas, develops, sells and
services interactive voice response systems, which allow individuals to
access a computer database using telephones, personal computers, credit
card terminals or their voices.
Kronos Incorporated, headquartered in Waltham, Massachusetts, designs,
develops, makes and markets time and attendance, workforce management
and shop floor data collection systems, and application software that
enhances productivity in the workplace.
Labor Ready, Inc., headquartered in Tacoma, Washington, provides
temporary manual labor, specializing primarily in construction, light
industry and small business markets in the United States and Canada.
MemberWorks Incorporated, headquartered in Stamford, Connecticut,
designs and provides membership service programs which offer selected
products and services from a variety of vendors intended to enhance the
existing relationships between businesses and consumers.
Methode Electronics, Inc. (Class A), headquartered in Chicago, Illinois,
with subsidiaries, makes electronic components and devices that connect,
convey and control electrical energy, pulse and signal, including
connectors, automotive components, interconnect devices, printed
circuits and current carrying distribution systems.
Metro Networks, Inc., headquartered in Houston, Texas, provides traffic,
local news, sports, weather and other information reporting services to
the television and radio broadcast industries in over 80 markets
nationally and services radio and television station affiliates in six
countries.
Micromuse Inc., headquartered in San Francisco, California, develops,
markets and supports a family of scaleable, highly configurable, rapidly
deployable, software solutions for the effective monitoring and
management of multiple elements underlying an enterprise's information
technology infrastructure.
Monaco Coach Corporation, headquartered in Coburg, Oregon, makes a line
of premium motor coaches, bus conversions and towable recreational
vehicles designed to appeal to customers seeking superior driving
performance and luxurious accommodations. Products are sold to
independent dealers throughout the United States and Canada.
NVR, Inc., headquartered in McLean, Virginia, builds, sells and finances
new single family homes, townhomes and condominium buildings in
metropolitan areas in 10 states and Washington, D.C. The company also
provides financial services, including mortgage banking operations in 15
states.
Penske Motorsports, Inc., headquartered in Detroit, Michigan, through
subsidiaries, owns and operates four motorsport speedways in Michigan,
California, North Carolina and Pennsylvania. The company also makes and
markets related merchandise and distributes Goodyear brand racing tires.
Perclose, Inc., headquartered in Menlo Park, California, designs,
develops, makes and markets minimally invasive medical devices that
automate the delivery of needles and sutures for the surgical closure or
connection of blood vessels.
Pervasive Software Inc., headquartered in Austin, Texas, provides
embedded database software designed to enable the cost-effective
development, deployment and support of low-maintenance, packaged
client/server applications.
Pinnacle Systems, Inc., headquartered in Mountain View, California,
designs, makes, markets and supports video post-production tools for
high quality real time video processing, including the addition of
special effects, graphics and titles to multiple streams of live or
previously recorded video material.
Playboy Enterprises, Inc. (Class B), headquartered in Chicago, Illinois,
publishes Playboy magazine; develops, produces and distributes
programming for domestic pay television, international television and
worldwide home video markets; and markets merchandise bearing the
Playboy name and related trademarks.
Plexus Corporation, headquartered in Neenah, Wisconsin, through
Page 20
subsidiaries, offers contract development, design, manufacturing and
test services mainly to original equipment manufacturers in the computer
(mainly mainframes and peripherals), medical, industrial,
telecommunications and transportation electronics industries.
Polycom, Inc., headquartered in San Jose, California, develops, makes
and markets teleconferencing products that facilitate meetings at a
distance. The company's products are distributed and serviced globally.
Profit Recovery Group International, Inc. (Class A), headquartered in
Atlanta, Georgia, provides accounts payable and other audit recovery
services to large retailers and other transaction-intensive companies.
Project Software & Development, Inc., headquartered in Bedford,
Massachusetts, develops, markets and supports applications software used
by businesses, government agencies and other organizations to assist
them in maintaining and developing high-value capital assets such as
facilities, plants and production equipment.
ResMed Inc., headquartered in San Diego, California, makes and
distributes medical equipment for the treatment of sleep disordered
breathing related respiratory conditions. The company sells a
comprehensive range of treatment and diagnostic devices.
Sawtek Inc., headquartered in Apopka, Florida, designs, makes and
markets a broad range of electronic signal processing components based
on surface acoustic wave technology used in digital wireless systems,
digital microwave radios, wireless local area networks, cable television
equipment and a variety of defense and satellite systems.
Tarrant Apparel Group, headquartered in Los Angeles, California,
designs, merchandises, contracts for the manufacture of and sells
casual, moderately priced apparel, mainly for women, under private label.
TriQuint Semiconductor, Inc., headquartered in Hillsboro, Oregon,
develops, manufactures and markets a broad range of high-performance
analog and mixed-signal integrated circuits for the wireless
communications, telecommunications and computing markets.
Unitrode Corporation, headquartered in Merrimack, New Hampshire, makes
and sells analog/linear and mixed-signal integrated circuits for power
management and power control applications, conversion of digital signals
to analog signals and vice versa, interface and communication between
different pieces of electronic equipment, and switching power supplies.
Urban Outfitters, Inc., headquartered in Philadelphia, Pennsylvania,
owns and operates retail stores in metropolitan areas throughout the
United States which sell fashion apparel, accessories, and household and
gift merchandise.
Zomax Incorporated, headquartered in Plymouth, Minnesota, provides high
quality compact discs, cassettes, diskettes and related services such as
packaging design, graphics design, printing, packaging, warehousing and
shipping services.
Equity Securities Selected for the Global Target 15 Portfolio
Dow Jones Industrial Average (SM)
Caterpillar Inc., headquartered in Peoria, Illinois, makes earthmoving,
construction and materials handling machinery and equipment and diesel
engines; and provides various financial products and services.
E.I. du Pont de Nemours & Company, headquartered in Wilmington,
Delaware, explores for, develops and produces crude oil and natural gas;
makes polymers, elastomers, finishes and performance films; makes
specialty fibers and chemicals; produces agricultural products; and
makes electronic materials and medical products. The company
participates in five principal business segments-Petroleum Operations;
Polymers; Fibers; Chemicals; and Diversified Businesses.
Eastman Kodak Company, headquartered in Rochester, New York, develops,
makes and sells consumer and commercial photographic imaging products.
The company's products include films, photographic papers and chemicals,
cameras, projectors, processing equipment, audiovisual equipment,
copiers, microfilm products, applications software, printers and other
equipment.
Goodyear Tire & Rubber Company, headquartered in Akron, Ohio, develops,
makes and sells tires and related transportation products; participates
in various crude oil transportation and gathering activities; and makes
various industrial rubber and chemical products.
Page 21
Philip Morris Companies, Inc., headquartered in New York, New York, is
the world's largest producer and marketer of consumer packaged goods.
Its five principal operating companies are Kraft Foods, Inc., Miller
Brewing Company, Philip Morris International Inc., Philip Morris U.S.A.
and Philip Morris Capital Corporation.
Financial Times Industrial Ordinary Share Index
Blue Circle Industries Plc, through subsidiaries, makes and sells heavy
building materials including cement, concrete and aggregates, and
heating and bathroom products. The company also manages real estate and
develops commercial and residential properties.
British Airways Plc operates international and domestic scheduled
passenger airline services, as well as a worldwide air cargo business.
The company is one of the largest airlines in the world.
EMI Group Plc is a music recording and retailing company that owns the
"Capitol," "EMI" and "Virgin" record labels.
Marks & Spencer Plc retails consumer goods and food under the name "St.
Michael." The company sells quality clothing through "Brooks Brothers"
stores in the United States and Japan, sells food through its "Kings
Super Markets" in the United States, and other merchandise through a
chain of retail stores in Canada, Europe and Hong Kong. The company is
also engaged in financial, unit trust, treasury and insurance businesses.
Tate & Lyle Plc is the holding company for an international group of
companies which manufacture, refine, process, distribute and trade
sweeteners, starches and their by-products. Products include white
sugar, molasses and low calorie sweeteners. The company also
manufactures and sells engineered sugar milling equipment and provides
reinsurance services.
Hang Seng Index
Amoy Properties Ltd. is a property investment company. The company's
principal activities are property investment and investment holding, and
through its subsidiaries, property investment for rental income, car
park management and property management.
Great Eagle Holdings Ltd. is an investment holding company with
subsidiaries active in property development, investment and management;
hotel and restaurant operations; provision of management and maintenance
services; financing and insurance operations.
Henderson Investment Ltd. is an investment holding company. The
principal activities of its subsidiaries are property development and
investment, investment holding, retailing and the hotel business.
Hong Kong Telecommunications Ltd. provides telecommunications, computer,
engineering and other services, primarily in Hong Kong.
Hysan Development Co. Ltd. is an investment holding company with
subsidiaries in the field of property investment, property development
and capital market investment. The company's profits mainly come from
commercial rental income and luxury residential property located in Hong
Kong.
Equity Securities Selected for the European Target 20 Portfolio
ABN AMRO Holding NV, headquartered in Amsterdam, the Netherlands,
provides full-service banking operations both in the Netherlands and
worldwide.
Abbey National Plc, headquartered in London, England, offers personal
banking services through its locations in the United Kingdom, France,
Gibraltar, Italy, Spain and other countries worldwide.
BASF AG, headquartered in Ludwigshafen, Germany, is listed as a chemical
producing group. Its main fields of business are health and nutrition,
colorants and finishing products, chemicals, plastics and fibers, and
oil and gas.
Bayer AG, headquartered in Leverkusen, Germany, manufactures industrial
chemicals and polymers, as well as human and animal healthcare products,
pharmaceuticals and agricultural crop protection agents. The company
markets its products to the automotive, electronic, medical,
construction, farming, textile, utility and printing industries worldwide.
British American Tobacco Plc, headquartered in London, England, is the
holding company for a group of tobacco product manufacturers whose
international brands include "State Express 555," "Lucky Strike," "Kent"
and "Benson & Hedges."
Page 22
CGU Plc, headquartered in London, England, is the holding company for
Commercial Union Assurance Company Plc, an international life and
property-casualty insurance operation. Through its subsidiary, the
company transacts all classes of insurance and life assurance excluding
industrial life. The company also does business in property investment
and development, loans and mortgages.
Commerzbank AG, headquartered in Frankfurt, Germany, provides a wide
range of banking services to private and business customers. The bank
offers international commercial banking, export finance, corporate
banking, treasury and foreign exchange, investment and loan management
services.
DaimlerChrysler AG, headquartered in Stuttgart, Germany, designs,
manufactures and markets automobiles and other vehicles worldwide. The
company also provides electronics and telecommunications services as
well as aerospace, defense and financial services.
Diageo Plc, headquartered in London, England, has operations in food,
alcoholic beverages, fast food restaurants and property management. The
company markets food products under the "Pillsbury," "Haagen Dazs," and
"Green Giant" brand names; and liquor and beer products under the
"Smirnoff," "J&B Rare," "Johnnie Walker," "Jose Cuervo," "Baileys,"
"Harp" and "Guinness Stout" names. The company also owns "Burger King"
restaurants.
ENI SpA, headquartered in Rome, Italy, explores for, distributes,
refines and markets petroleum products through its operations in 80
countries. The company also provides offshore oil and gas pipelaying
services.
Electrabel SA, headquartered in Brussels, Belgium, is a private utility
company active in two fields: electricity generation and transmission,
and operation and management of networks for public-utility services
including electricity, natural gas, cable television, steam and water.
The company maintains partnerships with major industrial consumers and
governments in Belgium and in other European countries.
HSBC Holdings Plc, headquartered in London, England, is the holding
company for the HSBC Group. The group is an international banking and
financial services organization with operations in the Asia-Pacific
region, Europe, the Middle East and the Americas. Services provided
include retail and corporate banking, trade, trustee, securities,
custody, capital markets and treasury services, private and investment
banking and insurance.
Halifax Plc, headquartered in Halifax, England, provides a full range of
personal financial services throughout the United Kingdom.
Iberdrola SA, headquartered in Bilbao, Spain, produces, transmits and
distributes electrical power within Spain and offers engineering, real
estate and telecommunications services.
Marks & Spencer Plc, headquartered in London, England, retails consumer
goods and food under the name "St. Michael." The company sells quality
clothing through "Brooks Brothers" stores in the United States and
Japan, sells food through its "Kings Super Markets" in the United
States, and other merchandise through a chain of retail stores in
Canada, Europe and Hong Kong. The company is also engaged in financial,
unit trust, treasury and insurance businesses.
National Westminster Bank Plc, headquartered in London, England,
provides worldwide corporate and investment banking, asset management
and financial services to both domestic and international markets.
Repsol SA, headquartered in Madrid, Spain, through subsidiaries,
explores for, develops and produces crude oil products and natural gas,
transports petroleum products and liquefied petroleum gas (LPG) and
refines petroleum. The company also produces a variety of petrochemicals
and markets petroleum products, petroleum derivatives, LPG and natural
gas.
Rio Tinto Plc, headquartered in London, England, is an international
mining company with operations in Australia, Canada, Europe, New
Zealand, South Africa, South America and the United States.
Royal Dutch Petroleum Company, headquartered in The Hague, the
Netherlands, owns 60% of the Royal Dutch/Shell Group of companies. These
companies are involved in all phases of the petroleum industry from
exploration to financial processing and delivery.
San Paolo-IMI SpA, headquartered in Turin, Italy, operates as a
commercial bank in Italy and abroad and is the holding company of a
diversified financial group which includes municipal lender "Crediop."
Page 23
Equity Securities Selected for the S&P Target 10 Portfolio
Alcoa Inc., headquartered in Pittsburgh, Pennsylvania, makes primary
aluminum and fabricated products for the transportation, construction,
packaging and other markets.
Electronic Data Systems Corporation, headquartered in Plano, Texas,
offers a full range of information technology services to enterprises,
government entities and individuals worldwide. Services include
management consulting, systems development, systems integration, systems
management and process management.
FDX Corporation, headquartered in Memphis, Tennessee, provides a wide
range of express services for the time-definite transportation of
documents, packages and freight throughout the world using an extensive
fleet of aircraft and vehicles and leading-edge information technologies.
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.
PECO Energy Company, headquartered in Philadelphia, Pennsylvania,
supplies retail electricity and natural gas in southeastern Pennsylvania
and, through pilot programs, natural gas service to areas in Maryland
and New Jersey. The company also markets electricity wholesale on a
national basis.
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.
Staples, Inc., headquartered in Westborough, Massachusetts, operates
office superstores throughout the United States and Canada which provide
office supplies, business machines, computers and related products,
office furniture and other business-related products.
Tricon Global Restaurants, Inc., headquartered in Louisville, Kentucky,
operates quick service restaurants in 103 countries and territories,
including "KFC," "Pizza Hut" and "Taco Bell" restaurants.
Wal-Mart Stores, Inc., headquartered in Bentonville, Arkansas, is the
largest retailer in the United States measured by total revenues. The
company operates "Wal-Mart" retail discount department stores, "Wal-Mart
Supercenters" and "Sam's" wholesale clubs in the United States, Brazil,
Canada, China, Germany, Mexico and Puerto Rico.
Walgreen Co., headquartered in Deerfield, Illinois, operates a
nationwide chain of retail "Walgreens" drugstores in 34 states and
Puerto Rico. The company also operates two mail-order facilities.
Equity Securities Selected for the Nasdaq Target 15 Portfolio
Adobe Systems Incorporated, headquartered in San Jose, California,
develops, markets and supports computer software products and
technologies that enable users to express and use information across all
print and electronic media.
Altera Corporation, headquartered in San Jose, California, develops and
markets CMOS (complementary metal oxide semiconductor) programmable
logic integrated circuits and associated engineering development
software and hardware.
Amgen Inc., headquartered in Thousand Oaks, California, a global
biotechnology concern, 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.
Apple Computer, Inc., headquartered in Cupertino, California, designs,
makes and markets microprocessor-based personal computers and related
personal computing and communicating solutions for sale mainly to
education, creative, home, business and government customers.
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.
CMGI Inc., headquartered in Andover, Massachusetts, invests in and
develops Internet companies and operates direct marketing companies and
venture funds focused on the Internet.
CNET, Inc., headquartered in San Francisco, California, operates a media
company integrating television programming with a network of channels on
Page 24
the World Wide Web. The company produces five television programs and
operates an Internet network focused on computers and technologies.
Centocor, Inc., headquartered in Malvern, Pennsylvania, develops and
commercializes monoclonal antibodies and DNA-based products to treat
cardiovascular, infectious and autoimmune diseases and cancer.
Comverse Technology, Inc., headquartered in Woodbury, New York, makes
and sells computer and telecommunications systems for multimedia
communications and information processing applications. The company's
products are used by telephone network operators, government agencies,
call centers, financial institutions and other public and commercial
organizations worldwide.
Electronics for Imaging, Inc., headquartered in San Mateo, California,
designs and sells a range of color processing and printing solutions,
including application and system software that facilitate color
correction and device-independent color management, and color servers
that enable short production run color printing in an office environment.
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.
Sanmina Corporation, headquartered in San Jose, California, makes
complex printed circuit board assemblies, custom-designed backplane
assemblies and subassemblies, multilayer printed circuit boards and
custom cable and wire harness assemblies. The company also tests and
assembles electronic sub-systems and systems.
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.
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.
Xilinx, Inc., headquartered in San Jose, California, designs, develops
and sells complementary metal-oxide-silicon (CMOS) programmable logic
devices and related design software, including field programmable gate
arrays and erasable programmable logic devices.
We have obtained the foregoing company descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Page 25
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 334, 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; and FT 286
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 334, has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on May 28, 1999.
FT 334
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
Robert D. Van Kampen Director )
of Nike Securities )
Corporation, the ) May 28, 1999
General Partner of )
Nike Securities L.P.)
)
David J. Allen Director of )
Nike Securities ) Robert M. Porcellino
Corporation, the ) Attorney-in-Fact**
General Partner of )
Nike Securities L.P.)
* 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 May 28, 1999 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-73343) and related Prospectus of FT 334.
ERNST & YOUNG LLP
Chicago, Illinois
May 28, 1999
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 Series 334 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. 33-42755] 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).
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
MEMORANDUM
FT 334
File No. 333-73343
The Prospectus and the Indenture filed with Amendment No. 2
of the Registration Statement on Form S-6 have been revised to
reflect information regarding the execution of the Indenture and
the deposit of Securities on May 28, 1999 and to set forth
certain statistical data based thereon. In addition, there are a
number of other changes described below.
THE PROSPECTUS
Cover Page The date of the Trusts has been added.
Pages 3-4 The following information for the Trusts appears:
The Aggregate Value of Securities initially
deposited have been added.
The initial number of units of the Trusts
Sales charge
The Public Offering Price per Unit as of the
business day before the Initial Date of Deposit
The Mandatory Termination Date has been added.
Page 7 The Report of Independent Auditors has been
completed.
Pages 8-9 The Statements of Net Assets have been completed.
Pages 10-17 The Schedules of Investments have been completed.
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect
the execution thereof.
CHAPMAN AND CUTLER
May 28, 1999
FT 334
TRUST AGREEMENT
Dated: May 28, 1999
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank, as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions
of Trust for The First Trust Special Situations Trust, Series 22
and certain subsequent Series, Effective November 20, 1991"
(herein called the "Standard Terms and Conditions of Trust"), and
such provisions as are incorporated by reference constitute a
single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR THE DOWsm TARGET 5 PORTFOLIO, JUNE 1999 SERIES ("TARGET 5
TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0000 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR THE DOWsm TARGET 10 PORTFOLIO, JUNE 1999 SERIES ("TARGET 10
TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0000 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TARGET 25 PORTFOLIO, JUNE 1999 SERIES
("TARGET 25 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TARGET SMALL-CAP PORTFOLIO, JUNE 1999 SERIES
("TARGET SMALL-CAP TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR GLOBAL TARGET 15 PORTFOLIO, JUNE 1999 SERIES
("GLOBAL TARGET 15 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR EUROPEAN TARGET 20 PORTFOLIO, JUNE 1999 SERIES
("EUROPEAN TARGET 20 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR THE S&P TARGET 10 PORTFOLIO, JUNE 1999 SERIES
("S&P TARGET 10 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR THE NASDAQ TARGET 15 PORTFOLIO, JUNE 1999 SERIES
("NASDAQ TARGET 15 TRUST")
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0025 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is May 28,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. The Depositors compensation for providing bookkeeping
and other administrative services as described in Section 3.14 of
the Standard Terms and Conditions of Trust shall be an annual fee
in the amount of $.0010 per Unit.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 24 shall include FT 334.
B. Notwithstanding anything to the contrary in the
Prospectus, parties to the trust agreement are hereby advised:
The Trusts are not sponsored, endorsed, sold or
promoted by Dow Jones & Company, Inc. ("Dow Jones"). Dow
Jones makes no representation or warranty, express or
implied, to the owners of the Trusts or any member of the
public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Jones' only
relationship to the Sponsor is the licensing of certain
trademarks, trade names and service marks of Dow Jones and
of the Dow Jones Industrial AverageSM , which is determined,
composed and calculated by Dow Jones without regard to the
Sponsor or the Trusts. Dow Jones has no obligation to take
the needs of the Sponsor or the owners of the Trusts into
consideration in determining, composing or calculating to
Dow Jones Industrial AverageSM. Dow Jones is not
responsible for and has not participated in the
determination of the timing of, prices at, or quantities of
the Trusts to be issued or in the determination or
calculation of the equation by which the Trusts are to be
converted into cash. Dow Jones has no obligation or
liability in connection with the administration, marketing
or trading of the Trusts.
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE DOW JONES INDUSTRIAL AVERAGESM OR ANY
DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW
JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE DOW JONES
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW
JONES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW JONES
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES
HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED
OF THE POSSIBILITY THEREOF.
C. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
D. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
E. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
F. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
G. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
H. Section 1.01(27) shall be added to read as follows:
"(27) The "Rollover Notification Date" shall be
defined as set forth in the Prospectus under "Summary of
Essential Information."
I. Section 1.01(28) shall be added to read as follows:
"(28) The term "Rollover Distribution" shall be
defined as set forth in Section 5.05, herein."
J. Section 1.01(29) shall be added to read as follows:
"(29) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.05 herein."
K. Section 1.01(30) shall be added to read as follows:
"(30) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information."
L. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit. Cash represented by a foreign currency shall
be replicated in such currency or, if the Trustee has
entered into a contract for the conversion thereof, in U.S.
dollars in an amount replicating the dollars to be received
on such conversion."
M. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for
any Letter(s) of Credit deposited with the Trustee in
connection with the deposits described in Section 2.01(a)
and (b) cash in an amount sufficient to satisfy the
obligations to which the Letter(s) of Credit relates. Any
substituted Letter(s) of Credit shall be released by the
Trustee."
N. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligation requires settlement in
a foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of the
Contract Obligation and cash or a Letter of Credit in U.S.
dollars sufficient to perform such foreign exchange
contact."
O. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
P. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the conclusion of the
primary offering period (as certified by the Depositor to
the Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust in an amount certified to the Trustee
by the Depositor. In no event shall the amount paid by the
Trustee to the Depositor for the Depositors reimbursable
expenses of organizing the Trust exceed the estimated per
Unit amount of organization costs set forth in the
Prospectus for the Trust multiplied by the number of Units
of the Trust outstanding at the conclusion of the primary
offering period; nor shall the Depositor be entitled to or
request reimbursement for expenses of organizing the Trust
incurred after the conclusion of the primary offering
period. If the cash balance of the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, sell Securities identified by the
Depositor, or distribute to the Depositor Securities having
a value, as determined under Section 4.01 as of the date of
distribution, sufficient for such reimbursement. Securities
sold or distributed to the Depositor to reimburse the
Depositor pursuant to this Section shall be sold or
distributed by the Trustee, to extent practicable, in the
percentage ratio then existing. The reimbursement provided
for in this section shall be for the account of the Unit
holders of record at the conclusion of the primary offering
period. Any assets deposited with the Trustee in respect of
the expenses reimbursable under this Section 3.01 shall be
held and administered as assets of the Trust for all
purposes hereunder. The Depositor shall deliver to the
Trustee any cash identified in the Statement of Net Assets
of the Trust included in the Prospectus not later than the
expiration of the Delivery Period and the Depositors
obligation to make such delivery shall be secured by the
letter of credit deposited pursuant to Section 2.01. Any
cash which the Depositor has identified as to be used for
reimbursement of expenses pursuant to this Section 3.01
shall be held by the Trustee, without interest, and reserved
for such purpose and, accordingly, prior to the conclusion
of the primary offering period, shall not be subject to
distribution or, unless the Depositor otherwise directs,
used for payment of redemptions in excess of the per Unit
amount payable pursuant to the next sentence. If a Unit
holder redeems Units prior to the conclusion of the primary
offering period, the Trustee shall pay to the Unit holder,
in addition to the Redemption Value of the tendered Units,
unless otherwise directed by the Depositor, an amount equal
to the estimated per Unit cost of organizing the Trust set
forth in the Prospectus, or such lower revision thereof most
recently communicated to the Trustee by the Depositor
pursuant to Section 5.01, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in
the Trust is insufficient for such payment, the Trustee
shall have the power to sell Securities in accordance with
Section 5.02. As used herein, the Depositor's reimbursable
expenses of organizing the Trust shall include the cost of
the initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses.
Q. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
R. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
S. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
T. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
U. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Income Account or,
to the extent funds are not available in such Account, from
the Capital Account and pay to the Depositor the amount that
it is entitled to receive pursuant to Section 3.14.
V. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
W. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in the amount of $.0025 per Unit,
calculated based on the largest number of Units outstanding
during the calendar year except during the initial offering
period as determined in Section 4.01 of this Indenture, in
which case the fee is calculated based on the largest number
of Units outstanding during the period for which the
compensation is paid (such annual fee to be pro rated for
any calendar year in which the Portfolio Supervisor provides
services during less than the whole of such year). Such fee
may exceed the actual cost of providing such portfolio
supervision services for the Trust, but at no time will the
total amount received for portfolio supervision services
rendered to unit investment trusts of which Nike Securities
L.P. is the sponsor in any calendar year exceed the
aggregate cost to the Portfolio Supervisor of supplying such
services in such year."
X. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in the per Unit amount set forth in Part II of the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the
initial offering period as determined in Section 4.01 of
this Indenture, in which case the fee is calculated based on
the largest number of Units outstanding during the period
for which the compensation is paid (such annual fee to be
pro rated for any calendar year in which the Depositor
provides services during less than the whole of such year).
Such fee may exceed the actual cost of providing such
bookkeeping and administrative services for the Trust, but
at not time will the total amount received for bookkeeping
and administrative services rendered to unit investment
trusts of which Nike Securities L.P. is the sponsor in any
calendar year exceed the aggregate cost to the Depositor of
supplying such services in such year. Such compensation
may, from time to time, be adjusted provided that the total
adjustment upward does not, at the time of such adjustment,
exceed the percentage of the total increase, after the date
hereof, in consumer prices for services as measured by the
United States Department of Labor consumer Price Index
entitled "All Services Less Rent of Shelter" or similar
index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall
not be required for any such adjustment or increase. Such
compensation shall be paid by the Trustee, upon receipt of
an invoice therefor from the Depositor, upon which, as to
the cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against
the Income and Capital Accounts on or before the
Distribution Date following the Monthly Record Date on which
such period terminates. The Trustee shall have no liability
to any Certificateholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
Y. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the
Redemption Price payable to such Unit holder an amount equal
to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus, on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02 less the unpaid portion of the
deferred sales charge. All advances made by the Trustee
pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unit holders."
Z. Notwithstanding anything to the contrary in Sections
3.15 and 4.05 of the Standard Terms and Conditions of Trust, so
long as Nike Securities L.P. is acting as Depositor, the Trustee
shall have no power to remove the Portfolio Supervisor.
AA. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.16:
"Section 3.16. Foreign Currency Exchange. Unless the
Depositor shall otherwise direct, whenever funds are
received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in
respect of a sale of Securities, concurrently with the
contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Trustee shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars
pursuant to the instruction of the Depositor. The Trustee
shall have no liability for any loss or depreciation
resulting from action taken pursuant to such instruction."
BB. Article IV, Section 4.01 of the Standard Terms and
Conditions of Trust is hereby amended in the following manner:
1. Section 4.01(b) is hereby amended by deleting that
portion of the first sentence appearing after the colon and
the entire second sentence and replacing them in their
entirety with the following:
"if the Securities are listed on a national
or foreign securities exchange or The Nasdaq Stock
Market, such Evaluation shall generally be based
on the closing sale price on the exchange or
system which is the principal market therefor,
which shall be deemed to be the New York Stock
Exchange if the Securities are listed thereon
(unless the Evaluator deems such price
inappropriate as a basis for evaluation), or if
there is no closing sale price on such exchange or
system, at the closing ask prices. If the
Securities are not so listed or, if so listed and
the principal market therefor is other than on an
exchange, the evaluation shall generally be based
on the current ask price on the over-the-counter
market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If
current ask prices are unavailable, the evaluation
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) any combination of
the above. If such prices are in a currency other
than U.S. dollars, the Evaluation of such Security
shall be converted to U.S. dollars based on
current offering side exchange rates, unless the
Security is in the form of an American Depositary
Share or Receipt, in which case the Evaluations
shall be based upon the U.S. dollar prices in the
market for American Depositary Shares or Receipts
(unless the Evaluator deems such prices
inappropriate as a basis for valuation). As used
herein, the closing sale price is deemed to mean
the most recent closing sale price on the relevant
securities exchange immediately prior to the
Evaluation time."
2. Section 4.01(c) is hereby deleted and
replaced in its entirety with the following:
"(c) After the initial offering period and
both during and after the initial offering period,
for purposes of the Trust Fund Evaluations
required by Section 5.01 in determining Redemption
Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section
4.01(b), on the basis of current bid prices for
Zero Coupon Obligations (if any),the bid side
value of the relevant currency exchange rate
expressed in U.S. dollars and, except in those
cases in which the Equity Securities are listed on
a national or foreign securities exchange or The
Nasdaq Stock Market and the closing sale prices
are utilized, on the basis of the current bid
prices of the Equity Securities. In addition, the
Evaluator shall reduce the Evaluation of each
Security by the amount of any liquidation costs
(other than brokerage costs incurred on any
national securities exchange) and any capital
gains or other taxes which would be incurred by
the Trust upon the sale of such Security, such
taxes being computed as if the Security were sold
on the date of the Evaluation."
CC. The first sentence of Section 4.03. shall be amended to
read as follows:
"As compensation for providing evaluation services under
this Indenture, the Evaluator shall receive, in arrears, against
a statement or statements therefor submitted to the Trustee
monthly or annually an aggregate annual fee equal to the amount
specified as compensation for the Evaluator in the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the initial
offering period as determined in Section 4.01 of this Indenture,
in which case the fee is calculated based on the largest number
of Units outstanding during the period for which the compensation
is paid (such annual fee to be pro rated for any calendar year in
which the Evaluator provides services during less than the whole
of such year). Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does not, at
the time of such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for services
as measured by the United States Department of Labor Consumer
Price Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such compensation
shall be paid by the Trustee, upon receipt of invoice therefor
from the Evaluator, upon which, as to the cost incurred by the
Evaluator of providing services hereunder the Trustee may rely,
and shall be charged against the Income and/or Capital Accounts,
in accordance with Section 3.05."
DD. Section 5.01 is hereby amended to add the following at
the conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in a foreign currency
shall be reported to the Evaluator who shall convert the
same to U.S. dollars based on current exchange rates, in the
same manner as provided in Section 4.01(b) or 4.01(c), as
applicable, for the conversion of the valuation of foreign
Equity Securities, and the Evaluator shall report such
conversion with each Evaluation made pursuant to Section
4.01."
EE. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organization costs, and (iv)" ; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
"Prior to the payment to the Depositor of its
reimbursable organization costs to be made at the
conclusion of the primary offering period in accordance
with Section 3.01, for purposes of determining the
Trust Fund Evaluation under this Section 5.01, the
Trustee shall rely upon the amounts representing unpaid
accrued organization costs in the estimated amount per
Unit set forth in the Prospectus until such time as the
Depositor notifies the Trustee in writing of a revised
estimated amount per Unit representing unpaid accrued
organization costs. Upon receipt of such notice, the
Trustee shall use this revised estimated amount per
Unit representing unpaid accrued organization costs in
determining the Trust Fund Evaluation but such revision
of the estimated expenses shall not effect calculations
made prior thereto and no adjustment shall be made in
respect thereof."
FF. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the prospectus
Unit holders of the Target 5 Trust, the Target 10 Trust, the
Target 25 Trust, the Target Small-Cap Trust; the S&P Target
10 Trust or The Nasdaq Target 15 Trust may redeem 1,000
Units or more of such Trust and request a distribution in
kind of (i) such Unit holder's pro rata portion of each of
the Securities in such Trust, in whole shares, and (ii) cash
equal to such Unit holder's pro rata portion of the Income
and Capital Accounts as follows: (x) a pro rata portion of
the net proceeds of sale of the Securities representing any
fractional shares included in such Unit holder's pro rata
share of the Securities and (y) such other cash as may
properly be included in such Unit holder's pro rata share of
the sum of the cash balances of the Income and Principal
Accounts in an amount equal to the Unit Value determined on
the basis of a Trust Fund Evaluation made in accordance with
Section 5.01 determined by the Trustee on the date of tender
less amounts determined in clauses (i) and (ii)(x) of this
Section. Subject to Section 5.05 with respect to Rollover
Unit holders, to the extent possible, distributions of
Securities pursuant to an in kind redemption of Units shall
be made by the Trustee through the distribution of each of
the Securities in book-entry form to the account of the Unit
holder's bank or broker-dealer at the Depository Trust
Company. Any distribution in kind will be reduced by
customary transfer and registration charges."
GG. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Target 5
Trust, the Target 10 Trust, the Target 25 Trust, the Target
Small-Cap Trust, the Global Target 15 Trust, The European
Target 20 Trust, The S&P Target 10 Trust, or The Nasdaq
Target 15 Trust (the "New Series"), the Trustee shall, at
the Depositor's sole cost and expense, include in the notice
sent to Unit holders specified in Section 8.02 a form of
election whereby Unit holders, whose redemption distribution
would be in an amount sufficient to purchase at least one
Unit of the New Series, may elect to have their Unit(s)
redeemed in kind in the manner provided in Section 5.02, the
Securities included in the redemption distribution sold, and
the cash proceeds applied by the Distribution Agent to
purchase Units of a New Series, all as hereinafter provided.
The Trustee shall honor properly completed election forms
returned to the Trustee, accompanied by any Certificate
evidencing Units tendered for redemption or a properly
completed redemption request with respect to uncertificated
Units, by its close of business on the Rollover Notification
Date. The notice and form of election to be sent to Unit
holders in respect of any redemption and purchase of Units
of a New Series as provided in this section shall be in such
form and shall be sent at such time or times as the
Depositor shall direct the Trustee in writing and the
Trustee shall have no responsibility therefor. The
Distributions Agent acts solely as disbursing agent in
connection with purchases of Units pursuant to this Section
and nothing herein shall be deemed to constitute the
Distribution Agent a broker in such transactions
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled during the
Special Redemption and Liquidation Period on such date or
dates specified by Depositor. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
redemption date equal to the net asset value (determined on
the basis of the Trust Fund Evaluation as of the redemption
date in accordance with Section 4.01) multiplied by the
number of Units being redeemed (herein called the "Rollover
Distribution"). Any Securities that are made part of the
Rollover Distribution shall be valued for purposes of the
redemption distribution as of the redemption date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent during
the Special Redemption and Liquidation Period specified in
the Prospectus pursuant to the Depositor's direction, and
the Distribution Agent shall, unless directed otherwise by
the Depositor, employ the Depositor as broker in connection
with such sales. For such brokerage services, the Depositor
shall be entitled to compensation at its customary rates,
provided however, that its compensation shall not exceed the
amount authorized by applicable securities laws and
regulations. The Depositor shall direct that sales be made
in accordance with the guidelines set forth in the
Prospectus under the heading "Special Redemption,
Liquidation and Investment in a New Trust." Should the
Depositor fail to provide direction, the Distribution Agent
shall sell the Securities in the manner provided in the
prospectus. The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon completion of all sales of Securities included in
the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of a New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such Trust. Such contract shall
provide for purchase of the maximum number of Units of a New
Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
Units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of a New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of a New Series
will be uncertificated unless and until the Rollover Unit
holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation
resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in
the event the Depositor does not make Units available for
purchase.
(b) Notwithstanding the foregoing, the Depositor may,
in its discretion at any time, decide not to offer any new
Trust Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
HH. Paragraph (e) of Section 6.01 of Article VI of the
Standard Terms and Conditions of Trust is amended to read as
follows:
"(e) (I) Subject to the provisions of subparagraphs
(II) and (III) of this paragraph, the Trustee may employ
agents, sub-custodians, attorneys, accountants and auditors
and shall not be answerable for the default or misconduct of
any such agents, sub-custodians, attorneys, accountants or
auditors if such agents, sub-custodians, attorneys,
accountants or auditors shall have been selected with
reasonable care. The Trustee shall be fully protected in
respect of any action under this Indenture taken or suffered
in good faith by the Trustee in accordance with the opinion
of counsel, which may be counsel to the Depositor acceptable
to the Trustee, provided, however, that this disclaimer of
liability shall not (i) excuse the Trustee from the
responsibilities specified in subparagraph II below or
(ii) limit the obligation of the Trustee to indemnify the
Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the
Trust reimbursable from the Income and Capital Accounts of
the affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of
an eligible foreign custodian (which is employed by the
Trustee as a sub-custodian as contemplated by subparagraph
(I) of this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership Income) the Trust's foreign
securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign securities
transactions, provided that the Trustee hereby agrees to
perform all the duties assigned by rule 17f-5 as now in
effect or as it may be amended in the future, to the boards
of management investment companies. The Trustee's duties
under the preceding sentence will not be delegated.
As used in this subparagraph (II),
(1) "foreign securities" include: securities
issued and sold primarily outside the United States by a
foreign government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the government of the United States or by
any state or any political subdivision thereof or by any
agency thereof or by any entity organized under the laws of
the United States or of any state thereof which have been
issued and sold primarily outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for
the central handling of securities or equivalent book
entries which, by appropriate exemptive order issued by the
Securities and Exchange Commission, have been qualified as
eligible foreign custodians for the Trust but only for so
long as such exemptive order continues in effect: Morgan
Guaranty Trust Company of New York, Brussels, Belgium, in
its capacity as operator of the Euroclear System
("Euroclear"), and Cedel Bank S.A. ("CEDEL").
(b) Any other entity that shall have been
qualified as an eligible foreign custodian for the foreign
securities of the Trust by the Securities and Exchange
Commission by exemptive order, rule or other appropriate
action, commencing on such date as it shall have been so
qualified but only for so long as such exemptive order, rule
or other appropriate action continues in effect.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss occurring as a
result of an eligible foreign custodian's willful
misfeasance, reckless disregard, bad faith, or gross
negligence in performing custodial duties."
II. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be 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, or (ii)"
JJ . The first sentence of the second paragraph of Section
6.04 shall be amended to include the phrase "license fees, if
any," immediately after the reference to legal and auditing
expenses.
KK. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"The Trustee will honor duly executed requests for in-
kind distributions received (accompanied by the electing
Unit holder's Certificate, if issued) by the close of
business ten business days prior to the Mandatory
Termination Date."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
LL. The third sentence of paragraph (a) of Section 6.05 of
the Standard Terms and Conditions of Trust shall be replaced in
its entirety by the following:
"In case at any time the Trustee shall become incapable of
acting, or if a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Trustee in
an involuntary case, or the Trustee shall commence a voluntary
case, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) for the Trustee or for any substantial part of
its property shall be appointed, or the Trustee shall make any
general assignment for the benefit of creditors, or shall
generally fail to pay its debts as they become due, or if the
Sponsor shall determine in good faith that there has occurred
either (1) a material deterioration in the creditworthiness of
the Trustee or (2) one or more negligent acts on the part of the
Trustee having a materially adverse effect, either singly or in
the aggregate, on the Trust or on one or more Trusts of one or
more Funds, such that the replacement of the Trustee is in the
best interests of the Unit holders, the Sponsor may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee so
removed and one copy to the successor trustee."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Senior Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Rosalia Raviele
Vice President
[SEAL]
ATTEST:
Joan Currie
Assistant Treasurer
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 334
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 28, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 334
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 334 in connection with the May 28,
1999 among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P. as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-73343)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 28, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2793
Re: FT 334
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 334 (the "Fund"), in connection with the issuance of units
of fractional undivided interests in the Trusts of said Fund (the
"Trusts"), under a Trust Agreement, dated May 28, 1999 (the
"Indenture"), among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by the Trusts from proceeds of subsequent deposits,
if any, will be made, in accordance with the terms of the
Indenture. Each Trust holds Securities as such term is defined
in the Prospectus. For purposes of this opinion, it is assumed
that each Security is equity for Federal income tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes, but will be governed
by the provisions of subchapter J (relating to trusts) of Chapter
1, Internal Revenue Code of 1986 (the "Code"); each Unit holder
will be considered the owner of a pro rata portion of each of the
assets of a Trust, in the proportion that the number of Units
held by him bears to the total number of Units outstanding; under
Subpart E, Subchapter J of Chapter 1 of the Code, income of a
Trust will be treated as income of the Unit holders in the
proportion described above; and an item of Trust income will have
the same character in the hands of a Unit holder as it would have
in the hands of the Trustee. Each Unit holder will be considered
to have received his pro rata share of income derived from each
Trust asset when such income is considered to be received by the
Trust. For Federal income tax purposes, a Unit holder's pro rata
portion of distributions of cash or property by a corporation
with respect to a Security ("dividends" as defined by Section 316
of the Code) are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." A
Unit holder's pro rata portion of dividends which exceeds such
current and accumulated earnings and profits will first reduce a
Unit holder's tax basis in such Security, and to the extent that
such dividends exceed a Unit holder's tax basis in such Security,
shall be treated as gain from the sale or exchange of property.
II. The price a Unit holder pays for his Units generally
including sales charges, is allocated among his pro rata portion
of each Security held by such Trust (in proportion to the fair
market values thereof on the valuation date nearest the date the
Unit holder purchases his Units), in order to determine his tax
basis for his pro rata portion of each Security held by such
Trust.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from
the Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unit holder
(subject to various nonrecognition provisions under the Code) and
the amount thereof will be measured by comparing the Unit
holder's aliquot share of the total proceeds from the transaction
with his basis for his fractional interest in the asset disposed
of. Such basis is ascertained by apportioning the tax basis for
his Units (as of the date on which his Units were acquired) among
each of the Trust assets of such Trust (as of the date on which
his Units were acquired) ratably according to their values as of
the valuation date nearest the date on which he purchased such
Units. A Unit holder's basis in his Units and of his fractional
interest in each Trust asset must be reduced, but not below zero,
by the Unit holder's pro rata portion of dividends with respect
to each Security which are not taxable as ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Securities upon the redemption of Units or upon
the termination of a Trust. As previously discussed, prior to
the redemption of Units or the termination of such Trust, a Unit
holder is considered as owning a pro rata portion of each of the
particular Trust's assets. The receipt of an in kind
distribution will result in a Unit holder receiving an undivided
interest in whole shares of stock and possibly cash. The
potential federal income tax consequences which may occur under
an in kind distribution with respect to each Security owned by
the Trust will depend upon whether or not a Unit holder receives
cash in addition to Securities. A "Security" for this purpose is
a particular class of stock issued by a particular corporation.
A Unit holder will not recognize gain or loss if a Unit holder
only receives Securities in exchange for his or her pro rata
portion of the Securities held by a Trust. However, if a Unit
holder also receives cash in exchange for a fractional share of a
Security held by a Trust, such Unit holder will generally
recognize gain or loss based upon the difference between the
amount of cash received by the Unit holder and his tax basis in
such fractional share of a Security held by a Trust. The total
amount of taxable gains (or losses) recognized upon such
redemption will generally equal the sum of the gain (or loss)
recognized under the rules described above by the redeeming Unit
holder with respect to each Security owned by a Trust.
A domestic corporation owning Units in a Trust may be
eligible for the 70% dividends received deduction pursuant to
section 243(a) of the Code with respect to such Unit holder's pro
rata portion of dividends received by a Trust (to the extent such
dividends are taxable as ordinary income, as discussed above, and
are attibutable to domestic corporations), subject to the
limitations imposed by Sections 246 and 246A of the Code.
To the extent dividends received by a Trust are attributable
to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to
its pro rata portion of such dividends since the dividends
received deduction is generally available only with respect to
dividends paid by domestic corporations.
Section 67 of the Code provides that certain miscellaneous
itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of a Trust as
miscellaneous itemized deductions subject to this limitation.
A Unit holder will recognize taxable gain (or loss) when all
or part of the pro rata interest in a Security is either sold by
the Trust or redeemed or when a Unit holder disposes of his Units
in a taxable transaction, in each case for an amount greater (or
less) than his tax basis therefor, subject to various
nonrecognition provisions of the Code.
It should be noted that payments to a Trust of dividends on
Securities that are attributable to foreign corporations may be
subject to foreign withholding taxes and Unit holders should
consult their tax advisers regarding the potential tax
consequences relating to the payment of any such withholding
taxes by a Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unit holders.
Because under the grantor trust rules, an investor is deemed to
have paid directly his share of foreign taxes that have been paid
or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect
to such taxes. The Taxpayer Relief Act of 1997 imposes a required
holding period for such credits.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including foreign, state or local taxes or collateral tax
consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-73343)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
May 28, 1999
The Chase Manhattan Bank, as Trustee of
FT 334
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 334
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts included in
FT 334 (each, a "Trust"), which will be established under a
certain Standard Terms and Conditions of Trust dated November 20,
1991, and a related Trust Agreement dated as of today
(collectively, the "Indenture") among Nike Securities L.P., as
Depositor (the "Depositor"), First Trust Advisors L.P., as
Evaluator, First Trust Advisors L.P., as Portfolio Supervisor,
and The Chase Manhattan Bank as Trustee (the "Trustee").
Pursuant to the terms of the Indenture, units of fractional
undivided interest in the Trust (the "Units") will be issued in
the aggregate number set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-73343) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name in such Registration Statement and the preliminary
prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
May 28, 1999
The Chase Manhattan Bank, as Trustee of
FT 334
4 New York Plaza, 6th Floor
New York, New York 10004-3113
Attention: Mr. Thomas Porazzo
Vice President
Re: FT 334
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor, and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in FT
334 (each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "Units"), each of which
represents an undivided interest in the respective Trust which
consists of common stocks (including, confirmations of contracts
for the purchase of certain stocks not delivered and cash, cash
equivalents or an irrevocable letter of credit or a combination
thereof, in the amount required for such purchase upon the
receipt of such stocks), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued thereunder (the "Certificates"), the
Closing Memorandum dated todays date, and such other documents
as we have deemed necessary in order to render this opinion.
Based on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a Trust Company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration
books of the Trust the ownership of the Units by the Depositor.
Upon receipt of confirmation of the effectiveness of the
registration statement for the sale of the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, the Trustee may deliver Certificates for such Units, in
such names and denominations as the Depositor may request, to or
upon the order of the Depositor as provided in the Closing
Memorandum.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
May 28, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 334
Gentlemen:
We have examined the Registration Statement File No.
333-73343 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Senior Vice President
LINKLATERS & PAINES (NEW YORK)
885 THIRD AVENUE, SUITE 2600
NEW YORK, NEW YORK 10022
FAX (212) 751-9335
TELEX 127812
30 May 1999
Nik Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Dear Sirs
FT 334 GLOBAL TARGET 15 PORTFOLIO-JUNE 1999 SERIES
1. We have acted as special United Kingdom ("UK") taxation
advisers in connection with the issue of units ("Units") in
the Global Target 15 Trust, June 1999 Series (the "Trust")
on the basis of directions given to us by Chapman and
Cutler, counsel to yourselves.
2. This opinion is limited to UK taxation law as applied in
practice on the date hereof by the Inland Revenue and is
given on the basis that it will be governed by and construed
in accordance with English law as enacted.
3. For the purpose of this opinion, the only documentation
which we have examined is a draft prospectus for FT 334
comprising The Dow Target 5 Portfolio, June 1999 Series; The
Dow Target 10 Portfolio, June 1999 Series; the Target 25
Portfolio, June 1999 Series; the Target Small-Cap Portfolio,
June 1999 Series; the European Target 20 Portfolio, June
1999 Series; The S&P Target 10 Portfolio, June 1999 Series;
The Nasdaq Target 15 Portfolio, June 1999 Series and the
Trust (together the "Funds") which is dated 17 May 1999 (the
"Prospectus"). We have been advised by Chapman and Cutler
that there are no material differences between the
Prospectus and the final prospectus to be issued for the
Funds to be dated 28 May 1999. Terms defined in the
Prospectus bear the same meaning herein.
4. We have assumed for the purposes of this opinion that:
4.1. a holder of Units ("Unit holder") is, under the terms
of the Indenture governing the Trust, entitled to have
paid to him (subject to a deduction for annual
expenses, including total applicable custodial fees and
certain other costs associated with foreign trading and
annual Trustee's, Sponsor's, portfolio supervisory,
evaluation and administrative fees and expenses) his
pro rata share of all the income which arises to the
Trust from the investments in the Trust, and that,
under the governing law of the Indenture, this is a
right as against the assets of the Trust rather than a
right enforceable in damages only against the Trustee;
4.2. subject as provided in paragraph 9 below, for taxation
purposes the Trustee is not a UK resident and is a US
resident;
4.3. the general administration of the Trust will be carried
out only in the US;
4.4. no Units are registered in a register kept in the UK by
or on behalf of the Trustee;
4.5. the Trust is not treated as a corporation for US tax
purposes;
4.6. the structure, including the investment strategy of the
Trust, will be substantially the same as that set out
in the Prospectus; and
4.7. each Unit holder is neither resident nor ordinarily
resident in the UK (and has not been resident or
ordinarily resident in the UK), nor is any such Unit
holder carrying on a trade in the UK through a branch
or agent in the UK.
5. We understand that the portfolio of the Trust will consist
of the common stock of the five companies with the lowest
per share stock price of the ten companies in each of the
Dow Jones Industrial Average, the Financial Times Industrial
Ordinary Share Index and the Hang Seng Index respectively
having the highest dividend yield in the respective index as
at the close of business on the business day prior to the
date of the final prospectus to be issued for the Funds in
respect of the stocks comprised in the Dow Jones Industrial
Average and three business days prior to the date of the
final prospectus to be issued for the Funds in respect of
stock comprised in the Financial Times Industrial Ordinary
Share Index and the Hang Seng Index; and that the Trust will
hold such common stocks for a period of approximately
thirteen months, after which time the Trust will terminate
and the stocks will be sold. We address UK tax issues in
relation only to the common stocks of companies in the
Financial Times Industrial Ordinary Share Index comprised in
the portfolio of the Trust (the "UK Equities").
6. Where a dividend which carries a tax credit to which an
individual resident in the United Kingdom would be entitled
under United Kingdom law is paid by a UK resident company to
a qualifying US resident which (either alone or together
with one or more associated corporations) controls directly
or indirectly less than 10 percent of the voting stock of
that UK company, the qualifying US resident is entitled
under the terms of the double taxation treaty between the US
and the UK (the "Treaty"), on making a claim to the UK
Inland Revenue, to a payment of a tax credit less a
withholding tax of 15 percent of the aggregate amount of the
tax credit and the dividend.
Section 30 of the Finance (No. 2) Act 1997 provides that the
tax credit attached to a dividend paid by a UK company on or
after April 6, 1999 is equal to one-ninth of the dividend.
Therefore, on payment by a UK company of a dividend of 90
pounds on or after April 6, 1999, a tax credit of 10 pounds
will arise. The tax credit is less than 15 per cent of the
aggregate amount of the tax credit and divided (i.e. 15 per
cent of 100). A qualifying US resident which (either alone
or together with one or more associated corporations)
controls directly or indirectly less than 10 percent of the
voting stock of that UK company will therefore not be
entitled to any payment in respect of that tax credit under
the Treaty in respect of dividends paid on UK Equities.
This opinion does not consider whether a Unit holder will be
a qualifying US resident for the purposes of the Treaty
since, for the reasons explained above, even if a Unit
holder did satisfy the necessary criteria to be a qualifying
US resident, the Unit holder would not be entitled to
repayment under the Treaty of any part of the tax credit.
7. The Trust may be held to be trading in stock rather than
holding stock for investment purposes by virtue, inter alia,
of the length of the time for which the stock is held. If
the stock is purchased and sold through a UK resident agent,
then, if the Trust is held to be trading in such stock,
profits made on its subsequent disposal may, subject to 8
below, be liable to United Kingdom tax on income.
8. Under current law, the Trust's liability to tax on such
profits will be limited to the amount of tax (if any)
withheld from the Trust's income provided such profits
derive from transactions carried out on behalf of the Trust
by a UK agent where the following conditions are satisfied:
8.1. the transactions from which the profits are derived are
investment transactions;
8.2. the agent carries on a business of providing investment
management services;
8.3. the transactions are carried out by the agent on behalf
of the Trust in the ordinary course of that business;
8.4. the remuneration received by the agent is at a rate
which is not less than that which is customary for the
type of business concerned;
8.5. the agent acts for the Trust in an independent
capacity.
The agent will act in an independent capacity if the
relationship between the agent and the Trust, taking
account of its legal, financial and commercial
characteristics, is one which would exist between
independent persons dealing at arm's length. This will
be regarded as the case by the UK Inland Revenue if,
for example, the provision of services by the agent to
the Trust (and any connected person) does not form a
substantial part of the agent's business (namely where
it does not exceed 70 percent of the agent's business,
by reference to fees or some other measure if
appropriate).
In addition, this condition will be regarded as
satisfied by the UK Inland Revenue if interests in the
Trust, a collective fund, are freely marketed;
8.6. the agent (and persons connected with the agent) do not
have a beneficial interest in more than 20 percent of
the Trust's income derived from the investment
transactions (excluding reasonable management fees paid
to the agent); and
8.7. the agent acts in no other capacity in the UK for the
Trust.
Further, where stock is purchased and sold by the Trust
through a UK broker in the ordinary course of a
brokerage business carried on in the UK by that broker,
and the remuneration which the broker receives for the
transactions is at a rate which is no less than that
which is customary for that class of business and the
broker acts in no other capacity for the Trust in the
UK, profits arising from transactions carried out
through that broker will not be liable to UK tax.
Accordingly, unless a Unit holder, being neither
resident nor ordinarily resident in the UK, has a
presence in the UK (other than through an agent or a
broker acting in the manner described above) in
connection with which the Units are held, the Unit
holder will not be charged to UK tax on such profits.
9. If the Trustee has a presence in the UK, then it is
technically possible that income or gains of the Fund could
be assessed upon the Trustee, whether arising from
securities (which includes stock) or from dealings in those
securities. We understand that the Trustee has a branch in
the UK. However, we consider that any such risk should be
remote provided that:
9.1. the UK branch of the Trustee will not have any
involvement with establishing or managing the Fund or
its assets nor derive income or gains from the Fund or
its assets.
9.2. any income derived by the Trustee will be derived by it (see
6.1 above) as a resident of the US for the purposes of the
Treaty; and
The Trustee (in its capacity as recipient of income on
behalf of the Trust) will be a resident of the US for
Treaty purposes to the extent that the income derived
by the Trust is subject to US tax as the income of a US
resident, either in the hands of the Trust itself or in
the hands of its beneficiaries.
We have assumed that the Trust will not be subject to
US tax on its income and that such income will be
treated as income of the beneficiaries of the Trust for
US purposes. Accordingly, the Trust would be a US
resident for the purposes of the Treaty only to the
extent that the beneficiaries would be taxable in the
US on such income or treated as so taxable by agreement
between the relevant authorities. The provisions of
the Treaty have been extended to grant resident status
to tax exempt charitable trusts and pension funds. We
understand that this is confirmed on the US Treasury
side by its "Technical Explanation" of the Treaty
issued on March 9, 1977.
10. Where the Trustee makes capital gains on the disposal of the
UK Equities, a Unit holder will not be liable to UK capital
gains tax on those gains.
11. UK stamp duty will generally be payable at the rate of 50p
per 100 pounds of the consideration (or any part) in respect
of a transfer of the shares in UK incorporated companies or
in respect of transfers to be effected on a UK share
register. UK stamp duty reserve tax will generally be
payable on the entering into of an unconditional agreement
to transfer such shares, or on a conditional agreement to
transfer such shares becoming unconditional, at the rate of
0.5 percent of the consideration to be provided. The tax
will generally be paid by the purchaser of such shares.
No UK stamp duty or stamp duty reserve tax should be payable
on an agreement to transfer nor a transfer of Units,
provided that such transfer is neither executed in nor
brought into the UK.
12. In our opinion, the taxation paragraphs contained on pages
34 and 33 of the Prospectus, as amended pursuant to our fax
to you of 22 April 1999, under the heading "United Kingdom
Taxation," as governed by the general words appearing
immediately under the heading "United Kingdom Taxation," as
governed by the general words appearing immediately under
that heading, which relate to the Trust and which are to be
contained in the final prospectus to be issued for the
Funds, represent a fair summary of material UK taxation
consequences for a US resident Unit holder of Units in the
Trust.
13. This opinion is addressed to you on the understanding that
you (and only you) may rely upon it in connection with the
issue and sale of the Units (and for no other purpose).
This opinion may not be quoted or referred to in any public
document or filed with any governmental agency or other
person without our written consent. We understand that it
is intended to produce a copy of this opinion to the
Trustee. We consent to the provision of this opinion to the
Trustee and confirm that, insofar as this opinion relates to
the UK tax consequences for the Trust and US persons
holdings Units in the Trust, the Trustee may similarly rely
upon it in connection with the issue and sale of Units.
However you should note that this opinion does not consider
the UK tax consequences for the Trustee arising from its
duties in respect of the Trust under the Indenture.
We consent further to the reference which is made in the
prospectus to be issued for the Fund to our opinion as to
the UK tax consequences to US persons holding Units in the
Trust.
Yours faithfully
Linklaters & Paines
