SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 338
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
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 the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION DATED MARCH 17, 1999
AMERICA'S LEADING BRANDS GROWTH PORTFOLIO, SERIES 5
COMMUNICATIONS GROWTH PORTFOLIO, SERIES 4
HEALTHCARE GROWTH PORTFOLIO, SERIES 3
RETAIL GROWTH PORTFOLIO, SERIES 3
FT 338
FT 338 consists of four 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.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
First Trust (registered trademark)
1-800-621-1675
The date of this prospectus is April __, 1999
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 5
Report of Independent Auditors 7
Statements of Net Assets 8
Schedules of Investments 10
The FT Series 14
Portfolios 15
Risk Factors 17
Portfolio Securities Descriptions 18
Public Offering 19
Distribution of Units 22
The Sponsor's Profits 23
The Secondary Market 23
How We Purchase Units 23
Expenses and Charges 23
Tax Status 24
Retirement Plans 25
Rights of Unit Holders 26
Income and Capital Distributions 26
Redeeming Your Units 27
Removing Securities from a Trust 28
Amending or Terminating the Indenture 29
Information on the Sponsor, Trustee and Evaluator 30
Other Information 31
Page 2
Summary of Essential Information
FT 338
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-April __, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
America's Leading Communications
Brands Growth Growth Portfolio
Portfolio, Series 5 Series 4
___________________ ________________
<S> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ $
Maximum Sales Charge of 4.5% of the Public Offering Price per Unit
(4.545% of the net amount invested,
exclusive of the deferred sales charge) (3) $ $
Less Deferred Sponsor fee per Unit $ (___) $ (___)
Public Offering Price per Unit (4) $ $
Sponsor's Initial Repurchase Price per Unit (5) $ $
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred sales charge) (5) $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date _______, 1999
Mandatory Termination Date (6) April __, 2004
Income Distribution Record Date Fifteenth day of each June and December commencing _______, 1999.
Income Distribution Date (7) Last day of each June and December commencing _______, 1999.
_____________
<FN>
See "Notes to Summary of Essential Information" on page 4.
</FN>
</TABLE>
Page 3
Summary of Essential Information
FT 338
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-April __, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Healthcare Growth Retail Growth
Portfolio, Series 3 Portfolio, Series 3
___________________ ___________________
<S> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ $
Maximum Sales Charge of 4.5% of the Public Offering Price per Unit
(4.545% of the net amount invested,
exclusive of the deferred sales charge) (3) $ $
Less Deferred Sponsor fee per Unit $ (___) $ (___)
Public Offering Price per Unit (4) $ $
Sponsor's Initial Repurchase Price per Unit (5) $ $
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred sales charge) (5) $ $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date _______, 1999
Mandatory Termination Date (6) April __, 2004
Income Distribution Record Date Fifteenth day of each June and December commencing _______, 1999.
Income Distribution Date (7) Last day of each June and December commencing _______, 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 sales charge is entirely deferred. See "Fee Table" and
"Public Offering" for additional information regarding these charges.
(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 Communications
Brands Growth Growth Portfolio
Portfolio, Series 5 Series 4
____________________ ________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase %(a) $ %(a) $
Deferred sales charge %(b) %(b)
Maximum sales charge % $ % $
===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends %(c) $ %(c) $
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated Organization Costs %(d) $ %(d) $
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees % %
Trustee's fee and other operating expenses % %
_____ ______ _____ ______
Total % $ % $
===== ====== ===== ======
Healthcare Growth Retail Growth
Portfolio, Series 3 Portfolio, Series 3
________________ __________________
Amount Amount
per Unit per Unit
________ ________
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase %(a) $ %(a) $
Deferred sales charge %(b) %(b)
Maximum sales charge % $ % $
===== ====== ===== ======
Maximum sales charge imposed on reinvested dividends %(c) $ %(c) $
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated Organization Costs %(d) $ %(d) $
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees % %
Trustee's fee and other operating expenses % %
_____ ______ _____ ______
Total % $ % $
===== ====== ===== ======
</TABLE>
Page 5
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 Growth Portfolio, Series 5 $ $ $
Communications Growth Portfolio, Series 4
Healthcare Growth Portfolio, Series 3
Retail Growth Portfolio, Series 3
The example will not differ if you hold rather than sell your Units at
the end of each period. The example does not reflect sales charges on
reinvested dividends and other distributions. If these sales charges
were included, your costs would be higher.
________________
<FN>
(a) The amount of the initial sales charge will vary depending on the
purchase price of your Units. The amount of the initial sales charge is
actually the difference between the maximum sales charge (4.5% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.35 per Unit). When the Public Offering Price exceeds $10.00
per Unit, the initial sales charge will exceed 1.00% of the Public
Offering Price per Unit.
(b) The deferred sales charge is a fixed dollar amount equal to $.35 per
Unit which will be deducted in five monthly installments of $.07 per
Unit beginning ____________, 1999 and on the 20th day of each month
thereafter (or the preceding business day if the 20th day is not a
business day) through ____________, 2000. If you buy Units at a price of
less than $10.00 per Unit, the dollar amount of the deferred sales
charge will not change but the deferred sales charge on a percentage
basis will be more than 3.5% of the Public Offering Price. If you
purchase Units after the first deferred sales charge payment has been
deducted, your purchase price will include both the initial sales charge
and any remaining deferred sales charge payments.
(c) Reinvested dividends will be subject only to the Sponsor fee
remaining at the time of reinvestment. See "Income and Capital
Distributions."
(d) You will bear all or a portion of the costs incurred in organizing
your respective Trust. These estimated organization costs are included
in the price you pay for your Units and will be deducted from the assets
of a Trust at the 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 338
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 338, comprised of America's Leading
Brands Growth Portfolio, Series 5; Communications Growth Portfolio,
Series 4; Healthcare Growth Portfolio, Series 3; and Retail Growth
Portfolio, Series 3, as of the opening of business on April __, 1999.
This statement of net assets is the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on this statement
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 statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on April __, 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 statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 338,
comprised of America's Leading Brands Growth Portfolio, Series 5;
Communications Growth Portfolio, Series 4; Healthcare Growth Portfolio,
Series 3; and Retail Growth Portfolio, Series 3, at the opening of
business on April __, 1999 in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April __, 1999
Page 7
Statements of Net Assets
FT 338
At the Opening of Business on the
Initial Date of Deposit-________, 1999
<TABLE>
<CAPTION>
America's Leading Communications
Brands Growth Growth Portfolio
Portfolio, Series 5 Series 4
___________________ ________________
<S> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( )
________ ________
Net assets $ $
======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $
Less maximum sales charge (5) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
___________
<FN>
See "Notes to Statements of Net Assets" on page 9.
</FN>
</TABLE>
Page 8
Statements of Net Assets (cont'd.)
FT 338
At the Opening of Business on the
Initial Date of Deposit-April __, 1999
<TABLE>
<CAPTION>
Healthcare Growth Retail Growth
Portfolio, Series 3 Portfolio, Series 3
___________________ ___________________
<S> <C> <C>
NET ASSETS
Investment in Securities represented
by purchase contracts (1) (2) $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( )
________ ________
Net assets $ $
======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $
Less maximum sales charge (5) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
_____________
<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 $__________ will be allocated among each of the four Trusts in
FT 338, 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 $___, $____,
$___ and $___ per Unit for the America's Leading Brands Growth
Portfolio, Series 5; Communications Growth Portfolio, Series 4;
Healthcare Growth Portfolio, Series 3 and Retail Growth Portfolio,
Series 3, respectively. A payment will be made at the earlier of six
months after the Initial Date of Deposit or the end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs of a Trust are greater than the
estimated amount, only the estimated organization costs added to the
Public Offering Price will be reimbursed to the Sponsor and deducted
from the assets of such Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from a Trust ($.35 per Unit), payable to us in five equal
monthly installments beginning on ____________, 1999 and on the
twentieth day of each month thereafter (or if such date is not a
business day, on the preceding business day) through ____________, 2000.
If you redeem Units before ____________, 2000 you will have to pay the
remaining amount of the deferred sales charge applicable to such Units
when you redeem them.
(5) The aggregate cost to investors includes a maximum sales charge
(comprised of an initial sales charge and a deferred sales charge)
computed at the rate of 4.5% of the Public Offering Price per Unit
(equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering."
</FN>
</TABLE>
Page 9
Schedule of Investments
America's Leading Brands Growth Portfolio, Series 5
FT 338
At the Opening of Business on the
Initial Date of Deposit-April __, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price (4) Share the Trust (2)
_________ _______________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
Apparel
___________
JNY Jones Apparel Group, Inc. 4% $ $
TOM Tommy Hilfiger Corporation 4%
Auto & Transportation
______________________________
F Ford Motor Company 4%
Beverages
_____________
BUD Anheuser-Busch Companies, Inc. 4%
PEP PepsiCo, Inc. 4%
Entertainment
____________________
DIS The Walt Disney Company 4%
Food
_______
CPB Campbell Soup Company 4%
HNZ H.J. Heinz Company 4%
HSY Hershey Foods Corporation 4%
SLE Sara Lee Corporation 4%
Household Products
___________________________
CLX The Clorox Company 4%
CL Colgate-Palmolive Company 4%
PG The Procter & Gamble Company 4%
Pharmaceuticals
______________________
JNJ Johnson & Johnson 4%
SGP Schering-Plough Corporation 4%
Recreation
_______________
CCL Carnival Corporation 4%
HDI Harley-Davidson, Inc. 4%
Restaurants
_______________
MCD McDonald's Corporation 4%
SBUX Starbucks Corporation 4%
Retail
___________
GPS The Gap, Inc. 4%
Technology
___________
INTC Intel Corporation 4%
Tobacco
___________
MO Philip Morris Companies, Inc. 4%
Toiletries & Cosmetics
______________________________
G The Gillette Company 4%
______ _________
Total Investments 100% $
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on page 13.
</FN>
</TABLE>
Page 10
Schedule of Investments
Communications Growth Portfolio, Series 4
FT 338
At the Opening of Business on the Initial Date of Deposit-April __, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price (4) Share the Trust (2)
_________ _______________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
Cable TV
________________
CMCSK Comcast Corporation (Class A Special) 4% $ $
UMG MediaOne Group, Inc. 4%
Communications Services
___________________________________
AT ALLTEL Corporation 4%
T AT&T Corp. 4%
BEL Bell Atlantic Corporation 4%
BLS BellSouth Corporation 4%
CWP Cable & Wireless Plc (ADR) 4%
DT Deutsche Telekom AG (ADR) 4%
WCOM MCI WorldCom, Inc. 4%
QWST Qwest Communications International Inc. 4%
SBC SBC Communications Inc. 4%
TEF Telefonica S.A. (ADR) 4%
Data Networking/Communications Equipment
_____________________________________________________________
ADCT ADC Telecommunications, Inc. 4%
CSCO Cisco Systems, Inc. 4%
CMVT Comverse Technology, Inc. 4%
ECILF ECI Telecom Limited (3) 4%
LU Lucent Technologies Inc. 4%
NT Northern Telecom Limited (Nortel) (3) 4%
TLAB Tellabs, Inc. 4%
Wireless Communications
____________________________________
ERICY LM Ericsson AB (ADR) 4%
MOT Motorola, Inc. 4%
NOK/A Nokia Oy (Class A) (ADR) 4%
QCOM QUALCOMM Incorporated 4%
SKYT SkyTel Communications Inc. 4%
VOD Vodafone Group Plc (ADR) 4%
______ _________
Total Investments 100% $
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on page 13.
</FN>
</TABLE>
Page 11
Schedule of Investments
Healthcare Growth Portfolio, Series 3
FT 338
At the Opening of Business on the Initial Date of Deposit-April __, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price (4) Share the Trust (2)
_________ _______________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
Healthcare Products
______________________
BDX Becton, Dickinson and Company 4% $ $
JNJ Johnson & Johnson 4%
MDT Medtronic, Inc. 4%
PDCO Patterson Dental Company 4%
STE STERIS Corporation 4%
SYK Stryker Corporation 4%
SYB Sybron International Corporation 4%
Healthcare Services
______________________
AAS AmeriSource Health Corporation (Class A) 4%
CAH Cardinal Health, Inc. 4%
HCR HCR Manor Care, Inc. 4%
HMA Health Management Associates, Inc. (Class A) 4%
HRC HEALTHSOUTH Corporation 4%
LNCR Lincare Holdings Inc. 4%
MCK McKesson HBOC, Inc. 4%
UNH UnitedHealth Group 4%
UHS Universal Health Services, Inc. (Class B) 4%
Pharmaceuticals/Biotech
______________________
ABT Abbott Laboratories 4%
AMGN Amgen Inc. 4%
BMY Bristol-Myers Squibb Company 4%
ELN Elan Corporation Plc (ADR) 4%
MRK Merck & Co., Inc. 4%
PFE Pfizer Inc. 4%
SGP Schering-Plough Corporation 4%
WLA Warner-Lambert Company 4%
WPI Watson Pharmaceuticals, Inc. 4%
______ _________
Total Investments 100% $
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on page 13.
</FN>
</TABLE>
Page 12
Schedule of Investments
Retail Growth Portfolio, Series 3
FT 338
At the Opening of Business on the Initial Date of Deposit-April __, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
Number of Aggregate Value Cost of
of Ticker Symbol and Offering per Securities to
Shares Name of Issuer of Securities (1) Price (4) Share the Trust (2)
_________ _____________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
ANF Abercrombie & Fitch Co. (Class A) 4% $ $
ABS Albertson's, Inc. 4%
BBBY Bed Bath & Beyond Inc. 4%
BBY Best Buy Co., Inc. 4%
CDWC CDW Computer Centers, Inc. 4%
COST Costco Companies, Inc. 4%
DH Dayton Hudson Corporation 4%
DG Dollar General Corporation 4%
DLTR Dollar Tree Stores, Inc. 4%
GPS The Gap, Inc. 4%
TOM Tommy Hilfiger Corporation 4%
HD Home Depot, Inc. 4%
IBI Intimate Brands, Inc. 4%
KSS Kohl's Corporation 4%
KR The Kroger Co. 4%
LOW Lowe's Companies, Inc. 4%
MAY The May Department Stores Company 4%
ODP Office Depot, Inc. 4%
ROST Ross Stores, Inc. 4%
SWY Safeway Inc. 4%
SPLS Staples, Inc. 4%
TJX The TJX Companies, Inc. 4%
TIF Tiffany & Co. 4%
WMT Wal-Mart Stores, Inc. 4%
WAG Walgreen Co. 4%
______ _________
Total Investments 100% $
====== =========
<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 __, 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 closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the close of
business 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 Growth Portfolio,
Series 5 $ $
Communications Growth Portfolio, Series 4 $ $
Healthcare Growth Portfolio, Series 3 $ $
Retail Growth Portfolio, Series 3 $ $
(3) This Security represents the common stock of a foreign company which
is traded directly on a United States securities exchange.
(4) Each Trust may contain additional Securities each of which will not
exceed the approximate percentage set forth under Approximate Percentage
of Aggregate Offering Price. Although it is not the Sponsor's intention,
certain of the Securities listed may not be included in a final
portfolio. Also, the percentages of the Aggregate Offering Price for the
Securities are approximate amounts and may vary in the final portfolios.
</FN>
</TABLE>
Page 13
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 four separate unit investment trusts which are
known as:
- - America's Leading Brands Growth Portfolio, Series 5
- - Communications Growth Portfolio, Series 4
- - Healthcare Growth Portfolio, Series 3
- - Retail Growth Portfolio, Series 3
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 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.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or our affiliate) to
act as agent for the Trusts to buy Securities. If we or an affiliate of
ours act as agent to the Trusts, we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be 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
Page 14
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.
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.
America's Leading Brands Growth Portfolio, Series 5 is a unit investment
trust which invests in a portfolio of common stocks of companies
considered to be leaders in their industries. The following factors
support our positive outlook for these companies:
- - 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.
Communications Growth Portfolio, Series 4 is a unit investment trust
which invests in a portfolio of common stocks of communications
companies, diversified across domestic and international companies
involved in cable TV, communications services, computer networking,
communications equipment, and wireless communications. In general, we
believe these companies have above-average growth prospects for both
sales and earnings, established market shares for their services, and
lower-than-average debt.
The communications industry is expected to benefit from the convergence
of a variety of industries, including entertainment, media, and
publishing. Deregulation and privatization of telecommunications
services both domestically and internationally have heightened
competition. As a result, leading companies in the communications
industry are poised for increased revenue and earnings growth potential
over the next several years.
The following factors support our positive outlook for companies in the
communications industry:
- - The Telecommunications Act of 1996 broke down many regulatory barriers
in the United States. Companies that were once prevented from offering
multiple communications services can now do so.
- - Foreign markets are opening at a rapid pace. In fact, 69 countries
representing more than 90% of world telecommunications revenue recently
signed an agreement to move to deregulation and privatization.
- - Recent advances, such as wireless phones, fiber optics, and the Internet
are allowing businesses, individuals, and governments greater access to
more services at lower costs.
Healthcare Growth Portfolio, Series 3 is a unit investment trust which
invests in a portfolio of common stocks of healthcare companies.
The United States government spent nearly $350 billion on healthcare
programs in 1997. The total amount of expenditures for the entire
industry was $1.1 trillion. Health care is the single largest component
of this nation's gross domestic product (GDP). We believe the demand for
healthcare products and services should be provided by an aging global
population. Additionally, we believe the industry is poised for more
consolidation through mergers, acquisitions and partnerships. Managing
Page 15
costs more effectively and implementing new technologies could help
increase profitability. The Healthcare Growth Portfolio is broadly
diversified so that it can participate in potential growth opportunities.
We believe that the government and the private sector strive to maintain
a balance between cost-containment and providing quality care. Managed
care programs, like HMOs and PPOs, are playing an ever expanding role in
this effort. According to the American Hospital Association (AHA), over
half of all surgeries performed in U.S. community hospitals are done on
an outpatient basis. Outpatient procedures help keep costs down and
create demand for medical products, devices and services. Embracing new
methods of servicing patients more efficiently is one way that managed
care is positively influencing the industry.
In addition, the demand for new cures, treatments and medical products
from an aging population provide further potential for growth. For
example, drug sales totaled an estimated $124 billion in the United
States and $315 billion worldwide in 1998. The demand for prescription
and over-the-counter drugs is driven more by need than by price, which
makes sales growth less cyclical.
The following factors support our positive outlook for the healthcare
Industry:
- - U.S. citizens that are 65 and older represent around 15% of the nation's
total population, but account for approximately one-third of total
healthcare costs.
- - Pharmaceuticals are playing a larger role in the industry, especially
with managed care companies, because they are regarded as a relatively
inexpensive form of medical treatment.
- - Managed care providers, especially HMOs, have shifted their strategic
focus from enrollment and market share to raising premiums to combat
escalating costs.
- - Mergers, acquisitions and partnerships are viewed as an effective means
of achieving growth in light of extraordinarily high research and
development costs.
Retail Growth Portfolio, Series 3 is a unit investment trust which
invests in a portfolio of common stocks of retail companies.
When it comes to the power of vote, few do it better than the consumer.
Every day consumers cast their votes with dollars. Now more than ever,
consumers demand quality and selection at a reasonable price.
Additionally, consumers are spending less time shopping, but spending
more money per visit. In fact, industry analysts have even coined a new
phrase for this called "precision shopping."
The key to success in retail is to win over the consumer. After all,
their spending accounts for a significant portion of the annual U.S.
gross domestic product.
The following factors support our positive outlook for the retail
industry:
- - Retailers tend to prosper during economic cycles that boast low interest
rates, low unemployment, personal income growth and high levels of
consumer confidence. The U.S. economy is healthy and is currently
enjoying a sustained period of low inflation and stable interest rates.
Unemployment rates are historically low and consumer confidence levels
hover near the 1998 record high.
- - The retail industry employs over 20 million people. That equates to one
in five U.S. workers, according to the U.S. Department of Labor.
- - The Internet could play a key role in retail because it enables
companies to market and distribute product cost-effectively without
geographical limitations.
- - Success often hinges on finding new growth opportunities. Some
historical retail trends that proved successful were department stores,
malls, specialty retail and national discounters. The Internet could
evolve into the next successful trend. It offers benefits like
convenience, selection and pricing. Though still in its infancy, more
than 58 million adults are online in the United States. alone, a figure
that is expected to grow substantially over the years to come.
Retailers all share a common challenge which is to increase profits
while reducing costs. We believe that growth in the retail sector will
come from such initiatives as opening new stores, the Internet, brand
building and mergers. It is our belief that a portfolio of industry
leading retailers offers value and growth potential for the future.
Page 16
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 are issued by companies with
market capitalizations of less than $1 billion. The share prices of
these small-cap companies are often more volatile than those of larger
companies. 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 Growth
Portfolio, Series 5 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.
Communications Industry. The Communications Growth Portfolio, Series 4
includes companies that are involved in the communications industry.
Communications 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. Rapid
deregulation, both in the United States and internationally, allows
companies to develop products and service for a larger market, but also
exposes them to fierce global competition.
Healthcare Industry. The Healthcare Growth Portfolio, Series 3 includes
companies involved in medical supplies, drugs, biotech, managed care and
services management. General risks of such companies involve extensive
competition, generic drug sales or the loss of patent protection,
product liability litigation and increased government regulation.
Research and development costs of bringing new drugs to market are
substantial, and there is no guarantee that the product will ever come
to market. Healthcare facility operators may be affected by the demand
for services, efforts by government or insurers to limit rates,
restriction of government financial assistance and competition from
other providers.
Retail Industry. The Retail Growth Portfolio, Series 3 includes
companies involved in the retail industry. General risks of these
companies include the general state of the economy, intense competition
and consumer spending trends. A decline in the economy which results in
a reduction of consumers' disposable income can negatively impact
spending habits. Competitiveness in the retail industry will require
large capital outlays for the installation of automated checkout
equipment to control inventory, track the sale of items and gauge the
success of sales campaigns. Retailers who sell their products over the
Internet have the potential to access more consumers, but will require
sophisticated technology to remain competitive.
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.
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
Page 17
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 Growth Portfolio, Series 5
Apparel
_______
Jones Apparel Group, Inc.
Tommy Hilfiger Corporation
Auto & Transportation
_____________________
Ford Motor Company
Beverages
_________
Anheuser-Busch Companies, Inc.
The Coca-Cola Company
PepsiCo, Inc.
Entertainment
_____________
The Walt Disney Company
Food
____
Campbell Soup Company
H.J. Heinz Company
Hershey Foods Corporation
Sara Lee Corporation
Household Products
__________________
The Clorox Company
Colgate-Palmolive Company
The Procter & Gamble Company
Pharmaceuticals
_______________
Bristol-Myers Squibb Company
Johnson & Johnson
Schering-Plough Corporation
Recreation
__________
Carnival Corporation
Harley-Davidson, Inc.
Restaurants
___________
McDonald's Corporation
Starbucks Corporation
Retail
______
The Gap, Inc.
Technology
__________
Intel Corporation
Tobacco
_______
Philip Morris Companies, Inc.
Toiletries/Cosmetics
____________________
The Gillette Company
Communications Growth Portfolio, Series 4
Cable TV
________
Comcast Corporation (Class A Special)
MediaOne Group, Inc.
Communications Services
_______________________
ALLTEL Corporation
AT&T Corp.
Bell Atlantic Corporation
BellSouth Corporation
Cable & Wireless Plc (ADR)
Deutsche Telekom AG (ADR)
MCI WorldCom, Inc.
Qwest Communications International Inc.
SBC Communications Inc.
Telefonica S.A. (ADR)
Data Networking/Communications Equipment
________________________________________
ADC Telecommunications, Inc.
Cisco Systems, Inc.
Comverse Technology, Inc.
ECI Telecom Limited
Lucent Technologies Inc.
Northern Telecom Limited (Nortel)
Tellabs, Inc.
Page 18
Wireless Communications
_______________________
LM Ericsson AB (ADR)
Motorola, Inc.
Nokia Oy (Class A) (ADR)
QUALCOMM Incorporated
SkyTel Communications Inc.
Vodafone Group Plc (ADR)
Healthcare Growth Portfolio, Series 3
Healthcare Products
___________________
Becton, Dickinson and Company
Johnson & Johnson
Medtronic, Inc.
Patterson Dental Company
STERIS Corporation
Stryker Corporation
Sybron International Corporation
Healthcare Services
___________________
AmeriSource Health Corporation (Class A)
Cardinal Health, Inc.
HCR Manor Care, Inc.
Health Management Associates, Inc. (Class A)
HEALTHSOUTH Corporation
Lincare Holdings Inc.
McKesson HBOC, Inc.
UnitedHealth Group
Universal Health Services, Inc. (Class B)
Pharmaceuticals/Biotech
_______________________
Abbott Laboratories
Amgen Inc.
Bristol-Myers Squibb Company
Elan Corporation Plc (ADR)
Merck & Co., Inc.
Pfizer Inc.
Schering-Plough Corporation
Warner-Lambert Company
Watson Pharmaceuticals, Inc.
Retail Growth Portfolio, Series 3
Abercrombie & Fitch Co. (Class A)
Albertson's, Inc.
Bed Bath & Beyond Inc.
Best Buy Co., Inc.
CDW Computer Centers, Inc.
Costco Companies, Inc.
Dayton Hudson Corporation
Dollar General Corporation
Dollar Tree Stores, Inc.
The Gap, Inc.
Tommy Hilfiger Corporation
Home Depot, Inc.
Intimate Brands, Inc.
Kohl's Corporation
The Kroger Co.
Lowe's Companies, Inc.
The May Department Stores Company
Office Depot, Inc.
Ross Stores, Inc.
Safeway Inc.
Staples, Inc.
The TJX Companies, Inc.
Tiffany & Co.
Wal-Mart Stores, Inc.
Walgreen Co.
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 Public Offering
Price per Unit is comprised of the following:
- - the aggregate underlying value of the Securities;
- - the amount of any cash in the Income and Capital Accounts;
- - dividends receivable on Securities; and
- - the total sales charge (which combines an initial upfront sales
Page 19
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
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, to an extent
which will maintain the same proportionate relationship among the
Securities contained in a Trust as existed prior to such sale.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units on the date of settlement if
payment has been received. If you pay for your Units before the date of
settlement, we may use your payment during this time and it may be
considered a benefit to us, subject to the limitations of the Securities
Exchange Act of 1934.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units
($500 if you are purchasing Units for your Individual Retirement Account
or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and a deferred
component. The initial sales charge, which you will pay at the time of
purchase, is initially equal to approximately 1% of the Public Offering
Price of a Unit. This initial sales charge is actually equal to the
difference between the maximum sales charge of 4.5% of the Public
Offering Price and the maximum remaining deferred sales charge
(initially $.35 per Unit). The initial sales charge will vary from 1%
with changes in the aggregate underlying value of the Securities,
changes in the Income and Capital Accounts and as deferred sales charge
payments are made. In addition, five monthly deferred sales charge
payments of $.07 per Unit will be deducted from each Trust's assets on
approximately the twentieth day of each month from ____________, 1999
through ____________, 2000. The maximum sales charge assessed during the
initial offering period will be 4.5% of the Public Offering Price per
Unit (equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge).
After the initial offering period, if you purchase Units after the last
deferred sales charge payment has been assessed, your sales charge will
consist of a one-time initial sales charge of 4.5% of the Public
Offering Price (equivalent to 4.712% of the net amount invested), which
will be reduced by 1/2 of 1% on each subsequent April 30, commencing
April 30, 2000, to a minimum sales charge of 3.0%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Page 20
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$ 50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer.
You may combine same day purchases of the Trusts' Units and units of
other similarly structured equity unit trusts for which we act as
Principal Underwriter and which are currently in the initial offering
period to meet the above volume purchase levels. We will consider Units
you purchase in the name of your spouse or your child under 21 years of
age to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the broker/dealer or other selling agent making
the sale.
If you own units of any other unit investment trusts sponsored by us you
may use your redemption or termination proceeds from these trusts to
purchase Units of the Trusts subject only to any remaining deferred
sales charge to be collected on Units of the Trusts. Please note that
you will be charged the amount of any remaining deferred sales charge on
units you redeem when you redeem them.
The following persons may purchase Units at the Public Offering Price
less the applicable dealer concession:
- - Employees, officers and directors of the Sponsor, our related
companies, dealers and their affiliates, and vendors providing services
to us.
- - Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons).
If you purchase Units through registered broker/dealers who charge
periodic fees for financial planning, investment advisory or asset
management services or provide these services as part of an investment
account where a comprehensive "wrap fee" charge is imposed, you may
purchase Units in the primary or secondary market at the Public Offering
Price, less the concession we would typically allow such broker/dealer.
See "Distribution of Units-Dealer Concessions."
Every investor will be charged the deferred sales charge per Unit
regardless of any discounts. However, if you are eligible to receive a
discount such that the maximum sales charge you must pay is less than
the applicable maximum deferred sales charge, you will be credited the
difference between your maximum sales charge and the maximum deferred
sales charge at the time you buy your Units.
The Value of the Securities.
The aggregate underlying 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
Page 21
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 applicable sales
charge. 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 Trusts for sale in a number of states.
During the initial offering period, Units will be sold at the current
Public Offering Price. When the initial offering period ends, Units we
have reacquired may be offered by this prospectus at the secondary
market Public Offering Price (see "The Secondary Market").
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 3.2% of the Public
Offering Price per Unit (or 65% of the maximum sales charge after April
30, 2000). However, dealers and other selling agents will receive a
concession on the sale of Units subject only to any remaining deferred
sales charge equal to $.22 per Unit on Units sold subject to the maximum
deferred sales charge or 63% of the then current maximum remaining
deferred sales charge on Units sold subject to less than the maximum
deferred sales charge. Dealers and other selling agents will receive an
additional volume concession or agency commission of .30% of the Public
Offering Price if they purchase at least $100,000 worth of Units on the
Initial Date of Deposit or $250,000 on any day thereafter or if they
were eligible to receive a similar concession in connection with sales
of similarly structured trusts sponsored by us which are currently in
the initial offering period.
Dealers and other selling agents who sell Units of the Trusts during the
initial offering period in the dollar amounts shown below will be
entitled to the following additional sales concessions as a percentage
of the Public Offering Price:
Total Sales
per Trust Additional
(in millions): Concession:
_________________ ___________
$ 1 but less than $2 .10%
$ 2 but less than $3 .15%
$ 3 but less than $10 .20%
$10 or more .30%
We reserve the right to change the amount of concessions or agency
commissions from time to time. Certain commercial banks may be making
Units of the Trusts available to their customers on an agency basis. A
portion of the sales charge paid by these customers is kept by or given
to the banks in the amounts shown above. Under the Glass-Steagall Act,
banks are prohibited from underwriting Trust Units. However, the Glass-
Steagall Act does allow certain agency transactions. In Texas and in
certain other states, any banks making Units available must be
registered as broker/dealers under state law.
Award Programs.
From time to time we may sponsor programs which provide awards to our
dealers' registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charges 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.
Page 22
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 a gross sales commission equal to the maximum sales
charge per Unit of a Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price we sell them to a Trust is considered a profit
or loss (see Note 2 of "Notes to 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 a maximum sales charge for the Trusts) 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. If you sell Units
or tender them for redemption before you have paid the total deferred
sales charge on your Units, you will have to pay the remainder at that
time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid 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
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
Page 23
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.
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/or
- - all taxes and other government charges imposed upon the Securities or
any part of a Trust. (No such taxes or charges are now in place or
planned as far as we know.)
The above expenses and the Trustee's annual fee (when paid or owing to
the Trustee) are secured by a lien on 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."
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 a deferred sales charge.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total proceeds received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units
Page 24
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 when you redeem your Units or at a Trust's termination. If
you request an In-Kind Distribution you will be responsible for any
expenses related to this distribution. By electing to receive an In-Kind
Distribution, you will receive an undivided interest in whole shares of
stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trusts as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Distributions by a Trust that are treated as U.S. source income (e.g.,
dividends received on Securities of domestic corporations) will
generally be subject to U.S. income taxation and withholding in the case
of Units held by non-resident alien individuals, foreign corporations or
other non-U.S. persons, subject to any applicable treaty. However,
distributions by a Trust that are derived from dividends of Securities
of a foreign corporation and that are not effectively connected to your
conduct of a trade or business within the United States will generally
not be subject to U.S. income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other U.S. persons, provided that less than 25 percent of the gross
income of the foreign corporation over the three-year period ending with
the close of the taxable year preceding payment was effectively
connected to the conduct of a trade or business within the United
States. Some distributions by a Trust may be subject to foreign
withholding taxes. Any dividends withheld will nevertheless be treated
as income to you. However, because you are deemed to have paid directly
your share of foreign taxes that have been paid or accrued by a Trust,
you may be entitled to a foreign tax credit or deduction for U.S. tax
purposes with respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
Retirement Plans
You may purchase Units of the Trusts for:
- - Individual Retirement Accounts,
- - Keogh Plans,
- - pension funds, and
- - other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
Page 25
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as record owner of Units persons registered as
such on its books. If you request certificates representing the Units
you ordered 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
will credit your account with the number of Units you purchase. Within
two business days of the issuance or transfer of Units held in
uncertificated form, the Trustee will send to you, as the 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
Page 26
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 deferred
sales charge 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 deferred sales charge will be collected from the
Capital Account of a Trust and that there will be enough money in the
Capital Account to cover these costs. If there is not enough money in
the Capital Account to pay the deferred sales charge, the Trustee may
sell Securities to meet the shortfall. We will designate an account
where distributions will be made to pay the deferred sales charge.
The Trustee is required by the Internal Revenue Service to withhold a
certain percentage of any distribution a Trust makes and deliver such
amount to the Internal Revenue Service if the Trustee does not have your
TIN. You may recover this amount by giving your TIN to the Trustee, or
when you file a tax return. Normally, the selling broker gives your TIN
to the Trustee. However, you should check your statements from the
Trustee to make sure they have the number to avoid this "back-up
withholding." If not, you should provide it to the Trustee as soon as
possible.
Within a reasonable time after a Trust is terminated 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 deferred sales charge 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. 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.
Page 27
If you are tendering 1,000 Units or more of a Trust for redemption,
rather than receiving cash, you may elect to receive a distribution of
shares of Securities (an "In-Kind Distribution") in an amount and value
equal to the Redemption Price per Unit by making this request in writing
to the Trustee at the time of tender. However, no In-Kind Distribution
requests submitted during the nine business days prior to a Trust's
Mandatory Termination Date will be honored. Where possible, the Trustee
will make an In-Kind Distribution by distributing each of the Securities
in book-entry form to your bank or broker/dealer account at the
Depository Trust Company. The Trustee will subtract any customary
transfer and registration charges from your In-Kind Distribution. As a
tendering Unit holder, you will receive your pro rata number of whole
shares of the Securities that make up the portfolio, and cash from the
Capital Account equal to the fractional shares to which you are
entitled. If there is not enough money in the Capital Account to pay the
required cash distribution, the Trustee may have to sell Securities.
The Internal Revenue Service will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee has not previously
been provided your TIN. For more information about this withholding, see
"Income and Capital Distributions." If the Trustee does not have your
TIN, you must provide it at the time of the redemption request.
The Trustee may sell Securities 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.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
if the NYSE is closed (other than customary weekend and holiday closings);
if the SEC determines that trading on the NYSE is restricted or that an
emergency exists making sale or evaluation of the Securities not
reasonably practical; or
for any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation.
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
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
Page 28
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.
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 sales charge paid by such purchaser; however,
termination of a Trust prior to the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, 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
Page 29
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 an In-Kind Distribution of Securities (reduced by
customary transfer and registration charges) rather than the typical
cash distribution. You must notify the Trustee at least ten business
days prior to the Mandatory Termination Date if you elect this In-Kind
Distribution option. If you do not elect to participate in 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
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
Page 30
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,
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.
Page 31
FIRST TRUST (registered trademark)
America's Leading Brands Growth Portfolio, Series 5
Communications Growth Portfolio, Series 4
Healthcare Growth Portfolio, Series 3
Retail Growth Portfolio, Series 3
FT 338
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-_____) 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 __, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 32
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 338 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 __, 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
Communications 2
Healthcare 3
Retail 3
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
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
Page 1
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 Growth
Portfolio 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.
Communications. An investment in Units of the Communications Growth
Portfolio should be made with an understanding of the problems and risks
such an investment may entail. The market for high-technology
communications products and services is characterized by rapidly
changing technology, rapid product obsolescence, cyclical market
patterns, evolving industry standards and frequent new product
introductions. The success of the issuers of the Equity Securities
depends in substantial part on the timely and successful introduction of
new products and services. An unexpected change in one or more of the
technologies affecting an issuer's products or in the market for
products based on a particular technology could have a material adverse
affect on an issuer's operating results. Furthermore, there can be no
assurance that the issuers of the Equity Securities will be able to
respond in a timely manner to compete in the rapidly developing
marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of the Trust's Units. For example, while telephone companies in the
United States are subject to both state and federal regulations
affecting permitted rates of returns and the kinds of services that may
be offered, the prohibition against phone companies delivering video
Page 2
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in the Trust's portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the 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.
Healthcare. An investment in Units of the Healthcare Growth Portfolio
should be made with an understanding of the problems and risks such an
investment may entail. Healthcare companies involved in Advanced Medical
Devices and Instruments, Drugs and Biotech, Healthcare/Managed Care,
Hospital Management/Health Services and Medical Supplies have potential
risks unique to their sector of the healthcare field. These companies
are subject to governmental regulation of their products and services, a
factor which could have a significant and possibly unfavorable effect on
the price and availability of such products or services. Furthermore,
such companies face the risk of increasing competition from new products
or services, generic drug sales, the termination of patent protection
for drug or medical supply products and the risk that technological
advances will render their products obsolete. The research and
development costs of bringing a drug to market are substantial, and
include lengthy governmental review processes with no guarantee that the
product will ever come to market. Many of these companies may have
losses and not offer certain products until the late 1990s or later.
Such companies may also have persistent losses during a new product's
transition from development to production, and revenue patterns may be
erratic. In addition, healthcare facility operators may be affected by
events and conditions including among other things, demand for services,
the ability of the facility to provide the services required,
physicians' confidence in the facility, management capabilities,
competition with other hospitals, efforts by insurers and governmental
agencies to limit rates, legislation establishing state rate-setting
agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that
associated with Medicare, Medicaid and other similar third party payor
programs.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the healthcare and medical
services sector very attractive for investors seeking the potential for
growth in their investment portfolio. However, there are no assurances
that the Trust's objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs), national health insurance, incentives for
competition in the provision of healthcare services, tax incentives and
penalties related to healthcare insurance premiums and promotion of pre-
paid healthcare plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Equity Securities
in the Trust.
Retail. An investment in Units of the Retail Growth Portfolio should be
made with an understanding of the characteristics of the problems and
risks such an investment may entail. The profitability of companies
engaged in the retail industry will be affected by various factors
including the general state of the economy and consumer spending trends.
Recently, there have been major changes in the retail environment due to
the declaration of bankruptcy by some of the major corporations involved
in the retail industry, particularly the department store segment. The
continued viability of the retail industry will depend on the industry's
ability to adapt and to compete in changing economic and social
conditions, to attract and retain capable management, and to finance
expansion. Weakness in the banking or real estate industry, a
recessionary economic climate with the consequent slowdown in employment
growth, less favorable trends in unemployment or a marked deceleration
in real disposable personal income growth could result in significant
pressure on both consumer wealth and consumer confidence, adversely
affecting consumer spending habits. In addition, competitiveness of the
retail industry will require large capital outlays for investment in the
installation of automated checkout equipment to control inventory, to
track the sale of individual items and to gauge the success of sales
campaigns. Increasing employee and retiree benefit costs may also have
an adverse effect on the industry. In many sectors of the retail
industry, competition may be fierce due to market saturation, converging
consumer tastes and other factors. Because of these factors and the
recent increase in trade opportunities with other countries, American
retailers are now entering global markets which entail added risks such
as sudden weakening of foreign economies, difficulty in adapting to
local conditions and constraints and added research costs.
Page 3
MEMORANDUM
Re: FT 338
The only difference of consequence (except as described
below) between FT 328, which is the current fund, and FT 338, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 328 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM 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
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 338 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on March 17, 1999.
FT 338
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this 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 March 17, 1999
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of
Nike Securities
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., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
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 ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
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 is
filed as Exhibit 4.1 to the Registration Statement.
S-3
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 Nike
Financial Advisory Services 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 338 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee and First Trust Advisors L.P., as Evaluator
and 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).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
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.
S-4
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).
___________________________________
* To be filed by amendment.
S-5
