Registration No. 333-77767
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 349
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on June 24, 1999 at 2:00 p.m. pursuant to Rule
487.
________________________________
Strategic Financial Institutions Trust, Year 2004 Series
FT 349
FT 349 consists of a unit investment trust known as Strategic Financial
Institutions Trust, Year 2004 Series (the "Trust"). The Trust consists
of a diversified portfolio of common stocks ("Securities") issued by
regional banks and thrifts. The Trust seeks to provide above-average
total return through capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Advest, Inc.
The date of this prospectus is June 24, 1999
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 8
Portfolio 9
Risk Factors 9
Portfolio Securities Descriptions 10
Public Offering 12
Distribution of Units 14
The Sponsor's and Underwriter's Profits 15
The Secondary Market 15
How We Purchase Units 16
Expenses and Charges 16
Tax Status 17
Retirement Plans 18
Rights of Unit Holders 18
Income and Capital Distributions 19
Redeeming Your Units 19
Removing Securities from the Trust 21
Amending or Terminating the Indenture 21
Information on the Underwriter, Sponsor, Trustee and Evaluator 22
Other Information 23
Page 2
Summary of Essential Information
Strategic Financial Institutions Trust, Year 2004 Series
FT 349
At the Opening of Business on the Initial Date of Deposit-June 24, 1999
Underwriter: Advest, Inc.
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
<S> <C>
Initial Number of Units (1) 15,003
Fractional Undivided Interest in the Trust per Unit (1) 1/15,003
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900
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) $ .450
Less Deferred Sales Charge per Unit $ (.350)
Public Offering Price per Unit (4) $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.550
Redemption Price per Unit (based on aggregate underlying
value of Securities less the deferred sales charge) (5) $ 9.550
Cash CUSIP Number 30264W 354
Reinvestment CUSIP Number 30264W 362
Security Code 57001
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date June 29, 1999
Mandatory Termination Date (6) June 30, 2004
Income Distribution Record Date Fifteenth day of each March, June, September and December,
commencing September 15, 1999.
Income Distribution Date (7) Last day of each March, June, September and December,
commencing September 30, 1999.
______________
<FN>
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the 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 amount 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 consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. 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 3
Fee Table
This Fee Table describes the fees and expenses that you may pay if you
buy and hold Units of the Trust. See "Public Offering" and "Expenses and
Charges." Although the Trust has a term of approximately five years and
is a unit investment trust rather than a mutual fund, this information
allows you to compare fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase 1.0%(a) $ .100
Deferred sales charge 3.5%(b) .350
________ ______
Maximum sales charge 4.5% $ .450
======== ======
Maximum sales charge imposed on reinvested dividends 3.5%(c) $ .350
======== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .150%(d) $.0150
======== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .100% $.0098
Trustee's fee and other operating expenses .154% .0151
________ ______
Total .254% $.0249
======== ======
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the 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 the
Trust's operating expenses stay the same. Although your actual costs may
vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years
__________ ___________ ___________
$ 490 $ 542 $ 600
This 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 January 20, 2000 and on the 20th day of each month
thereafter (or the preceding business day if the 20th day is not a
business day) through May 19, 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 deferred sales
charge remaining at the time of reinvestment. See "Income and Capital
Distributions."
(d) You will bear all or a portion of the costs incurred in organizing
the Trust. These estimated organization costs are included in the price
you pay for your Units and will be deducted from the assets of the Trust
at the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period.
</FN>
</TABLE>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 349
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 349, comprised of the Strategic Financial
Institutions Trust, Year 2004 Series, as of the opening of business on
June 24, 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 June 24, 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 349,
comprised of the Strategic Financial Institutions Trust, Year 2004
Series, at the opening of business on June 24, 1999 in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 24, 1999
Page 5
Statement of Net Assets
Strategic Financial Institutions Trust, Year 2004 Series
FT 349
At the Opening of Business on the Initial Date of Deposit-June 24, 1999
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $148,529
Less liability for reimbursement to Sponsor for organization costs (3) (225)
Less liability for deferred sales charge (4) (5,251)
________
Net assets $143,053
========
Units outstanding 15,003
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,029
Less maximum sales charge (5) (6,751)
Less estimated reimbursement to Sponsor for organization costs (3) (225)
________
Net assets $143,053
========
____________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $200,000 will be allocated to the Trust, 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 Trust. These costs have been estimated at $.0150 per
Unit for the Trust. A payment will be made as of the earlier of six
months after the Initial Date of Deposit or the end of the initial
offering period to an account maintained by the Trustee from which the
obligation of the investors to the Sponsor will be satisfied. To the
extent that actual organization costs are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of the Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions from the Trust ($.35 per Unit), payable to us in five
equal monthly installments beginning on January 20, 2000 and on the
twentieth day of each month thereafter (or if such date is not a
business day, on the preceding business day) through May 19, 2000. If
you redeem Units before May 19, 2000 you will have to pay the remaining
amount of the deferred sales charge applicable to such Units when you
redeem them.
(5) The aggregate cost to investors in the Trust includes a maximum
sales charge (comprised of an initial 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 6
Schedule of Investments
Strategic Financial Institutions Trust, Year 2004 Series
FT 349
At the Opening of Business on the Initial Date of Deposit-June 24, 1999
<TABLE>
<CAPTION>
Percentage
of Aggregate Market Cost of
Number Ticker Symbol and Offering Value Securities to
of Shares Name of Issuer of Securities (1) Price per Share the Trust (2)
_________ ________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
90 ABAN American Bancshares, Inc. 0.50% $ 8.250 $ 743
48 ANDB Andover Bancorp, Inc. 1.00% 31.000 1,488
171 ASFC Astoria Financial Corporation 4.99% 43.375 7,417
91 BKB BankBoston Corporation (3) 3.01% 49.188 4,476
211 BK Bank of New York Company, Inc. 5.01% 35.250 7,438
103 ONE Bank One Corporation 4.00% 57.688 5,942
71 BYS Bay State Bancorp, Inc. 1.00% 21.000 1,491
519 BRKL Brookline Bancorp, Inc. 4.00% 11.438 5,936
270 COFI Charter One Financial, Inc. 5.01% 27.531 7,433
289 DME Dime Bancorp, Inc. 4.00% 20.563 5,943
263 DCOM Dime Community Bancshares 4.01% 22.625 5,950
139 FLT Fleet Financial Group, Inc. (3) 4.00% 42.688 5,934
128 GSBI Granite State Bankshares, Inc. 2.00% 23.250 2,976
534 HRBT Hudson River Bancorp, Inc. 4.00% 11.125 5,941
213 HU Hudson United Bancorp 5.00% 34.875 7,428
173 JEFF JeffBanks, Inc. 3.01% 25.813 4,466
180 KEY KeyCorp 4.00% 33.000 5,940
78 LSBX Lawrence Savings Bank 0.50% 9.500 741
100 MECH MECH Financial, Inc. 2.50% 37.188 3,719
53 MBNK Main Street Bancorp, Inc. 0.50% 14.063 745
339 MDBK Medford Bancorp, Inc. 3.99% 17.500 5,933
357 NFB North Fork Bancorporation, Inc. 5.00% 20.813 7,430
138 QCSB Queens County Bancorp Inc. 3.00% 32.250 4,451
725 RSFC Republic Security Financial Corporation 4.00% 8.188 5,936
432 RSLN Roslyn Bancorp, Inc. 5.00% 17.188 7,425
537 SCFS Seacoast Financial Services Corporation 4.00% 11.063 5,941
226 SKYF Sky Financial Group, Inc. 3.99% 26.250 5,932
179 SUB Summit Bancorp 4.99% 41.375 7,406
181 WRNB Warren Bancorp, Inc. 1.00% 8.188 1,482
116 WSBI Warwick Community Bancorp, Inc. 1.00% 12.813 1,486
105 WBST Webster Financial Corporation 1.99% 28.188 2,960
______ ________
Total Investments 100% $148,529
====== ========
__________
<FN>
(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 June 24, 1999.
(2) The cost of the Securities to the 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 on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
cost of the Securities to us and our profit (which is the
difference between the cost of the Securities to us and the cost of the
Securities to the Trust) was $148,504 and $25, respectively.
(3) Fleet Financial Group, Inc. ("Fleet") has recently announced plans to
acquire BankBoston Corporation ("BankBoston"). As per the terms of the merger
agreement, each shareholder of BankBoston will receive 1.1844 shares of Fleet
for each share of BankBoston held. As a result of this expected transaction,
it is anticipated that the Trust will receive additional shares of common
stock of Fleet in exchange for the shares of BankBoston which it holds. The
transaction is subject to the approval of the shareholders of both companies
and various regulatory authorities.
</FN>
</TABLE>
Page 7
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, the FT
Series, with a different series number.
YOU MAY GET MORE SPECIFIC DETAILS ON SOME OF THE INFORMATION IN THIS
PROSPECTUS IN AN "INFORMATION SUPPLEMENT" BY CALLING THE TRUSTEE AT 1-
800-682-7520.
What We Call the Trust.
This FT Series consists of a unit investment trust known as Strategic
Financial Institutions Trust, Year 2004 Series.
Mandatory Termination Date.
The 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." The 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 Trust.
How We Created the Trust.
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 Trust, in
the form of units ("Units").
With the deposit of the contracts to buy the Securities on the Initial
Date of Deposit we established a percentage relationship among the
Securities in the Trust's portfolio, as stated under "Schedule of
Investments." After the Initial Date of Deposit, we may deposit
additional Securities in the Trust, or cash (including a letter of
credit) with instructions to buy more Securities, in order to create new
Units for sale. If we create additional Units, we will attempt, to the
extent practicable, to maintain the original percentage relationship
established among the Securities on the Initial Date of Deposit, and not
the actual percentage relationship existing on the day we are creating
Units, since the two may differ. This difference may be due to the sale,
redemption or liquidation of any of the Securities.
Since the prices of the underlying Securities will fluctuate daily, the
ratio of Securities in the Trust, on a market value basis, will also
change daily. The portion of Securities represented by each Unit will
not change as a result of the deposit of additional Securities or cash
in the Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trust will pay brokerage fees to buy
Securities. To reduce this dilution, the Trust 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 an affiliate) to
act as agent for the Trust to buy Securities. If we or an affiliate of
ours act as agent to the Trust, we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that the 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 Trust 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
Trust. As the holder of the Securities, the Trustee will vote all of the
Securities and will do so based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities") we will refund
to you that portion of the purchase price and sales charge resulting
from the failed contract on the next Income Distribution Date. Any
Replacement Security the 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,
Page 8
and the purchase price may not be more than the amount of funds reserved
for the purchase of the failed contract.
Portfolio
Objectives.
The Trust's objective is to provide investors with the potential for
above-average capital appreciation through an investment in a
diversified portfolio of common stocks issued primarily by financial
institutions having operations located principally in the Northeast and
Mid-Atlantic regions of the United States.
In the opinion of Advest, Inc. (the "Underwriter") the issuers of the
Securities in the Trust are attractively valued institutions with
excellent market shares and diversified product lines which also have
the potential to benefit from the ongoing consolidation activity
characterizing the bank and thrift industry. The Underwriter believes
the Trust may provide you with an opportunity for above-average capital
appreciation due to the following factors.
Positive Industry Earnings Outlook. With the overall strength of the
U.S. economy, the Underwriter feels that financial institutions will be
able to enhance their profitability as they expand their businesses.
Further, the Underwriter believes companies in this sector are poised to
benefit from strong and improving fundamentals as both businesses and
consumers increase their levels of borrowing as a result of the current
low level of interest rates.
Mergers & Acquisitions. Since new banking regulations were enacted,
banks are able to increase their asset size, geographic reach and
product array through mergers and acquisitions. In fact, during the
period from 1987 through 1997, the number of U.S. banks and thrifts
declined from 17,344 to 10,922. These consolidations typically result in
increased operating efficiencies, economies of scale and cost cutting at
institutions, along with expanded delivery networks and fewer
competitors in a given market. In the Underwriter's opinion this can
lead to strong earnings growth rates and higher share prices.
Attractive Stock Valuations. Despite generally consistent earnings
growth, on average, the companies included in the Trust trade at below
market price-to-earnings ratios. It is the Underwriter's opinion that
given their recent levels of profitability and earnings growth, the
Securities generally trade at attractive valuation levels relative to
the Standard & Poor's 500 Composite Stock Price Index. Because of their
attractive valuations, the Underwriter believes the Securities have the
potential to provide above-average capital appreciation over the life of
the Trust.
The Securities were selected by James E. Moynihan, Jr., Anthony J.
Polini and Salvatore J. DiMartino, each a member of the Underwriter's
Financial Institutions Group. Messrs. Moynihan, Polini and DiMartino
each have substantial experience covering financial institutions with
particular emphasis on the Northeast and Mid-Atlantic regions of the
country.
There is, of course, no guarantee that the objective of the Trust will
be achieved. See "Risk Factors" for a discussion of the risks of
investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of banks and
thrifts. The value of the 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 Trust is 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 the Trust will be positive over any period of time or
that you won't lose money. Units of the Trust 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 the Trust may be issued by companies with
market capitalizations of less than $1 billion. The share prices of
these small-cap companies are often more volatile than those of larger
companies. This is a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Page 9
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Financial Institutions Industry. Banks, thrifts and their holding
companies are especially subject to the adverse effects of economic
recession, volatile interest rates, portfolio concentrations in
geographic markets and in commercial and residential real estate loans,
and competition from new entrants in their fields of business. Banks and
thrifts face shrinking profit margins due to new competitors and the
cost of new technology. In addition, banks, thrifts and their holding
companies are extensively regulated at both the federal and state level
and may be adversely affected by increased regulations.
Banks and thrifts will face increased competition from nontraditional
lending sources as regulatory changes permit new entrants to offer
various financial products. Technological advances such as the Internet
allow these nontraditional lending sources to cut overhead and permit
the more efficient use of customer data.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States which may have a negative
impact on companies represented in the Trust. In addition, litigation
regarding any of the issuers of the Securities or the financial
institutions industry 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
January 1, 2000 will cause any major operational difficulties for the
Trust. However, we are unable to predict what impact the Year 2000
Problem will have on any of the issuers of the Securities.
Underwriter's Recommendations. While the Underwriter has carefully
evaluated and approved the Securities in the Trust for this purpose,
they may choose for any reason not to recommend any or all of the
Securities for another purpose or at a later date. This may affect the
value of your Units. In addition, the Underwriter in its general
securities business acts as agent or principal in connection with buying
and selling stocks, including the Securities, and may have bought the
Securities for the Trust, thereby benefiting. The Underwriter also acts
as a market maker, underwrites certain issues, and provides investment
banking services to companies, which has included the issuers of certain
of the Securities.
Portfolio Securities Descriptions
American Bancshares, Inc., headquartered in Bradenton, Florida, through
wholly-owned American Bank of Bradenton, conducts a general commercial
banking business at various locations in Florida.
Andover Bancorp, Inc., headquartered in Andover, Massachusetts, through
wholly-owned Andover Bank and Andover Bank N.H., conducts a banking
business through several branches in Massachusetts and New Hampshire.
Astoria Financial Corporation, headquartered in Lake Success, New York,
through wholly-owned Astoria Federal Savings and Loan Association,
conducts a savings and loan business through numerous offices in
Brooklyn, Chenango, Nassau, Otsego, Queens, Suffolk and Westchester
counties in New York.
BankBoston Corporation, headquartered in Boston, Massachusetts, conducts
a general banking business and offers a broad range of individual,
corporate and global banking services through a network of offices
nationally and internationally.
Bank of New York Company, Inc., headquartered in New York, New York,
through subsidiaries, conducts a general banking business through
numerous offices in New York, Connecticut and New Jersey as well as
various international offices. The company provides cash management
services, investment management, securities servicing and equipment
leasing.
Bank One Corporation, headquartered in Chicago, Illinois, is a large
bank holding company which operates in the United States and selected
international markets. The company is one of the nation's largest
credit card companies, the leading retail bank in several states and a
major bank mutual fund company.
Bay State Bancorp, Inc., headquartered in Brookline, Massachusetts, is
the holding company for Bay State Federal Savings Bank, which conducts a
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savings and loan business at offices in Norfolk and Suffolk counties in
Massachusetts.
Brookline Bancorp, Inc., headquartered in Brookline, Massachusetts, is
the holding company for Brookline Savings Bank, which originates,
purchases and sells non-conforming residential mortgage loans secured by
one- to four-family residences.
Charter One Financial, Inc., headquartered in Cleveland, Ohio, through
wholly-owned Charter One Bank, F.S.B., operates a banking business
through numerous full-service banking offices in Ohio, Massachusetts,
Michigan, New York and Vermont. The company also operates loan
production offices in several states.
Dime Bancorp, Inc., headquartered in New York, New York, through
subsidiaries, conducts a banking business at a number of full-service
branches located mainly in the New York City metropolitan area. The
company also provides insurance and securities brokerage services.
Dime Community Bancshares, headquartered in Brooklyn, New York, through
wholly-owned Dime Savings Bank of Williamsburgh, conducts a savings bank
business through several offices in Brooklyn, the Bronx and Queens in
New York City and Nassau County, New York.
Fleet Financial Group, Inc., headquartered in Boston, Massachusetts,
conducts a general commercial banking and trust business through a large
network of branches, automatic teller machines and telephone banking
centers. The company also provides other activities related to banking
and finance.
Granite State Bankshares, Inc., headquartered in Keene, New Hampshire,
is a bank holding company for Granite Bank, which operates a savings
bank business through several offices and automatic teller machines in
New Hampshire.
Hudson River Bancorp, Inc., headquartered in Hudson, New York, is the
holding company for The Hudson City Savings Institution. The company
invests in one- to four-family residential loans and investment-grade
securities and operates through offices located in the Hudson, New York,
area.
Hudson United Bancorp, headquartered in Mahwah, New Jersey, is a multi-
state bank holding company which conducts a general banking business
through branches in New Jersey, Connecticut and New York.
JeffBanks, Inc., headquartered in Philadelphia, Pennsylvania, through
subsidiaries, conducts a general commercial banking business through
offices in Pennsylvania and New Jersey.
KeyCorp, headquartered in Cleveland, Ohio, through subsidiaries,
conducts a commercial and retail banking business through numerous full-
service banking offices in various states. The company also provides
trust, personal financial cash management, investment banking,
securities brokerage and international banking services.
Lawrence Savings Bank, headquartered in North Andover, Massachusetts,
conducts a general banking business through offices in North Andover and
nearby communities.
MECH Financial, Inc., headquartered in Hartford, Connecticut, is the
holding company for Mechanics Savings Bank, which offers various
products and services, including deposit products, non-deposit
investment products and loans.
Main Street Bancorp, Inc., headquartered in Reading, Pennsylvania,
through subsidiaries, conducts a banking business in several counties in
Pennsylvania.
Medford Bancorp, Inc., headquartered in Medford, Massachusetts, is a
holding company for Medford Bank, which conducts a general savings
business through offices located in Medford and several nearby cities.
The company also buys and sells securities.
North Fork Bancorporation, Inc., headquartered in Melville, New York, is
the holding company of North Fork Bank and Superior Savings of New
England. The company operates a full-service retail and commercial
banking business through numerous branch locations in New York and also
provides broker-dealer services to financial institutions, individual
investors and traders.
Queens County Bancorp Inc., headquartered in Flushing, New York, through
wholly-owned Queens County Savings Bank, conducts a savings bank
business through full-service banking offices, customer service centers
and a mortgage service center in Queens and Nassau counties in New York.
Republic Security Financial Corporation, headquartered in West Palm
Beach, Florida, is the holding company for Republic Security Bank. The
company conducts a general banking business through a number of full-
service branches located throughout Broward, Dade, Lee, Martin and Palm
Beach counties in Florida.
Page 11
Roslyn Bancorp, Inc., headquartered in Roslyn, New York, is the holding
company for The Roslyn Savings Bank. The company operates a general
banking business through several full-service offices in Nassau and
Suffolk counties on Long Island and various mortgage origination offices
in New York, Connecticut, Delaware, Maryland, New Jersey, Pennsylvania
and Virginia.
Seacoast Financial Services Corporation, headquartered in New Bedford,
Massachusetts, is a holding company for CompassBank, which provides
banking services in southeastern Massachusetts through a network of full-
service branch offices and automated teller machines.
Sky Financial Group, Inc., headquartered in Salineville, Ohio, (formerly
Citizens Bancshares, Inc.), through subsidiaries, conducts a commercial
and retail banking business through branch offices mainly in Ohio and
West Virginia. The company offers credit life and accident and health
insurance coverage to loan customers, and provides courier services.
Summit Bancorp, headquartered in Princeton, New Jersey, through
subsidiaries, conducts a general banking business through numerous
offices in New Jersey and Pennsylvania. The company also provides
securities and insurance brokerage, venture capital investment,
commercial lending, lease financing, asset-backed lending products and
related services.
Warren Bancorp, Inc., headquartered in Peabody, Massachusetts, is a
holding company for Warren Five Cents Savings Bank, which conducts a
general savings bank business through banking offices in Peabody and
Beverly, Massachusetts.
Warwick Community Bancorp, Inc., headquartered in Warwick, New York, is
a holding company for The Warwick Savings Bank. The company operates as
a savings institution in Orange County, New York and provides various
financial services.
Webster Financial Corporation, headquartered in Waterbury, Connecticut,
through wholly-owned Webster Bank, is one of the largest mortgage
lenders in Connecticut and provides consumer, mortgage and commercial
banking services to individuals and businesses through banking offices,
commercial banking centers and automated teller machines in Connecticut.
The company also provides insurance, trust and investment management
services.
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 up-front sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities 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 the 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 the 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 the Trust. Securities
will be sold to reimburse the Sponsor for the 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 Trust). 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 the Trust organization costs,
the Trustee will sell additional Securities to allow the Trust to fully
reimburse the Sponsor. In that event, the net asset value per Unit will
be reduced by the amount of additional Securities sold. Although the
dollar amount of the reimbursement due to the Sponsor will remain fixed
Page 12
and will never exceed the per Unit amount set forth for the 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
the Trust. When Securities are sold to reimburse the Sponsor for
organization costs, the Trustee will sell such Securities, to the extent
practicable, which will maintain the same proportionate relationship
among the Securities contained in the Trust as existed prior to such sale.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of
Units ($250 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 the Trust's assets on
approximately the twentieth day of each month from January 20, 2000
through May 19, 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 June 30, commencing June
30, 2000, to a minimum sales charge of 3.0%.
Discounts for Certain Persons.
If you invest at least $100,000 (except if you are purchasing for a
"wrap fee account" as described below), the maximum sales charge is
reduced, as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
________________ ____________
$ 100 but less than $250 4.25%
$ 250 but less than $500 4.00%
$ 500 but less than $1,000 3.75%
$1,000 or more 2.75%
* 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 the Underwriter or
any one dealer. 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 the Underwriter
or your dealer of any combined purchases before the sale in order to be
eligible for the reduced sales charge. Any reduced sales charge is the
responsibility of the Underwriter, broker/dealer or other selling agent
making the sale.
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, the Underwriter, dealers and their affiliates, and vendors
providing services to us.
Page 13
- - 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 the 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 Securities in the Trust as
of the Evaluation Time on each business day and will adjust the Public
Offering Price of the Units according to this valuation. This Public
Offering Price will be effective for all orders received before the
Evaluation Time on each such day. If we or the Trustee receive orders
for purchases, sales or redemptions after that time, or on a day which
is not a business day, they will be held until the next determination of
price. The term "business day" as used in this prospectus will exclude
Saturdays, Sundays and the following holidays as observed by the 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 the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the 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 Trust for sale in a number of states.
During the initial offering period, Units will be sold at the current
Public Offering Price. When the initial offering period ends, Units we
have reacquired may be offered by this prospectus at the secondary
market Public Offering Price (see "The Secondary Market").
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 3.5% of the Public
Offering Price per Unit (or 65% of the maximum sales charge after June
30, 2000).
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 Trust 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
Page 14
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 the
Underwriter's or a dealer's registered representatives who have sold a
minimum number of Units during a specified time period. We may also pay
fees to the Underwriter or qualifying dealers for services or activities
which are meant to result in sales of Units of the Trust. In addition,
we will pay to the Underwriter or dealers who sponsor sales contests or
recognition programs that conform to criteria we establish, or
participate in sales programs we sponsor, amounts equal to no more than
the total applicable sales charges on the unit sales generated by such
persons during such programs. We make these payments out of our own
assets, and not out of the Trust's assets. These programs will not
change the price you pay for your Units or the amount that the Trust
will receive from the Units sold.
Investment Comparisons.
From time to time we may compare the then current estimated returns of
the Trust (which may show performance net of the expenses and charges
the Trust would have incurred) and returns over specified periods of
other similar trusts we sponsor in our advertising and sales materials,
with (1) returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, the New York Times, U.S. News and World Report, Business Week,
Forbes or Fortune. The investment characteristics of the 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 the Trust's future relative
performance.
The Sponsor's and Underwriter's Profits
The Underwriter will receive a gross sales commission on each Unit they
sell equal to the maximum sales charge per Unit of the Trust less any
reduced sales charge as stated in "Public Offering." We will receive
from the Underwriter the difference between the gross sales commission
and the Underwriter concession as a percentage of the Public Offering
Price per Unit set forth in the following table based on the number of
Units sold:
Total Sales
per Underwriter Underwriter
(in millions): Concession:
________________ ___________
Less than $10 3.50%
$10 but less than $15 3.60%
$15 but less than $50 3.75%
$50 or more 3.80%
In addition, we will pay the Underwriter an additional fee of up to
$.0050 per Unit for sales up to $50,000,000 or $.0100 per Unit for sales
over $50,000,000 for providing additional research to us. Any difference
between our cost to purchase the Securities and the price at which we
sell them to the Trust is considered a profit or loss (see Note 2 of
"Schedule of Investments"). During the initial offering period, the
Underwriter may also realize profits or sustain losses as a result of
fluctuations in the Public Offering Price they receive when they sell
the Units.
In maintaining a market for Units, any difference between the price at
which Units are purchased and the price at which they are sold (which
includes a maximum sales charge for the Trust) or redeemed will be a
profit or loss to us. The secondary market Public Offering Price of
Units may be more or less than the cost of those Units to us.
The Secondary Market
Although we are not obligated to, we intend to maintain a market for the
Units after the initial offering period and continuously offer to
purchase Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell Units
or tender them for redemption before you have paid the total deferred
Page 15
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 we hold to the Trustee for redemption as
any other Units. If we elect not to purchase Units, the Trustee may sell
tendered Units in the over-the-counter market, if any. However, the
amount you will receive is the same as you would have received on
redemption of the Units.
The Public Offering Price of any Units we acquire will be consistent
with the Public Offering Price described in the then effective
prospectus. Any profit or loss from the resale or redemption of such
Units will belong to us.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will bear the excess.
The Trustee will pay operating expenses of the Trust from the Income
Account of the 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 Trust, and will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trust and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor will purchase research
services from the Underwriter's research department for a fee not to
exceed $.0025 per Unit sold.
The fees payable to the Portfolio Supervisor, Evaluator and Trustee are
based on the largest aggregate number of Units of the 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 service in such year.
In addition to the Trust's operating expenses, and the fees described
above, the 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 the 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 the Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of the 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 Trust. In addition, if there
is not enough cash in the Income or Capital Accounts of the Trust, the
Trustee has the power to sell Securities 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 Trust. These sales may
result in capital gains or losses to the Unit holders. See "Tax Status."
The Trust will be audited on an annual basis. So long as we are making a
secondary market for Units, we will bear the cost of these annual audits
to the extent the cost exceeds $0.0050 per Unit. Otherwise, the Trust
Page 16
will pay for the audit. You can receive a copy of the audited financial
statements by notifying the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. 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 Trust will not be taxed as a corporation 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 the 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 the Trust. This is true
even if you elect to have your distributions automatically reinvested
into additional Units. In addition, the income from the Trust which you
must take into account for federal income tax purposes is not reduced by
amounts used to pay the deferred sales charge.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total proceeds received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units,
generally including sales charges, among each Security or other Trust
asset ratably according to their value on the date you purchase your
Units. In certain circumstances, however, you may have to adjust your
tax basis after you purchase your Units (for example, in the case of
certain dividends that exceed a corporation's accumulated earnings and
profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Securities when you redeem your Units or at the Trust's termination. If
you request an In-Kind Distribution you will be responsible for any
expenses related to this distribution. 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 the Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by the 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 the 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 the Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Page 17
Foreign, State and Local Taxes.
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as a corporation, and the income of the
Trust 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 Trust for:
- - Individual Retirement Accounts,
- - Keogh Plans,
- - Pension funds, and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. If you request certificates representing the Units
you ordered they will be delivered three business days after your order
or shortly thereafter. You may transfer or redeem Units represented by a
certificate by endorsing and surrendering it to the Trustee, along with
a written instrument(s) of transfer. You must sign your name exactly as
it appears on the face of the certificate with your signature guaranteed
by an eligible institution. In certain cases the Trustee may require
additional documentation before they will transfer or redeem your Units.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for identification purposes.
You may also choose to hold your Units in uncertificated form. If you
choose this option, the Trustee will establish an account for you and
credit your account with the number of Units you purchase. Within two
business days of the issuance or transfer of Units held in
uncertificated form, the Trustee will send to you, as the Record Owner:
- - A written initial transaction statement containing a description of
your Trust;
- - The number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. The Trustee does not
require such charge now, nor are they currently contemplating doing so.
If a certificate gets lost, stolen or destroyed, you may be required to
furnish indemnity to the Trustee to receive replacement certificates.
You must surrender mutilated certificates to the Trustee for replacement.
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 the Trust for the year;
- - Any Securities sold during the year and the Securities held at the
end of that year by the 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
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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 the Trust's Securities to the Income Account of
the Trust. All other receipts, such as return of capital, are credited
to the Capital Account of the Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." Distribution amounts will vary with changes in the 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 the 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 the 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 the 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 the 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 the Trust, after deducting any unpaid expenses of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for any state and local taxes and any governmental charges to be
paid out of the Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of the 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 the 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
Page 19
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 the 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 the Trust.
If you are tendering 1,000 Units or more 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 the 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 the Trust to make funds available for
redemption. If Securities are sold, the size and diversification of the
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 not designated to purchase
Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made; and
5. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the 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."
Page 20
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to the Trust.
Except in the limited instance in which the Trust acquires Replacement
Securities to replace failed contracts to purchase Securities, as
described in "The FT Series," the Trust may not acquire any securities
or other property other than the Securities. The Trustee, on behalf of
the Trust, will reject any offer for new or exchanged securities or
property in exchange for a Security, such as those acquired in a merger
or other transaction. If such exchanged securities or property are
nevertheless acquired by the Trust, at our instruction, they will either
be sold or held in the Trust. In making the determination as to whether
to sell or hold the exchanged securities or property we may get advice
from the Portfolio Supervisor. Any proceeds received from the sale of
Securities, exchanged securities or property will be credited to the
Capital Account of the Trust for distributions to Unit holders or to
meet redemption requests. The Trustee may retain and pay us or an
affiliate of ours to act as agent for the Trust to facilitate selling
Securities, exchanged securities or property from the Trust. 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 the
Securities in the Trust may be changed. To get the best price for the
Trust we may have to specify minimum amounts (generally 100 shares) in
which blocks of Securities are to be sold. We may consider sales of
units of unit investment trusts which we sponsor in making
recommendations to the Trustee on the selection of broker/dealers to
execute the Trust's portfolio transactions, or when acting as agent for
the Trust in acquiring or selling Securities on behalf of the Trust.
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 Trust will terminate on
the Mandatory Termination Date. The Trust may be terminated prior to the
Mandatory Termination Date:
- - Upon the consent of 100% of the Unit holders;
- - If the value of the Securities owned by the 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 the Trust during the initial offering
period ("Discretionary Liquidation Amount); or
- - In the event that Units of the 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 the 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 the Trust prior to the Mandatory Termination Date for any
Page 21
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, the 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 the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner, timing and execution of
the sale of Securities as part of the termination of the 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 the 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 included in
the Trust (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 the Trust, within a reasonable time after the Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from
the Trust any accrued costs, expenses, advances or indemnities provided
by the Indenture, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to pay any
taxes or other governmental charges.
Information on the Underwriter, Sponsor, Trustee and
Evaluator
The Underwriter.
Advest, Inc. is a regional brokerage and investment banking firm and a
wholly-owned subsidiary of The Advest Group, Inc. With headquarters in
Hartford, Connecticut, the firm provides investment banking, securities
brokerage, trading and other financial advisory services to individual,
corporate and institutional clients.
The firm currently has 89 offices located in 16 states and the District
of Columbia and retail clients in all 50 states, with the largest
concentration in the Northeast and Midwest.
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 Trust or to
any series of the Trust 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, and its principal executive
office is 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 Trust, 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
Page 22
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable to Unit holders for taking any
action or for not taking any action in good faith according to the
Indenture. We will also not be accountable for errors in judgment. We
will only be liable for our own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the Trustee's case) or reckless
disregard of our obligations and duties. The Trustee is not liable for
any loss or depreciation when the Securities are sold. If we fail to act
under the Indenture, the Trustee may do so, and the Trustee will not be
liable for any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trust, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
However, the Evaluator will not be liable to the Trustee, Sponsor or
Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trust.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trust's
statement of net assets, including the schedule of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trust's statement of net assets,
including the schedule 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 Trust.
Page 23
FIRST TRUST (registered trademark)
Strategic Financial Institutions Trust, Year 2004 Series
FT 349
Underwriter:
ADVEST, INC.
90 State House Square
Hartford, Connecticut 06103
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 Strategic Financial
Institutions Trust, Year 2004 Series, 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. 333-77767) 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
June 24, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 24
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 349 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.
This Information Supplement is dated June 24, 1999. Capitalized terms
have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Concentrations 1
Financial Institutions 1
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.
Concentrations
Financial Institutions. An investment in Units of the Trust should be
made with an understanding of the problems and risks inherent in the
bank and financial services sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
Page 1
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Equity Securities in the Trust's portfolio cannot be
predicted with certainty. Periodic efforts to introduce legislation
broadening the ability of banks to compete with new products have not
been successful, but if enacted could lead to more failures as a result
of increased competition and added risks. Failure to enact such
legislation, on the other hand, may lead to declining earnings and an
inability to compete with unregulated financial institutions. Efforts to
expand the ability of federal thrifts to branch on an interstate basis
have been initially successful through promulgation of regulations, and
legislation to liberalize interstate banking has recently been signed
into law. Under the legislation, banks will be able to purchase or
establish subsidiary banks in any state, one year after the
legislation's enactment. Since mid-1997, banks have been allowed to turn
existing banks into branches. Consolidation is likely to continue. The
Securities and Exchange Commission and the Financial Accounting
Standards Board require the expanded use of market value accounting by
banks and have imposed rules requiring market accounting for investment
securities held in trading accounts or available for sale. Adoption of
additional such rules may result in increased volatility in the reported
health of the industry, and mandated regulatory intervention to correct
such problems. Additional legislative and regulatory changes may be
forthcoming. For example, the bank regulatory authorities have proposed
substantial changes to the Community Reinvestment Act and fair lending
laws, rules and regulations, and there can be no certainty as to the
effect, if any, that such changes would have on the Equity Securities in
the Trust's portfolio. In addition, from time to time the deposit
insurance system is reviewed by Congress and federal regulators, and
proposed reforms of that system could, among other things, further
restrict the ways in which deposited moneys can be used by banks or
reduce the dollar amount or number of deposits insured for any
depositor. Such reforms could reduce profitability as investment
opportunities available to bank institutions become more limited and as
consumers look for savings vehicles other than bank deposits. Banks and
thrifts face significant competition from other financial institutions
such as mutual funds, credit unions, mortgage banking companies and
insurance companies, and increased competition may result from
legislative broadening of regional and national interstate banking
powers as has been recently enacted. Among other benefits, the
legislation allows banks and bank holding companies to acquire across
previously prohibited state lines and to consolidate their various bank
subsidiaries into one unit. The Sponsor makes no prediction as to what,
if any, manner of bank and thrift regulatory actions might ultimately be
adopted or what ultimate effect such actions might have on the Trust's
portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Equity Securities or whether such approvals, if necessary,
will be obtained.
Some of the nation's largest banks, already working to upgrade their own
computer systems to meet the Year 2000 deadline, are concerned that some
Page 2
borrowers may fail to upgrade their computers in time, creating problem
loans and increasing overall loan losses. Banks considered most
vulnerable by analysts include those lending primarily to small
businesses, which aren't as likely as large businesses to have a plan
for upgrading their computers. Also at risk are banks with significant
exposure overseas, where many foreign businesses are not moving as
quickly to resolve this problem. Analysts warn that it will be difficult
for banks to determine their potential loan losses related to Year 2000
credit risk.
Page 3
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, FT 349, hereby identifies The First Trust
Special Situations Trust, Series 4; The First Trust Special
Situations Trust, Series 18; The First Trust Special Situations
Trust, Series 69; The First Trust Special Situations Trust,
Series 108; The First Trust Special Situations Trust, Series 119;
The First Trust Special Situations Trust, Series 190; and FT 286
for purposes of the representations required by Rule 487 and
represents the following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 349, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on June 24, 1999.
FT 349
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of )
Nike Securities )
Corporation, the ) June 24, 1999
General Partner of )
Nike Securities L.P. )
)
)
David J. Allen Director of ) Robert M. Porcellino
Nike Securities ) Attorney-in-Fact**
Corporation, the )
General Partner of )
Nike Securities L.P.
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated June 24, 1999 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-77767) and related Prospectus of FT 349.
ERNST & YOUNG LLP
Chicago, Illinois
June 24, 1999
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 349 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
MEMORANDUM
FT 349
File No. 333-77767
The Prospectus and the Indenture filed with Amendment No. 2
of the Registration Statement on Form S-6 have been revised to
reflect information regarding the execution of the Indenture and
the deposit of Securities on June 24, 1999 and to set forth
certain statistical data based thereon. In addition, there are a
number of other changes described below.
THE PROSPECTUS
Cover Page The date of the Trust has been added.
Page 3 The following information for the Trust appears:
The Aggregate Value of Securities initially
deposited have been added.
The initial number of units of the Trust
Sales charge
The Public Offering Price per Unit as of the
business day before the Initial Date of Deposit
The Mandatory Termination Date has been added.
Page 5 The Report of Independent Auditors has been
completed.
Page 6 The Statement of Net Assets has been completed.
Page 7 The Schedule of Investments has been completed.
Back Cover The date of the Prospectus has been included.
THE TRUST AGREEMENT AND STANDARD TERMS AND CONDITIONS OF TRUST
The Trust Agreement has been conformed to reflect
the execution thereof.
CHAPMAN AND CUTLER
June 24, 1999
FT 349
TRUST AGREEMENT
Dated: June 24, 1999
The Trust Agreement among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor, sets forth certain
provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust
for The First Trust Special Situations Trust, Series 22 and
certain subsequent Series, Effective November 20, 1991" (herein
called the "Standard Terms and Conditions of Trust"), and such
provisions as are incorporated by reference constitute a single
instrument. All references herein to Articles and Sections are
to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR STRATEGIC FINANCIAL INSTITUTIONS TRUST, YEAR 2004 SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0030 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Evaluator provides services during less than the whole of
such year). Such fee may exceed the actual cost of providing
such evaluation services for the Trust, but at no time will the
total amount received for evaluation services rendered to unit
investment trusts of which Nike Securities L.P. is the sponsor in
any calendar year exceed the aggregate cost to the Evaluator of
supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0096 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of Units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may otherwise be provided
in the Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less than
$2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is June 24,
1999.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 22 shall include FT 349.
B. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
C. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
D. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
E. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
F. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
"(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, and/or (iii) cash (or a Letter of Credit in
lieu of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit."
G. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for any
Letter(s) of Credit deposited with the Trustee in connection with
the deposits described in Section 2.01(a) and (b) cash in an
amount sufficient to satisfy the obligations to which the
Letter(s) of Credit relates. Any substituted Letter(s) of Credit
shall be released by the Trustee."
H. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
I. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the earlier of six months
after the Initial Date of Deposit or the conclusion of the
primary offering period (as certified by the Depositor to
the Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust in an amount certified to the Trustee
by the Depositor. In no event shall the amount paid by the
Trustee to the Depositor for the Depositors reimbursable
expenses of organizing the Trust exceed the estimated per
Unit amount of organization costs set forth in the
prospectus for the Trust multiplied by the number of Units
of the Trust outstanding at the earlier of six months after
the Initial Date of Deposit or the conclusion of the primary
offering period; nor shall the Depositor be entitled to or
request reimbursement for expenses of organizing the Trust
incurred after the earlier of six months after the Initial
Date of Deposit or the conclusion of the primary offering
period. If the cash balance of the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, sell Securities identified by the
Depositor, or distribute to the Depositor Securities having
a value, as determined under Section 4.01 as of the date of
distribution, sufficient for such reimbursement. Securities
sold or distributed to the Depositor to reimburse the
Depositor pursuant to this Section shall be sold or
distributed by the Trustee, to the extent practicable, in
the percentage ratio then existing. The reimbursement
provided for in this section shall be for the account of the
Unit holders of record at the earlier of six months after
the Initial Date of Deposit or the conclusion of the primary
offering period. Any assets deposited with the Trustee in
respect of the expenses reimbursable under this Section 3.01
shall be held and administered as assets of the Trust for
all purposes hereunder. The Depositor shall deliver to the
Trustee any cash identified in the Statement of Net Assets
of the Trust included in the Prospectus not later than the
expiration of the Delivery Period and the Depositors
obligation to make such delivery shall be secured by the
letter of credit deposited pursuant to Section 2.01. Any
cash which the Depositor has identified as to be used for
reimbursement of expenses pursuant to this Section 3.01
shall be held by the Trustee, without interest, and reserved
for such purpose and, accordingly, prior to the earlier of
six months after the Initial Date of Deposit or the
conclusion of the primary offering period, shall not be
subject to distribution or, unless the Depositor otherwise
directs, used for payment of redemptions in excess of the
per Unit amount payable pursuant to the next sentence. If a
Unit holder redeems Units prior to the earlier of six months
after the Initial Date of Deposit or the conclusion of the
primary offering period, the Trustee shall pay to the Unit
holder, in addition to the Redemption Value of the tendered
Units, unless otherwise directed by the Depositor, an amount
equal to the estimated per Unit cost of organizing the Trust
set forth in the Prospectus, or such lower revision thereof
most recently communicated to the Trustee by the Depositor
pursuant to Section 5.01, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in
the Trust is insufficient for such payment, the Trustee
shall have the power to sell Securities in accordance with
Section 5.02. As used herein, the Depositor's reimbursable
expenses of organizing the Trust shall include the cost of
the initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses.
J. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
K. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) if provided
for in the Prospectus, the following reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
L. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
M. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
N. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Capital Account and pay to the Depositor the amount
that it is entitled to receive pursuant to Section 3.14.
O. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
P. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in the amount of $.0035 per Unit,
calculated based on the largest number of Units outstanding
during the calendar year except during the initial offering
period as determined in Section 4.01 of this Indenture, in
which case the fee is calculated based on the largest number
of Units outstanding during the period for which the
compensation is paid (such annual fee to be pro rated for
any calendar year in which the Portfolio Supervisor provides
services during less than the whole of such year). Such fee
may exceed the actual cost of providing such portfolio
supervision services for the Trust, but at no time will the
total amount received for portfolio supervision services
rendered to unit investment trusts of which Nike Securities
L.P. is the sponsor in any calendar year exceed the
aggregate cost to the Portfolio Supervisor of supplying such
services in such year."
Q. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in the amount of $.0033 per Unit, calculated based on the
largest number of Units outstanding during the calendar year
except during the initial offering period as determined in
Section 4.01 of this Indenture, in which case the fee is
calculated based on the largest number of Units outstanding
during the period for which the compensation is paid (such
annual fee to be pro rated for any calendar year in which
the Depositor provides services during less than the whole
of such year). Such fee may exceed the actual cost of
providing such bookkeeping and administrative services for
the Trust, but at no time will the total amount received for
bookkeeping and administrative services rendered to unit
investment trusts of which Nike Securities L.P. is the
sponsor in any calendar year exceed the aggregate cost to
the Depositor of supplying such services in such year. Such
compensation may, from time to time, be adjusted provided
that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of an invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Income and Capital Accounts on or before
the Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have no
liability to any Certificateholder or other person for any
payment made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the
Redemption Price payable to such Unit holder an amount equal
to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus, on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02 less the unpaid portion of the
deferred sales charge. All advances made by the Trustee
pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unit holders."
S. Notwithstanding anything to the contrary in Sections
3.15 and 4.05 of the Standard Terms and Conditions of Trust, so
long as Nike Securities L.P. is acting as Depositor, the Trustee
shall have no power to remove the Portfolio Supervisor.
T. The first sentence of Section 4.03 shall be amended to
read as follows:
"As compensation for providing evaluation services under
this Indenture, the Evaluator shall receive, in arrears, against
a statement or statements therefor submitted to the Trustee
monthly or annually an aggregate annual fee equal to the amount
specified as compensation for the Evaluator in the Trust
Agreement, calculated based on the largest number of Units
outstanding during the calendar year except during the initial
offering period as determined in Section 4.01 of this Indenture,
in which case the fee is calculated based on the largest number
of Units outstanding during the period for which the compensation
is paid (such annual fee to be pro rated for any calendar year in
which the Evaluator provides services during less than the whole
of such year). Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does not, at
the time of such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for services
as measured by the United States Department of Labor Consumer
Price Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be published. The
consent or concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such compensation
shall be paid by the Trustee, upon receipt of invoice therefor
from the Evaluator, upon which, as to the cost incurred by the
Evaluator of providing services hereunder the Trustee may rely,
and shall be charged against the Income and/or Capital Accounts,
in accordance with Section 3.05."
U. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organization costs, and (iv)" ; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
"Prior to the payment to the Depositor of its
reimbursable organization costs to be made at the
earlier of six months after the Initial Date of Deposit
or the conclusion of the primary offering period in
accordance with Section 3.01, for purposes of
determining the Trust Fund Evaluation under this
Section 5.01, the Trustee shall rely upon the amounts
representing unpaid accrued organization costs in the
estimated amount per Unit set forth in the Prospectus
until such time as the Depositor notifies the Trustee
in writing of a revised estimated amount per Unit
representing unpaid accrued organization costs. Upon
receipt of such notice, the Trustee shall use this
revised estimated amount per Unit representing unpaid
accrued organization costs in determining the Trust
Fund Evaluation but such revision of the estimated
expenses shall not effect calculations made prior
thereto and no adjustment shall be made in respect
thereof. "
V. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the
Prospectus, Unit holders may redeem 1,000 Units or more of a
Trust and request a distribution in kind of (i) such Unit
holder's pro rata portion of each of the Securities in such
Trust, in whole shares, and (ii) cash equal to such Unit
holder's pro rata portion of the Income and Capital Accounts
as follows: (x) a pro rata portion of the net proceeds of
sale of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Capital Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, if applicable, to the extent possible,
distributions of Securities pursuant to an in kind
redemption of Units shall be made by the Trustee through the
distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker-dealer at
the Depository Trust Company. Any distribution in kind will
be reduced by customary transfer and registration charges."
W. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value of
Securities deposited in such Trust during the initial
offering period, or (ii)"
X. The third sentence of paragraph (a) of Section 6.05 of
the Standard Terms and Conditions of Trust shall be replaced in
its entirety by the following:
"In case at any time the Trustee shall become incapable of
acting, or if a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Trustee in
an involuntary case, or the Trustee shall commence a voluntary
case, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any receiver,
liquidator, assignee, custodian, trustee, sequestrator (or
similar official) for the Trustee or for any substantial part of
its property shall be appointed, or the Trustee shall make any
general assignment for the benefit of creditors, or shall
generally fail to pay its debts as they become due, or if the
Sponsor shall determine in good faith that there has occurred
either (1) a material deterioration in the creditworthiness of
the Trustee or (2) one or more negligent acts on the part of the
Trustee having a materially adverse effect, either singly or in
the aggregate, on the Trust or on one or more Trusts of one or
more Funds, such that the replacement of the Trustee is in the
best interests of the Unit holders, the Sponsor may remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee so
removed and one copy to the successor trustee."
Y. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"The Trustee will honor duly executed requests for in-
kind distributions received (accompanied by the electing
Unit holder's Certificate, if issued) by the close of
business ten business days prior to the Mandatory
Termination Date."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Senior Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Rosalia A. Raviele
Vice President
[SEAL]
ATTEST:
Joan Currie
Assistant Treasurer
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 349
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 24, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 349
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 349 in connection with the
preparation, execution and delivery of a Trust Agreement dated
June 24, 1999 among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P. as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-77767)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 24, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: FT 349
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 349 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in the Trust of said Fund (the
"Trust"), under a Trust Agreement, dated June 24, 1999 (the
"Indenture"), among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee and First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds Equity Securities as such term is defined in the
Prospectus. For purposes of the following discussion and
opinion, it is assumed that each Equity Security is equity for
Federal income tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing United States Federal income tax
law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of the Trust under the Internal Revenue Code of 1986 (the
"Code") in the proportion that the number of Units held by him
bears to the total number of Units outstanding; under Subpart E,
Subchapter J of Chapter 1 of the Code, income of the Trust will
be treated as income of the Unit holders in the proportion
described above; and an item of Trust income will have the same
character in the hands of a Unit holder as it would have in the
hands of the Trustee. Each Unit holder will be considered to
have received his pro rata share of income derived from each
Trust asset when such income is considered to be received by the
Trust.
II. The price a Unit holder pays for his Units, generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the valuation date closest to the
date the Unit holder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Equity Security
held by the Trust. For Federal income tax purposes, a Unit
holder's pro rata portion of distributions of cash or property by
a corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code) is taxable as ordinary income
to the extent of such corporation's current and accumulated
"earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Equity Security which exceeds such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such
Equity Security shall be treated as gain from the sale or
exchange of property.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from
the Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, taxable exchange, liquidation, redemption, payment on
maturity or otherwise) gain or loss will be recognized to the
Unit holder (subject to various nonrecognition provisions under
the Code) and the amount thereof will be measured by comparing
the Unit holder's aliquot share of the total proceeds from the
transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning the
tax basis for his Units (as of the date on which his Units were
acquired) among each of the Trust's assets (as of the date on
which his Units were acquired) ratably according to their values
as of the valuation date nearest the date on which he purchased
such Units. A Unit holder's basis in his Units and of his
fractional interest in each Trust asset must be reduced, but not
below zero, by the Unit holder's pro rata portion of dividends
with respect to each Equity Security which is not taxable as
ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or
upon the termination of the Trust. As previously discussed,
prior to the redemption of Units or the termination of the Trust,
a Unit holder is considered as owning a pro rata portion of each
of the Trust's assets. The receipt of an in kind distribution
will result in a Unit holder receiving an undivided interest in
whole shares of stock and possibly cash. The potential federal
income tax consequences which may occur under an in kind
distribution with respect to each Equity Security owned by the
Trust will depend upon whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this
purpose is a particular class of stock issued by a particular
corporation. A Unit holder will not recognize gain or loss if a
Unit holder only receives Equity Securities in exchange for his
or her pro rata portion of the Equity Securities held by the
Trust. However, if a Unit holder also receives cash in exchange
for a fractional share of an Equity Security held by the Trust,
such Unit holder will generally recognize gain or loss based upon
the difference between the amount of cash received by the Unit
holder and his tax basis in such fractional share of an Equity
Security held by the Trust. The total amount of taxable gains
(or losses) recognized upon such redemption will generally equal
the sum of the gain (or loss) recognized under the rules
described above by the redeeming Unit holder with respect to each
Equity Security owned by the Trust.
A domestic corporation owning Units in the Trust may be
eligible for the 70% dividends received deduction pursuant to
Section 243(a) of the Code with respect to such Unit holder's pro
rata portion of dividends received by such Trust (to the extent
such dividends are taxable as ordinary income, as discussed
above, and are attributable to domestic corporations), subject to
the limitations imposed by Sections 246 and 246A of the Code.
Section 67 of the Code provides that certain miscellaneous
itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
A Unit holder will recognize taxable gain (or loss)when all
or part of the pro rata interest in an Equity Security is either
sold by the Trust or redeemed or when a Unit holder disposes of
his Units in a taxable transaction, in each case for an amount
greater (or less) than his tax basis therefor; subject to various
nonrecognition provisions of the Code.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including foreign, state or local taxes or collateral tax
consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-77767)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
June 24, 1999
The Chase Manhattan Bank, as Trustee of
FT 349
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 349
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts contained in
FT 349 (each, a "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated November 20, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator, First
Trust Advisors L.P., as Portfolio Supervisor, and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the
terms of the Indenture, units of fractional undivided interest in
the Trust (the "Units") will be issued in the aggregate number
set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that the
Trust will not constitute an association taxable as a corporation
under New York law, and accordingly will not be subject to the
New York State franchise tax or the New York City general
corporation tax.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-77767) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name in such Registration Statement and the preliminary
prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
June 24, 1999
The Chase Manhattan Bank, as Trustee of
FT 349
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 349
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor, and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in FT
349 (each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "Units"), each of which
represents an undivided interest in the respective Trust which
consists of common stocks (including, confirmations of contracts
for the purchase of certain stocks not delivered and cash, cash
equivalents or an irrevocable letter of credit or a combination
thereof, in the amount required for such purchase upon the
receipt of such stocks), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued hereunder (the "Certificates"), the
Closing Memorandum dated today's date, and such other documents
as we have deemed necessary in order to render this opinion.
Based on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a Trust Company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration
books of the Trust the ownership of the Units by the Depositor.
Upon receipt of confirmation of the effectiveness of the
registration statement for the sale of the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, the Trustee may deliver Certificates for such Units, in
such names and denominations as the Depositor may request, to or
upon the order of the Depositor as provided in the Closing
Memorandum.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
June 24, 1999
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 349
Gentlemen:
We have examined the Registration Statement File No.
333-77767 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert W. Bredemeier
Senior Vice President
