Registration No. 333-74081
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 336
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 April 7, 1999 at 2:00 p.m. pursuant to Rule
487.
________________________________
AMERICA'S LEADING BRANDS FLEXPORTFOLIO SERIES
ENERGY FLEXPORTFOLIO SERIES
FINANCIAL SERVICES FLEXPORTFOLIO SERIES
INTERNET FLEXPORTFOLIO SERIES
PHARMACEUTICAL FLEXPORTFOLIO SERIES
TECHNOLOGY FLEXPORTFOLIO SERIES
FT 336
FT 336 consists of six separate unit investment trusts each of which is
listed above (each, a "Trust," and collectively, the "Trusts"). Each
Trust contains a diversified portfolio of common stocks ("Securities")
issued by companies in the industry sector or investment focus for which
the Trust is named. The objective of each Trust is to provide an above-
average total return through capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
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 April 7, 1999
Page 1
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
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 17
Portfolios 18
Risk Factors 19
Portfolio Securities Descriptions 21
Public Offering 31
Distribution of Units 32
The Sponsor's Profits 33
The Secondary Market 33
How We Purchase Units 33
Expenses and Charges 33
Tax Status 34
Rights of Unit Holders 35
Income and Capital Distributions 36
Redeeming Your Units 37
Removing Securities from a Trust 38
Amending or Terminating the Indenture 39
Information on the Sponsor, Trustee and Evaluator 39
Other Information 40
</TABLE>
Page 2
Summary of Essential Information
FT 336
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-April 7, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
America's Leading Energy Financial Services
Brands Flex FlexPortfolio FlexPortfolio
Portfolio Series Series Series
________________ ____________ __________________
<S> <C> <C> <C>
Initial Number of Units (1) 15,007 14,882 14,873
Fractional Undivided Interest in the Trust per Unit (1) 1/15,007 1/14,882 1/14,873
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 10.000 $ 10.000 $ 10.000
Maximum Sponsor retention of 2.5% of the Public Offering
Price per Unit (2.5% of the net amount invested,
exclusive of the deferred Sponsor retention) (3) $ .250 $ .250 $ .250
Less Deferred Sponsor retention per Unit $ (.250) $ (.250) $ (.250)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 10.000 $ 10.000 $ 10.000
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred Sponsor retention) (5) $ 10.000 $ 10.000 $ 10.000
Cash CUSIP Number 30264V 422 30264V 448 30264V 463
Reinvestment CUSIP Number 30264V 430 30264V 455 30264V 471
Security Code 56707 56709 56711
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date April 12, 1999
Mandatory Termination Date (6) April 7, 2004
Income Distribution Record Date Fifteenth day of each June and December commencing June 15, 1999.
Income Distribution Date (7) Last day of each June and December commencing June 30, 1999.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 4.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 336
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-April 7, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Internet Pharmaceutical Technology
FlexPortfolio FlexPortfolio FlexPortfolio
Series Series Series
___________ ______________ ____________
<S> <C> <C> <C>
Initial Number of Units (1) 14,836 14,992 14,935
Fractional Undivided Interest in the Trust per Unit (1) 1/14,836 1/14,992 1/14,935
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 10.000 $ 10.000 $ 10.000
Maximum Sponsor retention of 2.5% of the Public Offering
Price per Unit (2.5% of the net amount invested,
exclusive of the deferred Sponsor retention) (3) $ .250 $ .250 $ .250
Less Deferred Sponsor retention per Unit $ (.250) $ (.250) $ (.250)
Public Offering Price per Unit (4) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 10.000 $ 10.000 $ 10.000
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred Sponsor retention) (5) $ 10.000 $ 10.000 $ 10.000
Cash CUSIP Number 30264V 489 30264V 505 30264V 521
Reinvestment CUSIP Number 30264V 497 30264V 513 30264V 539
Security Code 56713 56715 56717
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date April 12, 1999
Mandatory Termination Date (6) April 7, 2004
Income Distribution Record Date Fifteenth day of each June and December commencing June 15, 1999.
Income Distribution Date (7) Last day of each June and December commencing June 30, 1999.
________________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each Security, if listed on a securities exchange, is valued at its
last closing sale price. If a Security is not listed, or if no closing
sale price exists, it is valued at its closing ask price. Evaluations
for purposes of determining the purchase, sale or redemption price of
Units are made as of the close of trading on the New York Stock Exchange
(generally 4:00 p.m. Eastern time) on each day on which it is open (the
"Evaluation Time").
(3) The maximum Sponsor retention is entirely deferred. See "Fee Table"
and "Public Offering." If you redeem or sell Units, you will not be
assessed any remaining unaccrued Sponsor retention payments at the time
of sale or redemption.
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. 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) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$1.00 per 100 Units. Notwithstanding, distributions of funds in the
Capital Account, if any, will be made in December of each year.
</FN>
</TABLE>
Page 4
Fee Tables
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "Expenses and Charges." Although the Trusts have a term of
approximately five years and are unit investment trusts rather than
mutual funds, this information is presented to permit a comparison of
fees.
<TABLE>
<CAPTION>
America's Leading
Brands Energy FlexPortfolio
FlexPortfolio Series Series
___________________ _____________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Maximum Sponsor retention 2.50%(a) $.250 2.50%(a) $.250
===== ====== ===== ======
Maximum Sponsor retention imposed on reinvested dividends 2.50%(b) $.250 2.50%(b) $.250
===== ====== ===== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(c) $.0225 .225%(c) $.0225
===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .096% .0098 .096% .0098
Trustee's fee and other operating expenses .145% .0149 .145% .0149
_____ ______ _____ ______
Total .241% $.0247 .241% $.0247
===== ====== ===== ======
Financial Services Internet
FlexPortfolio Series FlexPortfolio Series
__________________________ _____________________
Amount Amount
per Unit per Unit
________ ________
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Maximum Sponsor retention 2.50%(a) $.250 2.50%(a) $.250
===== ====== ===== ======
Maximum Sponsor retention imposed on reinvested dividends 2.50%(b) $.250 2.50%(b) $.250
===== ====== ===== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(c) $.0225 .225%(c) $.0225
===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .096% .0098 .096% .0098
Trustee's fee and other operating expenses .145% .0149 .145% .0149
_____ ______ _____ ______
Total .241% $.0247 .241% $.0247
===== ====== ===== ======
</TABLE>
Page 5
<TABLE>
<CAPTION>
Pharmaceutical Technology
FlexPortfolio Series FlexPortfolio Series
_________________________ ________________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
UNIT HOLDER TRANSACTION EXPENSES
(as a percentage of public offering price)
Maximum Sponsor retention 2.50%(a) $.250 2.50%(a) $.250
===== ====== ===== ======
Maximum Sponsor retention imposed on reinvested dividends 2.50%(b) $.250 2.50%(b) $.250
===== ====== ===== ======
ORGANIZATION COSTS
(as a percentage of public offering price)
Estimated organization costs .225%(c) $.0225 .225%(c) $.0225
===== ====== ===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees .096% .0098 .096% .0098
Trustee's fee and other operating expenses .145% .0149 .145% .0149
_____ ______ _____ ______
Total .241% $.0247 .241% $.0247
===== ====== ===== ======
</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
______ _______ _______
<S> <C> <C> <C>
America's Leading Brands FlexPortfolio Series $ 97 $ 254 $ 425
Energy FlexPortfolio Series 97 254 425
Financial Services FlexPortfolio Series 97 254 425
Internet FlexPortfolio Series 97 254 425
Pharmaceutical FlexPortfolio Series 97 254 425
Technology FlexPortfolio Series 97 254 425
The example will not differ if you hold rather than sell your Units at
the end of each period. The example does not reflect Sponsor retention
on reinvested dividends and other distributions. If these charges were
included, your costs would be higher.
______________
<FN>
(a) The maximum Sponsor retention (sales charge) is entirely deferred.
The maximum Sponsor retention is a fixed amount equal to $.250 per Unit
(approximately $.05 per Unit per year) which will be accrued at the daily
rate of $.00013721 per Unit and deducted monthly on the twentieth day of
each month, commencing April 20, 1999 (or if the twentieth day is not a
business day on the preceding business day) and continuing over the life
of a Trust and at a Trust's termination. If you buy Units at a
price of less than $10.00 per Unit, the dollar amount of the Sponsor
retention will not change but the Sponsor retention on a percentage
basis will exceed 2.5% of the Public Offering Price. When you purchase
Units you will only be subject to Sponsor retention payments not yet
collected.
(b) Reinvested dividends will be subject only to the Sponsor retention
remaining at the time of reinvestment. See "Income and Capital
Distributions."
(c) 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 earlier of six months after the Initial Date of
Deposit or the end of the initial offering period.
</FN>
</TABLE>
Page 6
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 336
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 336, comprised of America's Leading
Brands FlexPortfolio Series; Energy FlexPortfolio Series; Financial
Services FlexPortfolio Series; Internet FlexPortfolio Series;
Pharmaceutical FlexPortfolio Series; and Technology FlexPortfolio
Series, as of the opening of business on April 7, 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 April 7, 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 presents
fairly, in all material respects, the financial position of FT 336,
comprised of America's Leading Brands FlexPortfolio Series; Energy
FlexPortfolio Series; Financial Services FlexPortfolio Series; Internet
FlexPortfolio Series; Pharmaceutical FlexPortfolio Series; and
Technology FlexPortfolio Series, at the opening of business on April 7,
1999 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 7, 1999
Page 7
Statements of Net Assets
FT 336
At the Opening of Business on the
Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
America's Leading Energy Financial Services
Brands Flex FlexPortfolio FlexPortfolio
Portfolio Series Series Series
_________________ _____________ ___________________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented by
purchase contracts (1) (2) $150,075 $148,822 $148,730
Less liability for reimbursement to Sponsor
for organization costs (3) (338) (335) (335)
________ ________ ________
Net assets $149,737 $148,487 $148,395
======== ======== ========
Units outstanding 15,007 14,882 14,873
ANALYSIS OF NET ASSETS
Cost to investors (4) $150,075 $148,822 $148,730
Less Sponsor retention (4) (0) (0) (0)
Less estimated reimbursement to Sponsor
for organization costs (3) (338) (335) (335)
________ ________ ________
Net assets $149,737 $148,487 $148,395
======== ======== ========
________________
<FN>
See "Notes to Statements of Net Assets" on page 9.
</FN>
</TABLE>
Page 8
Statements of Net Assets (con't.)
FT 336
At the Opening of Business on the
Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Internet Pharmaceutical Technology
FlexPortfolio FlexPortfolio FlexPortfolio
Series Series Series
_____________ ____________ ____________
<S> <C> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $148,369 $149,919 $149,348
Less liability for reimbursement to Sponsor
for organization costs (3) (334) (337) (336)
________ ________ ________
Net assets $148,035 $149,582 $149,012
======== ======== ========
Units outstanding 14,836 14,992 14,935
ANALYSIS OF NET ASSETS
Cost to investors (4) $148,369 $149,919 $149,348
Less Sponsor retention (4) (0) (0) (0)
Less estimated reimbursement to Sponsor
for organization costs (3) (334) (337) (336)
________ ________ ________
Net assets $148,035 $149,582 $149,012
======== ======== ========
_______________________
<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 $1,200,000 will be allocated among each of the six Trusts in FT
336, has been deposited with the Trustee as collateral, covering the
monies necessary for the purchase of the Securities according to their
purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $.0225 per
Unit for each Trust. A payment will be made at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period to an account maintained by the Trustee from which the obligation
of the investors to the Sponsor will be satisfied. To the extent that
actual organization costs of a Trust are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of such Trust.
(4) The Sponsor retention is entirely deferred. The Sponsor retention is
2.5% of the Public Offering Price (equivalent to 2.5% of the net amount
invested, exclusive of the deferred Sponsor retention). This retention,
which accrues on a daily basis and which will total $.25 per Unit over
the life of a Trust, will be paid to us in monthly
installments beginning on April 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) over the life of a Trust and at a Trust's
termination. If you redeem or sell Units, you will not be subject to any
remaining unaccrued Sponsor retention payments at the time of sale or
redemption.
</FN>
</TABLE>
Page 9
Schedule of Investments
America's Leading Brands FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of
of Ticker Symbol and Offering per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
________ ________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
Apparel
_______
200 JNY Jones Apparel Group, Inc. 4% $ 30.250 $ 6,050
87 TOM Tommy Hilfiger Corporation 4% 68.375 5,948
Auto & Transportation
_____________________
102 F Ford Motor Company 4% 58.250 5,942
Beverages
_________
80 BUD Anheuser-Busch Companies, Inc. 4% 74.500 5,960
100 KO The Coca-Cola Company 4% 59.813 5,981
157 PEP PepsiCo, Inc. 4% 38.438 6,035
Entertainment
_____________
194 DIS The Walt Disney Company 4% 30.625 5,941
Food
____
146 CPB Campbell Soup Company 4% 41.313 6,032
128 HNZ H.J. Heinz Company 4% 46.688 5,976
116 HSY Hershey Foods Corporation 4% 52.813 6,126
253 SLE Sara Lee Corporation 4% 23.813 6,025
Household Products
__________________
52 CLX The Clorox Company 4% 117.063 6,087
64 CL Colgate-Palmolive Company 4% 93.750 6,000
60 PG The Procter & Gamble Company 4% 100.875 6,052
Pharmaceuticals
_______________
93 BMY Bristol-Myers Squibb Company 4% 64.063 5,958
64 JNJ Johnson & Johnson 4% 94.250 6,032
107 SGP Schering-Plough Corporation 4% 56.625 6,059
Recreation
___________
121 CCL Carnival Corporation 4% 49.438 5,982
103 HDI Harley-Davidson, Inc. 4% 58.438 6,019
Restaurants
___________
129 MCD McDonald's Corporation 4% 46.063 5,942
185 SBUX Starbucks Corporation 4% 30.750 5,689
Retail
______
88 GPS The Gap, Inc. 4% 67.750 5,962
Technology
__________
46 INTC Intel Corporation 4% 130.438 6,000
109 XRX Xerox Corporation 4% 57.125 6,227
Toiletries/Cosmetics
____________________
121 G The Gillette Company 4% 50.000 6,050
______ _________
Total Investments 100% $150,075
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on pages 15 and 16.
</FN>
</TABLE>
Page 10
Schedule of Investments
Energy FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_________ ________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
OIL & GAS-DRILLING
__________________
200 DO Diamond Offshore Drilling, Inc. 4% $29.750 $ 5,950
459 ESV ENSCO International, Inc. 4% 12.750 5,852
358 NBR Nabors Industries, Inc. 4% 16.688 5,974
361 NE Noble Drilling Corporation 4% 16.375 5,911
780 FLC R&B Falcon Corporation 4% 7.500 5,850
344 SDC Santa Fe International Corporation 4% 17.438 5,999
222 RIG Transocean Offshore, Inc. 4% 26.938 5,980
OIL & GAS-EXPLORATION & PRODUCTION
___________________________________
353 THX The Houston Exploration Company 4% 17.000 6,001
206 NBL Noble Affiliates, Inc. 4% 29.188 6,013
OIL-FIELD SERVICES
__________________
284 BJS BJ Services Company 4% 20.500 5,822
185 CAM Cooper Cameron Corporation 4% 31.750 5,874
636 GLBL Global Industries, Ltd. 4% 9.438 6,003
407 PGO Petroleum Geo-Services ASA (ADR) 4% 14.563 5,927
103 SLB Schlumberger Ltd. 4% 57.875 5,961
249 TDW Tidewater, Inc. 4% 23.938 5,961
438 VTS Veritas DGC, Inc. 4% 13.563 5,941
235 WFT Weatherford International, Inc. 4% 25.063 5,890
OIL-INTEGRATED
______________
62 BPA BP Amoco Plc (ADR) 4% 96.313 5,971
67 CHV Chevron Corporation 4% 89.563 6,001
95 E ENI SpA (ADR) 4% 63.125 5,997
66 MOB Mobil Corporation (4) 4% 91.250 6,022
114 RD Royal Dutch Petroleum Company NV (3) 4% 52.688 6,006
106 TX Texaco, Inc. 4% 56.375 5,976
98 TOT Total SA (ADR) 4% 61.375 6,015
214 MRO USX-Marathon Group 4% 27.688 5,925
______ _________
Total Investments 100% $148,822
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on pages 15 and 16.
</FN>
</TABLE>
Page 11
Schedule of Investments
Financial Services FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_________ ________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
BANKS & THRIFTS
_______________
71 BAC BankAmerica Corporation 3.32% $ 69.625 $ 4,943
90 ONE Bank One Corporation 3.33% 55.063 4,956
177 COFI Charter One Financial, Inc. 3.39% 28.500 5,044
63 CMB The Chase Manhattan Corporation 3.37% 79.500 5,009
93 FTU First Union Corporation 3.33% 53.313 4,958
133 FLT Fleet Financial Group, Inc 3.35% 37.438 4,979
144 USB U.S. Bancorp 3.34% 34.438 4,959
129 WM Washington Mutual, Inc. 3.26% 37.625 4,854
132 WFC Wells Fargo Company 3.36% 37.875 5,000
FINANCIAL SERVICES
__________________
40 AXP American Express Company 3.32% 123.250 4,930
32 COF Capital One Financial Corporation 3.31% 153.938 4,926
74 C Citigroup, Inc. 3.34% 67.125 4,967
131 CCR Countrywide Credit Industries, Inc. 3.32% 37.750 4,945
73 FNM Fannie Mae 3.40% 69.188 5,051
106 HI Household International, Inc. 3.36% 47.125 4,995
221 KRB MBNA Corporation 3.34% 22.500 4,973
44 PVN Providian Financial Corporation 3.34% 113.000 4,972
INSURANCE
________
98 AFL AFLAC Incorporated 3.32% 50.438 4,943
136 ALL The Allstate Corporation 3.32% 36.250 4,930
39 AIG American International Group, Inc. 3.32% 126.625 4,938
85 CB The Chubb Corporation 3.36% 58.750 4,994
73 EQ The Equitable Companies Incorporated 3.35% 68.250 4,982
135 MTG MGIC Investment Corporation 3.35% 36.875 4,978
118 NFS Nationwide Financial Services, Inc. (Class A) 3.30% 41.625 4,912
35 PGR Progressive Corporation 3.37% 143.063 5,007
INVESTMENT SERVICES
___________________
79 LEH Lehman Brothers Holdings, Inc. 3.35% 63.000 4,977
54 MER Merrill Lynch & Company, Inc. 3.31% 91.125 4,921
47 MWD Morgan Stanley Dean Witter & Co. 3.31% 104.813 4,926
45 SCH The Charles Schwab Corporation 3.24% 107.250 4,826
152 TROW T. Rowe Price Associates, Inc. 3.32% 32.469 4,935
______ _________
Total Investments 100% $148,730
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on pages 15 and 16.
</FN>
</TABLE>
Page 12
Schedule of Investments
Internet FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of
of Ticker Symbol and Offering per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
ACCESS/INFORMATION PROVIDERS
____________________________
76 T AT&T Corporation 4% $ 80.000 $ 6,080
35 AOL America Online, Inc. 4% 167.500 5,862
139 GBLX Global Crossing Ltd. (3) 4% 43.375 6,029
67 WCOM MCI WorldCom, Inc. 4% 89.563 6,001
56 MSPG MindSpring Enterprises, Inc. 4% 105.375 5,901
73 QWST Qwest Communications International, Inc. 4% 82.188 6,000
DATA NETWORKING/COMMUNICATIONS EQUIPMENT
________________________________________
52 CSCO Cisco Systems, Inc. 4% 115.250 5,993
94 LU Lucent Technologies, Inc. 4% 64.625 6,075
88 NT Northern Telecom Ltd. (3) 4% 67.688 5,957
55 TLAB Tellabs, Inc. 4% 107.250 5,899
COMPUTERS & PERIPHERALS
_______________________
128 DELL Dell Computer Corporation 4% 46.813 5,992
45 EMC EMC Corporation 4% 131.188 5,903
32 IBM International Business Machines Corporation 4% 183.313 5,866
42 SUNW Sun Microsystems, Inc. 4% 140.625 5,906
INTERNET CONTENT
________________
27 CMGI CMGI, Inc. 4% 229.625 6,200
194 DIS The Walt Disney Company 4% 30.625 5,941
88 TMPW TMP Worldwide, Inc. 4% 69.250 6,094
ON-LINE RETAILING
_________________
79 EGRP E*TRADE Group, Inc. 4% 76.000 6,004
54 SCH Charles Schwab Corporation 4% 107.250 5,791
SEMICONDUCTORS
______________
83 BRCM Broadcom Corporation 4% 70.875 5,883
46 INTC Intel Corporation 4% 130.438 6,000
SOFTWARE
________
189 CHKP Check Point Software Technologies, Ltd. (3) 4% 30.125 5,694
64 MSFT Microsoft Corporation 4% 94.063 6,020
242 NETA Network Associates, Inc. 4% 21.938 5,309
252 ORCL Oracle Corporation 4% 23.688 5,969
______ _________
Total Investments 100% $148,369
====== =========
<FN>
_________________
See "Notes to Schedules of Investments" on pages 15 and 16.
</FN>
</TABLE>
Page 13
Schedule of Investments
Pharmaceutical FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of
of Ticker Symbol and Offering per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
______ _______________________________________ __________ ______ ____________
<S> <C> <C> <C> <C>
199 AZA ALZA Corporation 5% $37.500 $ 7,463
157 ABT Abbott Laboratories 5% 48.250 7,575
109 AHP American Home Products Corporation 5% 67.875 7,398
93 AMGN Amgen, Inc. 5% 80.000 7,440
116 BMY Bristol-Myers Squibb Company 5% 64.063 7,431
101 ELN Elan Corporation Plc (ADR) 5% 74.625 7,537
88 LLY Eli Lilly and Company 5% 85.938 7,563
149 GENZ Genzyme Corporation (General Division) 5% 49.563 7,385
106 GLX Glaxo Wellcome Plc (ADR) 5% 70.313 7,453
80 JNJ Johnson & Johnson 5% 94.250 7,540
237 JMED Jones Pharma, Inc. 5% 31.063 7,362
95 MRK Merck & Company, Inc. 5% 78.063 7,416
273 MYL Mylan Laboratories, Inc. 5% 27.438 7,491
93 NVTSY Novartis AG (ADR) 5% 80.560 7,492
54 PFE Pfizer, Inc. 5% 140.250 7,574
61 ROHHY Roche Holdings AG (ADR) 5% 123.640 7,542
134 SGP Schering-Plough Corporation 5% 56.625 7,588
102 SBH SmithKline Beecham Plc (ADR) 5% 73.375 7,484
113 WLA Warner-Lambert Company 5% 66.063 7,465
183 WPI Watson Pharmaceuticals, Inc. 5% 42.188 7,720
______ _________
Total Investments 100% $149,919
====== =========
<FN>
_________________
See "Notes to Schedules of Investments" on pages 15 and 16.
</FN>
</TABLE>
Page 14
Schedule of Investments
Technology FlexPortfolio Series
FT 336
At the Opening of Business on the Initial Date of Deposit-April 7, 1999
<TABLE>
<CAPTION>
Percentage Market
Number of Aggregate Value Cost of
of Ticker Symbol and Offering per Securities to
Shares Name of Issuer of Securities (1) Price Share the Trust (2)
_________ _____________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
COMPUTER & PERIPHERALS
______________________
196 CPQ Compaq Computer Corporation 4% $ 30.875 $ 6,051
128 DELL Dell Computer Corporation 4% 46.813 5,992
45 EMC EMC Corporation 4% 131.188 5,903
85 HWP Hewlett-Packard Company 4% 70.000 5,950
32 IBM International Business Machines Corporation 4% 183.313 5,866
111 SLR Solectron Corporation 4% 54.313 6,029
42 SUNW Sun Microsystems, Inc. 4% 140.625 5,906
COMPUTER SOFTWARE & SERVICES
____________________________
196 BMCS BMC Software, Inc. 4% 32.250 6,321
297 CPWR Compuware Corporation 4% 19.875 5,903
318 KEA Keane, Inc. 4% 18.688 5,943
64 MSFT Microsoft Corporation 4% 94.063 6,020
254 NETA Network Associates, Inc. 4% 21.938 5,572
254 ORCL Oracle Corporation 4% 23.688 6,017
229 SAP SAP AG (ADR) 4% 26.250 6,011
DATA NETWORKING/COMMUNICATIONS EQUIPMENT
________________________________________
52 CSCO Cisco Systems, Inc. 4% 115.250 5,993
94 LU Lucent Technologies, Inc. 4% 64.625 6,075
88 NT Northern Telecom Ltd. (3) 4% 67.688 5,957
56 TLAB Tellabs, Inc. 4% 107.250 6,006
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
________________________________________
83 ALTR Altera Corporation 4% 71.313 5,919
88 AMAT Applied Materials, Inc. 4% 67.938 5,979
46 INTC Intel Corporation 4% 130.438 6,000
105 MXIM Maxim Integrated Products, Inc. 4% 56.938 5,978
97 NVLS Novellus Systems, Inc. 4% 61.813 5,996
124 SNPS Synopsys, Inc. 4% 48.750 6,045
53 TXN Texas Instruments, Inc. 4% 111.625 5,916
______ _________
Total Investments 100% $149,348
====== =========
_____________________
<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 April 6, 1999.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last sale prices of the listed Securities and the ask
prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of ours. The cost of
the Securities to us and our profit or loss (which is the difference
between the cost of the Securities to us and the cost of the Securities
to a Trust) are set forth below:
Cost of Securities Profit
to Sponsor (Loss)
__________________ _______
America's Leading Brands FlexPortfolio Series $150,181 $(106)
Energy FlexPortfolio Series $149,040 $(218)
Financial Services FlexPortfolio Series $148,820 $(90)
Internet FlexPortfolio Series $148,483 $(114)
Pharmaceutical FlexPortfolio Series $150,174 $(255)
Technology FlexPortfolio Series $149,472 $(124)
Page 15
(3) This Equity Security represents the common stock of a foreign
company which is traded directly on a United States securities exchange.
(4) Exxon Corporation ("Exxon") has recently announced plans to acquire
Mobil Corporation ("Mobil"). As per the terms of the merger agreement,
each shareholder of Mobil will receive 1.32015 shares of Exxon for each
share of Mobil held. As a result of this expected transaction, it is
anticipated that the Trust will receive shares of common stock of Exxon
in exchange for the shares of Mobil which it holds. The transaction is
subject to the approval of the shareholders of both companies and
various regulatory authorities.
</FN>
</TABLE>
Page 16
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created several similar
yet separate series of an investment company which we have named The FT
Series. We designate each of these investment company series, 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 contains six separate unit investment trusts which are
known as:
- - America's Leading Brands FlexPortfolio Series
- - Energy FlexPortfolio Series
- - Financial Services FlexPortfolio Series
- - Internet FlexPortfolio Series
- - Pharmaceutical FlexPortfolio Series
- - Technology FlexPortfolio Series
You can only purchase Units of the Trusts 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 switch from one FlexPortfolio to any
other FlexPortfolio series which is currently in the primary market on
any business day at no additional cost. However, your broker/dealer or
the Sponsor may at any time place limits on the number of exchanges you
can make with or without prior notice.
Mandatory Termination Date.
Each Trust will terminate on the Mandatory Termination Date,
approximately five years 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 by 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 in each Trust contracts to
buy 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 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 the Trusts, 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 deposited in a Trust on the
Initial, or any subsequent, Date of Deposit.
Since the prices of the underlying Securities will fluctuate daily, the
ratio of Securities in the Trusts, on a market value basis, will also
change daily. The portion of Securities represented by each Unit will
not change as a result of the deposit of additional Securities or cash
in a Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts will pay brokerage fees to buy
Securities. 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. However, because each Trust pays the
brokerage fees associated with its creation of new Units and with the
sale of Securities to meet redemption and exchange requests, the ability
to exchange between FlexPortfolio series will likely result in higher
brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or an affiliate) to
act as agent for the Trusts to buy Securities. If we or an affiliate of
ours act as agent to the Trusts, we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
Page 17
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 used to purchase additional Securities. 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 criteria by which they were selected. You
will not be able to dispose of or vote any of the Securities in the
Trusts. As the holder of the Securities, the Trustee will vote all of
the Securities and will do so based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and 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. The objective of each Trust is to provide investors with the
potential for above-average capital appreciation through an investment
in a diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
America's Leading Brands FlexPortfolio Series is a unit investment trust
which invests in a portfolio of common stocks of companies considered to
be leaders in their industries.
Overview:
- - As a result of growing populations and rising standards of living,
demand for goods continues to increase.
- - Relaxed trade agreements and improved political climates are opening
more markets.
- - Leading brands companies use their large advertising budgets and
strong research and development to further expand into new markets.
Energy FlexPortfolio Series is a unit investment trust which invests in
a portfolio of common stocks of energy companies we believe are
positioned to take advantage of the world's increasing demand for energy.
Industry Overview:
- - Worldwide demand continues to increase, driven primarily by the rapid
developments in newly-industrialized countries in Asia, Eastern Europe,
and Latin America.
- - Workforce reductions and technological advancements continue to lower
overhead and cut production costs.
- - New technologies are expected to lead to the discovery of additional
energy reserves and lower the cost of developing these resources.
Financial Services FlexPortfolio Series is a unit investment trust which
invests in a portfolio of common stocks of financial service companies.
Industry Overview:
- - The banking, financial services and insurance industries continue to
experience significant consolidation.
- - Banks and insurers continue to expand their businesses through
innovative products and services.
- - Baby boomers stand to benefit from the transfer of wealth as well as
more favorable estate tax laws.
Internet FlexPortfolio Series is a unit investment trust which invests
in a portfolio of common stocks of technology companies which provide
products or services for, or conduct business on, the Internet.
Industry Overview:
- - A new computer is added to the Internet approximately every four
seconds.
- - Nearly 3000 new websites are being added every day.
Page 18
- - There has been an increase in consolidation and mergers among
Internet related companies.
- - Improved security measures are helping fuel consumer transactions
over the web.
Pharmaceutical FlexPortfolio Series is a unit investment trust which
invests in a portfolio of common stocks of pharmaceutical companies.
Industry Overview:
- - Companies are working closely with managed care providers who see
pharmaceuticals as a cost-effective alternative to more expensive
treatments.
- - Given that every 7 seconds a baby boomer turns 50, the pharmaceutical
industry is under pressure to continue to develop new drugs and vaccines
to help improve and possibly prolong life.
Technology FlexPortfolio Series is a unit investment trust which invests
in a portfolio of common stocks of technology companies.
Industry Overview:
- - Technology companies continue to make advancements. Consider the new
technologies developed in the last several years alone: personal
computers, fax machines, cellular phones, online data services, and the
explosive growth of the Internet.
- - Corporations are investing in technology to enhance their
productivity and to stay ahead of the competition.
- - Consumer demand may increase as technology becomes more affordable
and more accessible.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S., and, for
certain Trusts, foreign companies. The value of a Trust's Units will
fluctuate with changes in the value of these common stocks. Common stock
prices fluctuate for several reasons including changes in investors
perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic
events affecting the issuers occur.
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.
Certain of the Securities in certain Trusts may be issued by companies
with market capitalizations of less than $1 billion. The share prices of
these small-cap companies are often more volatile than those of larger
companies. 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.
Consumer Products Industry. The America's Leading Brands FlexPortfolio
Series mainly consists of consumer products companies. General risks of
these companies include cyclicality of revenues and earnings, changing
consumer tastes, extensive competition, product liability litigation and
increased governmental regulation. Generally, spending on consumer
products is affected by the economic health of consumers. A weak economy
and its effect on consumer spending would adversely affect consumer
products companies.
Energy Industry. The Energy FlexPortfolio Series includes companies that
explore for, produce, refine, distribute or sell petroleum products, or
provide parts or services to petroleum companies. General problems of
the oil and petroleum products industry include volatile fluctuations in
price and supply of energy fuels, international politics, reduced demand
as a result of increases in energy efficiency and energy conservation,
the success of exploration projects, clean-up and litigation costs
relating to oil spills and environmental damage, and tax and other
regulatory policies of various governments. Oil production and refining
companies are subject to extensive federal, state and local
environmental laws and regulations regarding air emissions and the
Page 19
disposal of hazardous materials. In addition, declines in U.S. and
Russian crude oil production will likely lead to a greater world
dependence on oil from OPEC nations which may result in more volatile
oil prices.
Financial Services Industry. The Financial Services FlexPortfolio Series
includes banks and thrifts, insurance companies and investment firms.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession; volatile interest rates;
portfolio concentrations in geographic markets and in commercial and
residential real estate loans; and competition from new entrants in
their fields of business. In addition, banks, thrifts and their holding
companies are extensively regulated at both the federal and state level
and may be adversely affected by increased regulations.
Banks and thrifts will 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.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Companies involved in the insurance industry are engaged in
underwriting, selling, distributing or placing of property and casualty,
life or health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes
and other disasters. Life and health insurance profits may be affected
by mortality rates. Already extensively regulated, insurance companies'
profits may also be adversely affected by increased government
regulations or tax law changes.
Pharmaceutical Industry. The Pharmaceutical FlexPortfolio Series
includes companies involved in drug development and production.
Pharmaceutical companies are subject to changing government regulation,
including price controls, national health insurance, managed care
regulation, and tax incentives or penalties related to medical insurance
premiums, which could have a negative effect on the price and
availability of their products and services. In addition, such companies
face increasing competition from generic drug sales, the termination of
their patent protection for certain drugs, and technological advances
which render their products or services obsolete. The research and
development costs required to bring a drug to market are substantial and
may include a lengthy review by the government, with no guarantee that
the product will ever go to market or show a profit. Many of these
companies may not offer certain drugs or products for several years, and
as a result, may have significant losses of revenue and earnings.
Technology Industry. The Internet FlexPortfolio Series and the
Technology FlexPortfolio Series both include companies which are
involved in different areas of the technology industry. Technology
companies are generally subject to the risks of rapidly changing
technologies; short product life cycles; fierce competition; aggressive
pricing and reduced profit margins; the loss of patent, copyright and
trademark protections; cyclical market patterns; evolving industry
standards and frequent new product introductions. Technology companies
may be smaller and less experienced companies, with limited product
lines, markets or financial resources and fewer experienced management
or marketing personnel. Technology company stocks, especially those
which are Internet-related, have experienced extreme price and volume
fluctuations that are often unrelated to their operating performance.
Also, the stocks of many Internet companies have exceptionally high
price-to-earnings ratios with little or no earnings histories.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities
or of the industries represented by such issuers may negatively impact
the share prices of these Securities. We cannot predict what impact any
pending or proposed legislation or pending or threatened litigation will
have on the share prices of the Securities.
Page 20
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 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. These Securities
are either directly listed on a U.S. securities exchange or are in the
form of American Depositary Receipts ("ADRs") which are listed on a U.S.
securities exchange. Risks of foreign common stocks include 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.
Portfolio Securities Descriptions
America's Leading Brands FlexPortfolio Series
Apparel
_______
Jones Apparel Group, Inc., headquartered in Bristol, Pennsylvania,
designs, contracts for the manufacture of, and markets a broad range of
better priced women's suits, dresses and sportswear. The company also
sells clothing through factory outlet stores and full-price retail stores.
Tommy Hilfiger Corporation, headquartered in New York, New York, through
subsidiaries, designs, sources and markets designer men's sportswear and
boyswear, including woven and knit shirts, pants, sweaters, outerwear
and athletic wear. These products are complemented by collections of
men's tailored clothing, dress shirts and accessories, footwear, women's
casualwear and men's and women's fragrances, among others, bearing the
Tommy Hilfiger trademark, which are produced and sold pursuant to
licensing arrangements.
Auto & Transportation
_____________________
Ford Motor Company, headquartered in Dearborn, Michigan, is the second
largest producer of cars and trucks in the world. The company makes,
assembles and sells cars, vans, trucks and tractors and their related
parts and accessories. The company also provides financing operations,
vehicle and equipment leasing, and insurance operations.
Beverages
_________
Anheuser-Busch Companies, Inc., headquartered in St. Louis, Missouri,
brews beer, makes metal beverage containers, recycles metal and glass
beverage containers, and operates theme parks.
The Coca-Cola Company, headquartered in Atlanta, Georgia, makes and
distributes soft drink concentrates and syrups, and also markets juice
and juice-drink products.
PepsiCo, Inc., headquartered in Purchase, New York, produces and
distributes beverage concentrates, syrups and soft drinks.
Entertainment
_____________
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.) and publishing operations.
Food
____
Campbell Soup Company, headquartered in Camden, New Jersey, with
subsidiaries, makes and markets soups and sauces, biscuits and
confectionery products, and frozen foods and pickles. The company also
distributes "Campbell's Soups" and "Campbell's Specialty Kitchen"
entrees to the food service and meal replacement markets.
H.J. Heinz Company, headquartered in Pittsburgh, Pennsylvania, makes,
packages and sells processed food products, including ketchup and
sauces/condiments, pet food, baby food, frozen meals and snacks, frozen
potatoes and vegetables, soups, beans and pasta. The company also
provides weight control services and sells food products to food service
operators.
Hershey Foods Corporation, headquartered in Hershey, Pennsylvania, makes
and sells chocolate and non-chocolate confectionery products, and
grocery and pasta products.
Page 21
Sara Lee Corporation, headquartered in Chicago, Illinois, with
subsidiaries, makes, markets and distributes packaged food, packaged
consumer goods, and household and personal care products throughout the
world.
Household Products
__________________
The Clorox Company, headquartered in Oakland, California, makes and
sells nondurable consumer products sold mainly through grocery stores,
mass merchandisers and other retail outlets. The company's products
include laundry additives, home cleaning products, charcoal,
insecticides, cat litter, dressings and sauces, water filtration systems
and professional products.
Colgate-Palmolive Company, headquartered in New York, New York, through
subsidiaries, produces and distributes oral, personal and household care
and pet nutrition products. Principal global trademarks include "Ajax,"
"Colgate," "Fab," "Mennen," "Palmolive," "Prescription Diet," "Protex,"
"Science Diet" and "Soupline/Suavitel" in addition to various regional
trademarks.
The Procter & Gamble Company, headquartered in Cincinnati, Ohio, through
subsidiaries, makes detergents, fabric conditioners and hard surface
cleaners; products for personal cleansing, oral care, digestive health,
hair and skin; paper tissue, disposable diapers, and pharmaceuticals;
shortenings, oils, snacks, baking mixes, peanut butter, coffee, drinks
and citrus products.
Pharmaceuticals
_______________
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health, over-the-
counter, foot care and sun care products.
Recreation
__________
Carnival Corporation, headquartered in Miami, Florida, operates the
world's largest multiple-night cruise line under the names "Carnival
Cruise," "Holland America Line" and "Windstar Cruises." The company also
markets sightseeing tours and operates hotels under the name "Westmark
Hotels."
Harley-Davidson, Inc., headquartered in Milwaukee, Wisconsin, designs,
makes and sells heavyweight touring and custom motorcycles and related
products and accessories. The company also provides financing and
insurance services for its motorcycles.
Restaurants
__________
McDonald's Corporation, headquartered in Oak Brook, Illinois, develops,
franchises, operates and services a worldwide system of quick-service
restaurants under the name "McDonald's."
Starbucks Corporation, headquartered in Seattle, Washington, buys and
roasts whole bean coffees and sells them, along with fresh, rich-brewed
coffees, Italian-style espresso beverages, a variety of pastries and
confections, and coffee-related accessories and equipment, mainly
through its retail stores.
Retail
_______
The Gap, Inc., headquartered in San Francisco, California, operates
specialty retail stores in Canada, France, Germany, Japan, the United
States and the United Kingdom. Stores sell casual apparel, shoes and
other accessories for men, women and children under a variety of brand
names, including "Gap," "GapKids," "babyGap," "Banana Republic" and "Old
Navy."
Technology
___________
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Microcomputer
components are integrated circuits consisting of silicon-based
semiconductors etched with complex patterns of transistors.
Xerox Corporation, headquartered in Stamford, Connecticut, develops,
makes, markets, services and finances a complete range of document
processing products and services designed to make offices around the
world more productive.
Page 22
Toiletries/Cosmetics
____________________
The Gillette Company, headquartered in Boston, Massachusetts, is a
leading manufacturer of male and female grooming products and oral care
products. The company is also the top seller of writing instruments and
correction products. Gillette's products are distributed worldwide
through wholesalers, retailers and agents.
Energy FlexPortfolio Series
Oil & Gas-Drilling
__________________
Diamond Offshore Drilling, Inc., headquartered in Houston, Texas,
performs contract drilling of offshore oil and gas wells. The company
operates a fleet of offshore rigs which operate in the waters off six of
the world's seven continents.
ENSCO International, Inc., headquartered in Dallas, Texas, conducts
contract drilling and marine transportation services for the oil and gas
industry in the Gulf of Mexico, the North Sea, Venezuela and the Asia
Pacific region.
Nabors Industries, Inc., headquartered in Houston, Texas, operates the
largest land oil and gas drilling contract business in the world. The
company also provides a number of ancillary well-site services, and
makes top drives for a broad range of drilling rig applications and rig
instrumentation equipment to monitor rig performance.
Noble Drilling Corporation, headquartered in Houston, Texas, operates as
a major drilling contractor with offshore operations in the United
States, Canada, Mexico, the North Sea, Africa, the Middle East, South
America and India.
R&B Falcon Corporation, headquartered in Houston, Texas, operates a
fleet of inland marine drilling and workover units, shallow-water units
and deep-water drilling and service units. The company also operates an
inland marine towing and support fleet.
Santa Fe International Corporation, headquartered in Dallas, Texas,
conducts international offshore and land contract drilling and provides
drilling-related services to the petroleum industry worldwide, including
third-party rig operations, incentive drilling, and drilling engineering
and project management services.
Transocean Offshore, Inc., headquartered in Houston, Texas, provides
contract drilling of oil and gas wells in offshore areas throughout the
world and additional services including well engineering and planning,
turnkey drilling and coiled tubing drilling.
Oil & Gas-Exploration & Production
__________________________________
The Houston Exploration Company, headquartered in Houston, Texas,
explores for, develops and acquires oil and natural gas properties
offshore in the Gulf of Mexico and onshore in Arkansas, Oklahoma, Texas
and West Virginia.
Noble Affiliates, Inc., headquartered in Ardmore, Oklahoma, explores
for, develops and markets oil and gas in the United States as well as
internationally, mainly in the United Kingdom sector of the North Sea,
Equatorial Guinea, Ecuador, Argentina and China. The company also
markets oil and natural gas for itself and others.
Oil-Field Services
__________________
BJ Services Company, headquartered in Houston, Texas, provides well
stimulation, cementing, sand control and coiled tubing services used in
the completion of new oil and natural gas wells and in remedial work on
existing wells, both onshore and offshore.
Cooper Cameron Corporation, headquartered in Houston, Texas, makes,
sells and services petroleum production equipment and compression and
power equipment for the oil and gas drilling, production and
transmission markets and for the non-utility power generation, process
and industrial markets.
Global Industries, Ltd., headquartered in Lafayette, Louisiana, provides
pipeline construction, platform installation and removal and diving
services, mainly to the offshore oil and gas industry in the Gulf of
Mexico.
Petroleum Geo-Services ASA (ADR), headquartered in Lysaker, Norway,
acquires, processes, manages and markets marine seismic data that is
used by petroleum companies in the exploration for new reserves, the
development of existing fields and the management of producing fields.
Schlumberger Ltd., headquartered in New York, New York, supplies
products and services to the petroleum industry. Its oilfield services
cover exploration, production and completion services. The unit provides
information technology and communications services to oil and gas
concerns and also supplies test and technology services.
Tidewater, Inc., headquartered in New Orleans, Louisiana, provides
services and equipment to the offshore energy industry through the
Page 23
operation of the world's largest fleet of offshore service vessels.
Veritas DGC, Inc., headquartered in Houston, Texas, provides seismic
data acquisition, data processing and multi-client data surveys to the
oil and gas industry in selected markets worldwide.
Weatherford International, Inc., headquartered in Houston, Texas,
provides marine drilling and workover services to the oil and gas
industries. The company also makes, distributes and services oilfield
equipment, drill pipes, premium tubulars and artificial lift products.
Oil-Integrated
______________
BP Amoco Plc (ADR), headquartered in London, England, is an oil and
petrochemicals company that explores for and produces oil and gas;
refines, markets and supplies petroleum products; and markets and
manufactures chemicals. The company has operations in more than 70
countries.
Chevron Corporation, headquartered in San Francisco, California,
explores for, develops and produces crude oil and natural gas; refines
crude oil into finished petroleum products; transports and markets crude
oil, natural gas and petroleum products; and makes chemicals for
industrial uses.
ENI SpA (ADR), headquartered in Rome, Italy, through subsidiaries,
explores for, develops and produces oil and natural gas; supplies,
transmits and distributes natural gas; refines and markets oil and
petroleum products; produces and sells petrochemicals; and provides
oilfield services contracting and engineering.
Mobil Corporation, headquartered in Fairfax, Virginia, produces,
transports, refines and markets petroleum and natural gas and related
products; and makes and markets chemicals.
Royal Dutch Petroleum Company NV, headquartered in The Hague, the
Netherlands, produces crude oil, natural gas, chemicals, coal and metals
worldwide; and provides integrated petroleum services in the United
States.
Texaco, Inc., headquartered in White Plains, New York, explores for,
produces, transports, refines and markets crude oil, natural gas and
petroleum products. The company conducts its operations in the United
States, Europe and throughout the eastern and western hemispheres.
Total SA (ADR), headquartered in Paris, France, makes rubber-based
products and specialty chemicals; explores for and produces crude oil
and natural gas; and refines and markets petroleum products.
USX-Marathon Group, headquartered in Pittsburgh, Pennsylvania, explores
for, produces, refines, distributes and markets crude oil, natural gas
and petroleum products.
Financial Services FlexPortfolio Series
Banks & Thrifts
_______________
BankAmerica Corporation, headquartered in Charlotte, North Carolina, is
the holding company for Bank of America and NationsBank. The company
conducts a general banking business throughout the United States and
overseas.
Bank One Corporation, headquartered in Chicago, Illinois, is the fifth
largest bank holding company in the United States. The company operates
in selected international markets in 11 countries and is the nation's
second largest credit card company, the leading retail bank in eight
states and the third largest bank mutual fund company.
Charter One Financial, Inc., headquartered in Cleveland, Ohio, through
wholly-owned Charter One Bank, FSB, operates a banking business through
full-service banking offices in Michigan, New York and Ohio, and loan
production offices in Indiana, Kentucky, Michigan and Ohio.
The Chase Manhattan Corporation, headquartered in New York, New York,
conducts domestic and international financial services business with
operations in more than 50 countries.
First Union Corporation, headquartered in Charlotte, North Carolina,
conducts a wide range of commercial and retail banking and trust
services and provides other financial services including mortgage
banking, investment banking, home equity lending, leasing, insurance and
securities brokerage.
Fleet Financial Group, Inc, headquartered in Boston, Massachusetts,
conducts a general commercial banking and trust business through a
network of branches, ATMs and telephone banking centers. The company
also provides other activities related to banking and finance.
U.S. Bancorp, headquartered in Minneapolis, Minnesota, conducts a
commercial bank and trust business in 17 states from the midwest to the
Rocky Mountains to the Pacific Northwest.
Page 24
Washington Mutual, Inc., headquartered in Seattle, Washington, through
subsidiaries, provides financial services to individuals and small- to
mid-sized businesses, including accepting deposits from the general
public and making residential and other loans. The company's offices are
located throughout the United States.
Wells Fargo Company, headquartered in San Francisco, California, is a
diversified financial services company providing banking, insurance,
investments, mortgage and consumer finance services. The company
operates through offices in the United States, Canada, the Caribbean,
Latin America and elsewhere internationally.
Financial Services
__________________
American Express Company, headquartered in New York, New York, with
subsidiaries, provides travel-related services including travelers'
cheques, credit cards, consumer lending, tour packages and itineraries,
and publications. The company also provides diversified financial
products and services and international banking services through offices
in 36 countries.
Capital One Financial Corporation, headquartered in Falls Church,
Virginia, issues Visa and MasterCard credit card products to customers
in the United States and the United Kingdom. The company also provides
consumer lending and deposit services.
Citigroup, Inc., headquartered in New York, New York, operates the
largest financial services company in the United States. The company
offers consumer, investment and private banking, life insurance,
property and casualty insurance, and consumer finance products such as
credit cards and personal loans.
Countrywide Credit Industries, Inc., headquartered in Calabasas,
California, originates, buys, sells and services mortgage loans,
including first-lien mortgage loans secured by single-family residences.
The company also offers home equity loans in conjunction with newly
produced first-lien mortgages as a separate product.
Fannie Mae, headquartered in Washington, D.C., provides ongoing
assistance to the secondary market for residential mortgages by
providing liquidity for residential mortgage investments.
Household International, Inc., headquartered in Prospect Heights,
Illinois, through subsidiaries, provides consumer financial services,
primarily offering consumer lending products to middle market consumers
in the United States, Canada and the United Kingdom.
MBNA Corporation, headquartered in Wilmington, Delaware, issues premium
and standard MasterCard and Visa bank credit cards, marketed mainly
through endorsements of membership associations and financial
institutions. The company also makes other consumer loans and offers
deposit products.
Providian Financial Corporation, headquartered in San Francisco,
California, operates as a consumer lending concern that offers a variety
of secured and unsecured loans to customers.
Insurance
_________
AFLAC Incorporated, headquartered in Columbus, Georgia, writes
supplemental health insurance, mainly limited to reimbursement for
medical, non-medical and surgical expenses of cancer treatment; and
sells individual and group life, accident and health insurance.
The Allstate Corporation, headquartered in Northbrook, Illinois, through
subsidiaries, writes property-liability insurance, primarily private
passenger automobile and homeowners policies; and offers life insurance,
annuity and group pension products.
American International Group, Inc., headquartered in New York, New York,
provides a broad range of insurance and insurance-related activities and
financial services in the United States and abroad.
The Chubb Corporation, headquartered in Warren, New Jersey, writes
property and casualty insurance, including personal and commercial
insurance coverage. The company also develops real estate, mainly in New
Jersey and Florida.
The Equitable Companies Incorporated, headquartered in New York, New
York, provides a broad range of financial services and products,
including individual insurance, annuities, mutual funds, investment
management, investment banking, securities transaction and brokerage
services.
MGIC Investment Corporation, headquartered in Milwaukee, Wisconsin,
through subsidiaries, provides private mortgage insurance in the United
States to savings institutions, mortgage bankers, commercial banks,
mortgage brokers, credit unions and other lenders.
Page 25
Nationwide Financial Services, Inc. (Class A), headquartered in
Columbus, Ohio, offers long-term savings and retirement products to
retail and institutional customers throughout the United States.
Products offered by the company include variable and fixed annuities,
life insurance, mutual funds, retirement products and administrative
services.
Progressive Corporation, headquartered in Mayfield Heights, Ohio,
through subsidiaries, provides personal automobile insurance and other
specialty property-casualty insurance and related services. The company
sells primarily through independent insurance agents in the United
States and Canada.
Investment Services
___________________
Lehman Brothers Holdings, Inc., headquartered in New York, New York,
through wholly-owned Lehman Brothers Inc., provides securities
underwriting, financial advisory and investment and merchant banking
services, securities and commodities trading as principal and agent, and
asset management to institutional, corporate, government and high-net-
worth individual clients throughout the United States and the world.
Merrill Lynch & Company, Inc., headquartered in New York, New York,
through subsidiaries, provides broker, trading and underwriting
services; investment banking and corporate finance advisory services;
asset management; trading of foreign exchange instruments, futures,
commodities, and derivatives; securities clearance services; banking,
trust, and lending services; and insurance services.
Morgan Stanley Dean Witter & Co., headquartered in New York, New York,
provides a broad range of nationally-marketed credit and investment
products with a principal focus on individual customers. The company
provides investment banking, transaction processing, private-label
credit cards and various other investment advisory services.
The Charles Schwab Corporation, headquartered in San Francisco,
California, through subsidiaries, provides discount securities brokerage
and related financial services; and offers trade execution services for
Nasdaq securities to broker-dealers and institutional customers.
T. Rowe Price Associates, Inc., headquartered in Baltimore, Maryland,
serves as investment adviser to the T. Rowe Price family of no-load
mutual funds and other sponsored investment portfolios and institutional
and individual private accounts. The company also provides certain
administrative and shareholder services to the Price funds and other
mutual funds.
Internet FlexPortfolio Series
Access/Information Providers
_____________________________
AT&T Corporation, headquartered in New York, New York, provides voice,
data and video telecommunications services; regional, domestic,
international and local communication transmission services; cellular
telephone and other wireless services; cable television services;
billing, directory and calling card services; and credit card services.
America Online, Inc., headquartered in Sterling, Virginia, provides
online services to consumers in the United States, Canada, Europe and
Japan offering subscribers a wide variety of services including
electronic mail, conferencing, news, sports, Internet access,
entertainment, weather, stock quotes, software, computing support and
online classes.
Global Crossing Ltd., headquartered in Hamilton, Bermuda, provides
global internet and long distance telecommunications facilities and
services utilizing a network of undersea digital fiber optic cable
systems and associated land-based capacity.
MCI WorldCom, Inc., headquartered in Jackson, Mississippi, through
subsidiaries, provides long distance and local products, 800 services,
calling cards, domestic and international private lines, broadband data
services, debit cards, conference calling, fax and data connections, and
interconnection to Internet service providers.
MindSpring Enterprises, Inc., headquartered in Atlanta, Georgia,
provides Internet access serving individual subscribers.
Qwest Communications International, Inc., headquartered in Denver,
Colorado, provides communications services to inter-exchange carriers
and other communications entities, businesses and consumers.
Date Networking/Communications Equipment
________________________________________
Cisco Systems, Inc., headquartered in San Jose, California, develops,
makes, sells and supports high performance Internet-working systems that
link geographically dispersed local and wide area networks to form a
single, seamless information infrastructure.
Page 26
Lucent Technologies, Inc., headquartered in Murray Hill, New Jersey, is
one of the world's leading designers, developers and manufacturers of
telecommunications systems, software and products. The company is a
leading global marketer of business communications systems and computers.
Northern Telecom Ltd. (Nortel), headquartered in Brampton, Ontario,
Canada, provides communications solutions and telecommunications
equipment and related services in Asia, North, Central and South
America, the Caribbean, Europe, the Middle East and the Pacific Rim. The
company also provides products and services to the telecommunications
and cable television industries, businesses, universities and others
worldwide.
Tellabs, Inc., headquartered in Lisle, Illinois, makes and services
voice, data and video transport and network access systems used by
public telephone companies, long distance carriers, alternate service
providers, cellular providers, cable operators, government agencies,
utilities and business end-users.
Computers & Peripherals
_______________________
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
makes, markets and supports a wide range of storage-related hardware,
software and service products for the open systems, mainframe and
network attached information storage and retrieval system markets.
International Business Machines Corporation, headquartered in Armonk,
New York, provides customer solutions through the use of advanced
information technologies. The company offers a variety of solutions that
include services, software, systems, products, financing and technologies.
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. The company's software utilizes the
UNIX operating system.
Internet Content
________________
CMGI, Inc., headquartered in Andover, Massachusetts, offers a wide
variety of direct marketing services including mailing lists, leading
edge database management, design and development capabilities,
consultative list management and brokerage services, Internet and
interactive media direct marketing software technologies.
The Walt Disney Company, headquartered in Burbank, California, operates
as a diversified international entertainment company with operations
consisting of filmed entertainment, theme parks and resorts and consumer
products. Disney also has broadcasting (including Capital Cities/ABC,
Inc.), publishing operations and a rapidly growing Internet presence
including Web sites and an interest in an Internet search engine.
TMP Worldwide, Inc., headquartered in New York, New York, provides
comprehensive, individually tailored advertising services, including
development of creative content, media planning, production and
placement of corporate advertising, market research, direct marketing
and other ancillary products and services.
On-Line Retailing
_________________
E*TRADE Group, Inc., headquartered in Palo Alto, California, provides
online discount brokerage services, using its proprietary processing
technology. Services include automated order placement, portfolio
tracking and related market information, news and other information.
Charles Schwab Corporation, headquartered in San Francisco, California,
through subsidiaries, provides discount securities brokerage and related
financial services and offers trade execution services for Nasdaq
securities to broker/dealers and institutional customers. The company
offers many online services, including trading of stocks and access to
research.
Semiconductors
______________
Broadcom Corporation, headquartered in Irvine, California, develops
highly integrated silicon solutions that enable broadband digital
datatransmission to the home and within the business enterprise.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
Page 27
related products at various levels of integration. Microcomputer
components are integrated circuits consisting of silicon-based
semiconductors etched with complex patterns of transistors.
Software
_________
Check Point Software Technologies, Ltd., headquartered in Ramat Gan,
Israel, develops, sells and supports network security software products
that enable connectivity with security and manageability.
Microsoft Corporation, headquartered in Redmond, Washington, makes,
sells and licenses software products including operating systems, server
applications, business and consumer products, Internet software
technologies and development tools. The company also markets personal
computer books and input devices, and researches and develops software
technologies.
Network Associates, Inc., headquartered in Santa Clara, California,
develops, markets, distributes and supports network security and
management software products including anti-virus protection, as well as
client/server network management tools.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management and network products,
application development and business intelligence productivity tools,
and client server business applications.
Pharmaceutical FlexPortfolio Series
ALZA Corporation, headquartered in Palo Alto, California, develops,
makes and markets a broad range of transdermal, oral and other
therapeutic systems, which are pharmaceutical products designed to
provide controlled, predetermined rates of medication release over
extended time periods.
Abbott Laboratories, headquartered in North Chicago, Illinois,
discovers, develops, makes and sells a broad and diversified line of
healthcare products and services.
American Home Products Corporation, headquartered in Madison, New
Jersey, makes nutritionals, cardiovascular and metabolic disease
therapies, mental health products, anti-inflammatory/analgesic products
and vaccines, and over-the-counter drugs. The company also makes crop
protection and pest control products.
Amgen, Inc., headquartered in Thousand Oaks, California, 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.
Bristol-Myers Squibb Company, headquartered in New York, New York,
produces and distributes pharmaceuticals, consumer medicines,
nutritionals, medical devices and beauty care products.
Elan Corporation Plc (ADR), headquartered in Dublin, Ireland, develops
and licenses drug delivery systems formulated to increase the
therapeutic value of certain medications, with reduced side effects. The
company also develops and markets therapeutic agents to diagnose and
treat central nervous system diseases and disorders.
Eli Lilly and Company, headquartered in Indianapolis, Indiana, with
subsidiaries, develops, makes and markets pharmaceutical and animal
health products sold in countries around the world. The company also
provides healthcare management services in the United States.
Genzyme Corporation (General Division), headquartered in Cambridge,
Massachusetts, develops and markets specialty therapeutic, surgical and
diagnostic products, pharmaceuticals and genetic diagnostic services.
The company also develops, makes and markets biological products for the
treatment of cartilage damage, severe burns, chronic skin ulcers and
neurodegenerative diseases.
Glaxo Wellcome Plc (ADR), headquartered in London, England, conducts
research into and develops, makes and markets ethical pharmaceuticals
around the world. Products include gastro-intestinal, respiratory, anti-
emesis, anti-migraine, systemic antibiotics, cardiovascular,
dermatological, foods and animal health.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Jones Pharma, Inc., headquartered in St. Louis, Missouri, makes and
sells pharmaceuticals, including products that serve the thyroid
treatment and the critical care segments of the healthcare industry, as
Page 28
well as the companion animal segment of the veterinary industry.
Merck & Company, Inc., headquartered in Whitehouse Station, New Jersey,
is a leading pharmaceutical concern that discovers, develops, makes and
markets a broad range of human and animal health products and services.
The company also administers managed prescription drug programs.
Mylan Laboratories, Inc., headquartered in Pittsburgh, Pennsylvania,
develops, makes and distributes generic and proprietary pharmaceutical
and wound care products for resale by others. Products include solid
oral dosage forms, as well as suspensions, liquids, injectables and
transdermals, many of which are packaged in specialized systems.
Novartis AG (ADR), headquartered in Basel, Switzerland, manufactures
healthcare products for use in a broad range of medical fields, as well
as nutritional and agricultural products. The company markets its
products worldwide.
Pfizer, Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries,
baby care products, dental rinse and other proprietary health items.
Roche Holdings AG (ADR), headquartered in Basel, Switzerland, develops
and manufactures pharmaceutical and chemical products. Through its
subsidiaries, the company develops pharmaceuticals and drugs, fine
chemicals and vitamins, fragrances and flavors, diagnostic equipment and
liquid crystals. Products are distributed throughout the United States,
Europe, Asia and Latin America.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health, over-the-
counter, foot care and sun care products.
SmithKline Beecham Plc (ADR), headquartered in Middlesex, England,
discovers, develops, makes and sells pharmaceuticals, vaccines, over-the-
counter medicines and health-related consumer products. The company also
provides healthcare services, including disease management, clinical
laboratory testing and pharmaceutical benefit management.
Warner-Lambert Company, headquartered in Morris Plains, New Jersey,
makes consumer healthcare products including over-the-counter health
products, shaving products and pet care products; confectionery products
including chewing gums, breath mints and hard candies; ethical
(prescription) pharmaceuticals, biologicals and empty gelatin capsules.
Watson Pharmaceuticals, Inc., headquartered in Corona, California,
researches, develops and sells off-patent and proprietary pharmaceutical
products, including therapeutic equivalents of solid, liquid and
sustained release products.
Technology FlexPortfolio Series
Computer & Peripherals
______________________
Compaq Computer Corporation, headquartered in Houston, Texas, makes and
markets desktop personal computers, portable computers, workstations,
communications products and tower PC servers, and peripheral products
that store and manage data in network environments. The company's
products are marketed mainly to business, home, government and education
customers.
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of computer
systems including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
EMC Corporation, headquartered in Hopkinton, Massachusetts, designs,
makes, markets and supports a wide range of storage-related hardware,
software and service products for the open systems, mainframe and
network attached information storage and retrieval system markets.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, solid state components and instrumentation for
chemical analysis.
International Business Machines Corporation, headquartered in Armonk,
New York, provides customer solutions through the use of advanced
Page 29
information technologies. The company offers a variety of solutions that
include services, software, systems, products, financing and technologies.
Solectron Corporation, headquartered in Milpitas, California, provides a
complete range of advanced manufacturing services, including
sophisticated electronic assembly and turnkey manufacturing management
services, to original equipment manufacturers in the electronics industry.
Sun Microsystems, Inc., headquartered in Palo Alto, California, supplies
network computing products including desktop systems, storage
subsystems, network switches, servers, software, microprocessors and a
full range of services and support. The company's software utilizes the
UNIX operating system.
Computer Software & Services
_____________________________
BMC Software, Inc., headquartered in Houston, Texas, provides high
performance systems management software products for mainframe and
client/server based information systems. The company also sells and
provides maintenance enhancement and support services for its products.
Compuware Corporation, headquartered in Farmington Hills, Michigan,
develops, sells and supports an integrated line of software products, as
well as client/server systems management and application development
products. The company also offers data processing professional services.
Keane, Inc., headquartered in Boston, Massachusetts, provides software
consulting, development, integration, management and technical support
services to corporations, government agencies and healthcare facilities.
The company helps clients leverage their existing information systems
capability and more effectively manage software applications.
Microsoft Corporation, headquartered in Redmond, Washington, makes,
sells and licenses software products including operating systems, server
applications, business and consumer products, Internet software
technologies and development tools. The company also markets personal
computer books and input devices, and researches and develops software
technologies.
Network Associates, Inc., headquartered in Santa Clara, California,
develops, markets, distributes and supports network security and
management software products including anti-virus protection, as well as
client/server network management tools.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management and network products,
application development and business intelligence productivity tools,
and client server business applications.
SAP AG (ADR), headquartered in Walldorf, Germany, is a multi-national
software company which develops business software, consults on
organizational usage of its application software and provides training
services. The company also markets its products and services through
subsidiaries, distributors and other business partners worldwide.
Data Networking/Communications Equipment
________________________________________
Cisco Systems, Inc., headquartered in San Jose, California, develops,
makes, sells and supports high performance Internet-working systems that
link geographically dispersed local and wide area networks to form a
single, seamless information infrastructure.
Lucent Technologies, Inc., headquartered in Murray Hill, New Jersey, is
one of the world's leading designers, developers and manufacturers of
telecommunications systems, software and products; and is a leading
global marketer of business communications systems and computers.
Northern Telecom Ltd., headquartered in Ontario, Canada, makes fully
digital telecommunications switching equipment and communications
equipment and systems for business and residential use.
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.
Semiconductors & Semiconductor
Equipment
______________________________
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.
Applied Materials, Inc., headquartered in Santa Clara, California,
develops, makes, sells and services semiconductor wafer fabrication
equipment and related spare parts for the worldwide semiconductor
industry.
Page 30
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Microcomputer
components are integrated circuits consisting of silicon-based
semiconductors etched with complex patterns of transistors.
Maxim Integrated Products, Inc., headquartered in Sunnyvale, California,
designs and makes linear and mixed-signal integrated circuits. Products
include data converters, interface circuits, microprocessor supervisors
and amplifiers.
Novellus Systems, Inc., headquartered in San Jose, California, designs,
makes, sells, and services chemical vapor deposition equipment used in
the fabrication of integrated circuits. The company sells its products
to semiconductor manufacturers worldwide.
Synopsys, Inc., headquartered in Mountain View, California, develops,
markets and supports electronic design automation products for designers
of integrated circuits and electronic systems. The company also provides
training, support and consulting services for its customers.
Texas Instruments, Inc., headquartered in Dallas, Texas, designs and
makes digital signal processors, analog integrated circuits and other
semiconductor products. Other products include electrical and electronic
controls, electronic connectors, sensors, radio-frequency identification
systems, clad metals and educational and graphing calculators.
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The accrued Sponsor retention (which is entirely deferred).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
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 earlier of
six months after the Initial Date of Deposit or the end of the initial
offering period (a significantly shorter time period than the life of
the Trusts). During the period ending with the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period, there may be a decrease in the value of the Securities. To the
extent the proceeds from the sale of these Securities are insufficient
to repay the Sponsor for Trust organization costs, the Trustee will sell
additional Securities to allow a Trust to fully reimburse the Sponsor.
In that event, the net asset value per Unit of a Trust will be reduced
by the amount of additional Securities sold. Although the dollar amount
of the reimbursement due to the Sponsor will remain fixed and will never
exceed the per Unit amount set forth for a Trust in "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, 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
Page 31
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units 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.
Sponsor Retention.
The maximum Sponsor retention you will pay is entirely deferred. This
deferred sales charge is equal to approximately $.05 per Unit per year and
will be accrued daily at the rate of $.00013721 per Unit and paid on the
20th day of each month (or if the 20th day is not a business day on the
preceding business day) beginning April 20, 1999 and continuing for the
life of the Trusts and at a Trust's termination. On the Initial Date of
Deposit this fee will equal 2.5% of the Public Offering Price(equivalent
to 2.5% of the net amount invested) but because this fee is a fixed
dollar amount per Unit it will vary from 2.5% as the Public Offering
Price varies from $10 per Unit. However, in no event will the maximum
Sponsor retention exceed 4.0% of the Public Offering Price per
Unit. Units purchased subsequent to the initial Sponsor retention
payment will be subject only to those Sponsor retention payments not yet
collected.
The Value of the Securities.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, 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 value of the Securities on the ask side of the
market, or
c) By any combination of the above.
The Evaluator will appraise the value of the underlying Securities in
the Trusts 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 New York Stock Exchange ("NYSE"): New Year's Day, Martin
Luther King, Jr.'s Birthday, Presidents' 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
value of the Securities in a Trust, plus or minus cash, if any, in the
Income and Capital Accounts of such Trust plus the accrued Sponsor
retention. We calculate the aggregate underlying 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.
Distribution of Units
We intend to qualify Units of the Trust 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").
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
Page 32
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 Sponsor fee on Units sold by such persons during such
programs. We make these payments out of our own assets, and not out of a
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
the Trusts (which may show performance net of the expenses and charges
the Trusts would have incurred) and returns over specified periods of
other similar trusts we sponsor in our advertising and sales materials,
with (1) returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, the New York Times, U.S. News and World Report, 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 the Sponsor retention per Unit 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 Schedule of Investments"). During the
initial offering period, dealers and others may also realize profits or
sustain losses as a result of fluctuations in the Public Offering Price
they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which Units are purchased and the price at which they are sold (which
includes the Sponsor retention) 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. We may also realize profits or
losses as we create additional Units for the Distribution Reinvestment
Option.
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.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive the proceeds from the
sale of Units we purchase no later than if they were redeemed by the
Trustee. We may tender Units that we hold to the Trustee for redemption
as any other Units. If we elect not to purchase Units, the Trustee may
sell tendered Units in the over-the-counter market, if any. However, the
amount you will receive is the same as you would have received on
redemption of the Units.
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 each Trust 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 a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee 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
Page 33
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 fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
In addition to a Trust's operating expenses, and those fees described
above, each Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- - The expenses and costs incurred by the Trustee to protect a Trust and
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; and
- - 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 the Trusts. 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 the Trusts.
These sales may result in capital gains or losses to the Unit holders.
See "Tax Status."
The Trusts will be audited on an annual basis. So long as we are making
a secondary market for Units, we will bear the cost of these annual
audits to the extent the cost exceeds $0.0050 per Unit. Otherwise, the
Trusts will pay for the audit. You can receive a copy of the audited
financial statements by notifying the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay the Sponsor retention.
Page 34
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 Sponsor retention, among each Security or other
Trust asset ratably according to their value on the date you purchase
your Units. In certain circumstances, however, you may have to adjust
your tax basis after you purchase your Units (for example, in the case
of certain dividends that exceed a corporation's accumulated earnings
and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Securities 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 a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the 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.
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.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as record owner of Units that person registered
as such on its books. If you request certificates representing the Units
you ordered 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 your 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
Page 35
business days of the issuance or transfer of Units held in
uncertificated form, the Trustee will send to you, as the registered
owner of Units:
- - 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.
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 such
Trust. All other receipts, such as return of capital, are credited to
the Capital Account of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information" for each Trust. 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, to pay the Sponsor
retention or to 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 Sponsor retention 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 Sponsor retention, the Trustee may sell
Securities to meet the shortfall. We will designate an account where
distributions will be made to pay the Sponsor retention.
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
Page 36
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 you will receive
the pro rata share of the money from the disposition of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
All Unit holders will receive a pro rata share of any other assets
remaining in your Trust, excluding any unpaid expenses of such 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 such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. You will have to pay any remaining Sponsor retention on any Units
acquired pursuant to this distribution reinvestment option. This option
may not be available in all states. Please note that even if you
reinvest distributions, they are still considered distributions for
income tax purposes.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are 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. In addition, you will not be assessed the amount of any
remaining unaccrued Sponsor retention when you sell or redeem your
Units. 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.
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 in 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. As a result, your
broker/dealer or the Sponsor may at any time place limits on the number
of exchanges between FlexPortfolios you can make with or without prior
notice. However, any limitation on your right to exchange between
FlexPortfolios will have no effect on your right to redeem Units.
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.
Page 37
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation.
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made; and
5. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Until the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period, the Redemption Price per Unit will
include estimated organization costs as set forth under "Fee Table."
The aggregate underlying 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."
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations; 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 the
Trusts, will reject any offer for new or exchanged securities or
property in exchange for a Security, such as those acquired in a merger
or other transaction. If such exchanged securities or property are
nevertheless acquired by a Trust, at our instruction, they will either
be sold or held in such Trust. In making the determination as to whether
to sell or hold the exchanged securities or property we may get advice
from 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 a Trust to facilitate selling Securities,
exchanged securities or property from the Trusts. If we or our affiliate
act in this capacity, we will be held subject to the restrictions under
the Investment Company Act of 1940, as amended.
The Trustee may sell Securities 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 a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Page 38
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date. The Trusts may be terminated earlier:
- - Upon the consent of 100% of the Unit holders of a Trust;
- - If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
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 Sponsor retention paid by such purchaser; however,
termination of a Trust for any other stated reason will result in the
waiver of any remaining Sponsor retention payments at the time of
termination. For various reasons, including Unit holders' exchanging
between FlexPortfolios, 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
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 Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive a distribution of shares of Securities (an "In-
Kind Distribution") (reduced by customary transfer and registration
charges and subject to any additional restrictions imposed by your "Wrap
Fee" plan) 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 the In-Kind Distribution option for
eligible Unit holders you will receive a cash distribution from the sale
of the remaining Securities, along with your interest in the Income and
Capital Accounts of your Trust, within a reasonable time after such
Trust is terminated. Regardless of the distribution involved, the
Trustee will deduct from the Trusts any accrued costs, expenses,
advances or indemnities provide 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
Page 39
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 for the
Trusts; 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.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor Sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trusts, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
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,
Page 40
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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FIRST TRUST (registered trademark)
America's Leading Brands FlexPortfolio Series
Energy FlexPortfolio Series
Financial Services FlexPortfolio Series
Internet FlexPortfolio Series
Pharmaceutical FlexPortfolio Series
Technology FlexPortfolio Series
FT 336
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-74081) 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
April 7, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 44
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 336 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing ("Prospectus").
This Information Supplement is dated April 7, 1999. Capitalized terms
have been defined in the Prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentrations
Consumer Products 2
Energy 2
Financial Services 3
Pharmaceutical 6
Technology 7
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, 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
Page 1
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the 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 Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentrations
Consumer Products. An investment in the America's Leading Brands
FlexPortfolio Series should be made with an understanding of the
problems and risks inherent in an investment in the consumer products
industry in general. These include the cyclicality of revenues and
earnings, changing consumer demands, regulatory restrictions, product
liability litigation and other litigation resulting from accidents,
extensive competition (including that of low-cost foreign competition),
unfunded pension fund liabilities and employee and retiree benefit costs
and financial deterioration resulting from leveraged buy-outs, takeovers
or acquisitions. In general, expenditures on consumer products will be
affected by the economic health of consumers. A weak economy with its
consequent effect on consumer spending would have an adverse effect on
consumer products companies. Other factors of particular relevance to
the profitability of the industry are the effects of increasing
environmental regulation on packaging and on waste disposal, the
continuing need to conform with foreign regulations governing packaging
and the environment, the outcome of trade negotiations and the effect on
foreign subsidies and tariffs, foreign exchange rates, the price of oil
and its effect on energy costs, inventory cutbacks by retailers,
transportation and distribution costs, health concerns relating to the
consumption of certain products, the effect of demographics on consumer
demand, the availability and cost of raw materials and the ongoing need
to develop new products and to improve productivity.
Energy. An investment in Units of the Energy FlexPortfolio Series should
be made with an understanding of the problems and risks such an
investment may entail.
The Energy FlexPortfolio Series invests in Equity Securities of
companies involved in the energy industry. The business activities of
companies held in the Energy FlexPortfolio Series may include:
production, generation, transmission, marketing, control, or measurement
of gas and oil; the provision of component parts or services to
companies engaged in the above activities; energy research or
experimentation; and environmental activities related to the solution of
energy problems, such as energy conservation and pollution control.
Companies participating in new activities resulting from technological
advances or research discoveries in the energy field were also
considered for the Energy FlexPortfolio Series.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
conservation, the success of exploration projects, and tax and other
regulatory policies of various governments. As a result of the
foregoing, the Equity Securities in the Energy FlexPortfolio Series may
Page 2
be subject to rapid price volatility. The Sponsor is unable to predict
what impact the foregoing factors will have on the Equity Securities
during the life of the Energy FlexPortfolio Series.
According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in 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 restoration of a large portion of
Kuwait and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand.
Formerly, OPEC members attempted to exercise control over production
levels in each country through a system of mandatory production quotas.
Because of the 1990-1991 crisis in the Middle East, the mandatory system
has since been replaced with a voluntary system. Production under the
new system has had to be curtailed on at least one occasion as a result
of weak prices, even in the absence of supplies from Kuwait and Iraq.
The pressure to deviate from mandatory quotas, if they are reimposed, is
likely to be substantial and could lead to a weakening of prices. In the
longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers to significantly affect production, the concomitant volatility
of crude oil prices, increasing public and governmental concern over air
emissions, waste product disposal, fuel quality and the environmental
effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Energy FlexPortfolio
Series.
Financial Services. An investment in Units of the Financial Services
FlexPortfolio Series should be made with an understanding of the
problems and risks inherent in the bank and financial services sector in
general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
Page 3
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
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 Equity 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 has recently been signed into law. Under the legislation, banks
will be able to purchase or establish subsidiary banks in any state, one
year after the legislation's enactment. Since mid-1997, banks have been
allowed to turn existing banks into branches. Consolidation is likely to
continue. The Securities and Exchange Commission and the Financial
Accounting Standards Board require the expanded use of market value
accounting by banks and have imposed rules requiring market accounting
for investment securities held in trading accounts or available for
sale. Adoption of additional such rules may result in increased
volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. Additional legislative
and regulatory changes may be forthcoming. For example, the bank
regulatory authorities have proposed substantial changes to the
Community Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such
changes would have on the Equity Securities in the 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 the 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
Page 4
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Equity Securities or whether such approvals, if necessary,
will be obtained.
Some of the nation's largest banks, already working to upgrade their own
computer systems to meet the Year 2000 deadline, are concerned that some
borrowers may fail to upgrade their computers in time, creating problem
loans and increasing overall loan losses. Banks considered most
vulnerable by analysts include those lending primarily to small
businesses, which aren't as likely as large businesses to have a plan
for upgrading their computers. Also at risk are banks with significant
exposure overseas, where many foreign businesses are not moving as
quickly to resolve this problem. Analysts warn that it will be difficult
for banks to determine their potential loan losses related to Year 2000
credit risk.
Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(vii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to
Page 5
comply with these laws and regulations would cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.
Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini-Superfunds ("Environmental Clean-up
Laws or "ECLs") establish a mechanism to pay for clean-up of waste sites
if PRP's fail to do so, and to assign liability to PRP's. The extent of
liability to be allocated to a PRP is dependent on a variety of factors.
The extent of clean-up necessary and the assignment of liability has not
been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
Proposed federal legislation which would permit banks greater
participation in the insurance business could, if enacted, present an
increased level of competition for the sale of insurance products. In
addition, while current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as the stock
prices, of these companies. Furthermore, there can be no assurance that
the issuers of the Equity Securities included in the Financial Services
FlexPortfolio Series will be able to respond in a timely manner to
compete in the rapidly developing marketplace. In addition to the
foregoing, profit margins of these companies continue to shrink due to
the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.
Pharmaceutical. An investment in Units of the Pharmaceutical
FlexPortfolio Series should be made with an understanding of the
characteristics of the pharmaceutical and medical industries and the
risks which such investment may entail.
Pharmaceutical companies are companies involved in drug development and
production services. Such companies have potential risks unique to their
sector of the healthcare field. Such companies are subject to
governmental regulation of their products and services, a factor which
could have a significant and possibly unfavorable effect on the price
and availability of such products or services. Furthermore, such
companies face the risk of increasing competition from generic drug
sales, the termination of their patent protection for drug products and
the risk that technological advances will render their products or
services obsolete. The research and development costs of bringing a drug
to market are substantial and include lengthy governmental review
processes, with no guarantee that the product will ever come to market.
Many of these companies may have losses and not offer certain products
for several years. Such companies may also have persistent losses during
a new product's transition from development to production, and revenue
patterns may be erratic.
The medical sector has historically provided investors with significant
growth opportunities. One of the industries included in the sector is
pharmaceutical companies. Such companies develop, manufacture and sell
prescription and over-the-counter drugs. In addition, they are well
known for the vast amounts of money they spend on world-class research
and development. In short, such companies work to improve the quality of
life for millions of people and are vital to the nation's health and
well-being.
As the population of the United States ages, the companies involved in
the pharmaceutical field will continue to search for and develop new
drugs through advanced technologies and diagnostics. On a worldwide
Page 6
basis, such companies are involved in the development and distributions
of drugs and vaccines. These activities may make the pharmaceutical
sector very attractive for investors seeking the potential for growth in
their investment portfolio. However, there are no assurances that the
Trust's objectives will be met.
Legislative proposals concerning healthcare are considered from time to
time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of
prescription drugs), national health insurance, incentives for
competition in the provision of healthcare services, tax incentives and
penalties related to healthcare insurance premiums and promotion of pre-
paid healthcare plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Securities in the
Trust.
Technology. An investment in Units of the Internet FlexPortfolio Series
or the Technology FlexPortfolio Series should be made with an
understanding of the characteristics of the technology industry and the
risks which such an investment may entail.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers and peripherals,
software and services, data networking/communications equipment,
internet access/information providers, semiconductors and semiconductor
equipment and other related products, systems and services. The market
for these products, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Equity Securities in such Trusts 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 Equity Securities in
such Trusts 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 Equity Securities in such
Trusts 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
Equity Securities in such Trusts will obtain orders of similar magnitude
as past orders from other customers. Similarly, the success of certain
technology companies is tied to a relatively small concentration of
products or technologies. Accordingly, a decline in demand of such
products, technologies or from such customers could have a material
adverse impact on issuers of the Equity Securities in such Trusts.
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 Equity 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 Equity
Securities in such Trusts.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 7
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 336, 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;
and 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 336, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on April 7, 1999.
FT 336
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 ) April 7, 1999
General Partner of )
Nike Securities L.P. )
)
)
David J. Allen Director of ) Robert M. Porcellino
Nike Securities ) Attorney-in-Fact**
Corporation, the )
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 April 7, 1999 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-74081) and related Prospectus of FT 336.
ERNST & YOUNG LLP
Chicago, Illinois
April 7, 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 336 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 336
File No. 333-74081
The Prospectus and the Indenture filed with Amendment No. 1
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 April 7, 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 10-15 The Schedules of Investments have been completed.
Back Cover The date of the Prospectus has been included.
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect
the execution thereof.
CHAPMAN AND CUTLER
April 7, 1999
FT 336
TRUST AGREEMENT
Dated: April 7, 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 AMERICA'S LEADING BRANDS FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR ENEGY FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR FINANCIAL SERVICES FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR INTERNET FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR PHARMACEUTICAL FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TECHNOLOGY FLEXPORTFOLIO SERIES
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
for the sale of Units dated the date hereof (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 $.0030 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 $.0095 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 April 7,
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.
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 22 shall include FT 336.
B. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
C. 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.
D. 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."
E. 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."
F. 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, and/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."
G. 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."
H. 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."
I. 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 earlier of six months
after the Initial Date of Deposit or 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 earlier of six months after
the Initial Date of Deposit or 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 earlier of six months after the Initial
Date of Deposit or 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 the 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 earlier of six months after
the Initial Date of Deposit or 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 earlier of
six months after the Initial Date of Deposit or 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 earlier of six months
after the Initial Date of Deposit or 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.
J. 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."
K. 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) if provided
for in the Prospectus, 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."
L. 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."
M. 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."
N. 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 Interest 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.
O. 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."
P. 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 $.0035 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."
Q. 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 Section
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 amount of $.0033 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 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 no 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.
R. 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."
S. 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.
T. 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."
U. 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, (iv) amounts representing unpaid accrued deferred
sales charge, and (v)";
(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
earlier of six months after the Initial Date of Deposit
or 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. "
V. 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 may redeem 1,000 Units or more of a
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 Capital 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, if applicable, 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."
W. 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)"
X. 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."
Y. 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."
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 A. 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 336
(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
April 7, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 336
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 336 in connection with the
preparation, execution and delivery of a Trust Agreement dated
April 7, 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. 333-74081)
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
April 7, 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 10004-2413
Re: FT 336
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 336 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in the Trusts of said Fund (the
"Trust"), under a Trust Agreement, dated April 7, 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 a Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
Each Trust holds Equity Securities as such term is defined in the
Prospectus. For purposes of the following discussion and
opinion, it is assumed that each Equity 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 United States Federal income tax
law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of the Trust under the Internal Revenue Code of 1986 (the
"Code") 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 a Trust.
II. The price a Unit holder pays for his Units, generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by a Trust (in proportion to the
fair market values thereof on the valuation date closest to the
date the Unit holder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Equity Security
held by a 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 an Equity Security ("dividends" as
defined by Section 316 of the Code) is 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 paid on such Equity Security which exceeds such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such
Equity Security shall be treated as gain from the sale or
exchange of property.
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 a
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
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, taxable 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 a Trust's assets (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 Equity Security which is 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 Equity 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 a Trust, a Unit
holder is considered as owning a pro rata portion of each of a
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 Equity Security owned by a Trust will depend
upon whether or not a Unit holder receives cash in addition to
Equity Securities. An "Equity 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 Equity Securities in exchange for his or her pro rata
portion of the Equity Securities held by a Trust. However, if a
Unit holder also receives cash in exchange for a fractional share
of an Equity 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 an Equity 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 Equity 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 such Trust (to the extent
such dividends are taxable as ordinary income, as discussed
above, and are attributable 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 an Equity Security is either
sold by a 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
Equity 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. 333-74081)
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
April 7, 1999
The Chase Manhattan Bank, as Trustee of
FT 336
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 336
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts contained in
FT 336 (each, a "Trust"), which will be established under 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 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.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-74081) 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 under the captions "What is the Federal Tax Status of
Unit-holders?" and "Legal Opinions" 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
April 7, 1999
The Chase Manhattan Bank, as Trustee of
FT 336
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 336
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
336 (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 hereunder (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
April 7, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 336
Gentlemen:
We have examined the Registration Statement File No.
333-74081 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 W. Bredemeier
Senior Vice President
