File No. 333-82015
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
FT 353
BANDWIDTH SOLUTIONS PORTFOLIO SERIES
ENERGY PORTFOLIO, SERIES 6
FINANCIAL SERVCES PORTFOLIO, SERIES 7
PHARMACEUTICAL PORTFOLIO, SERIES 7
TECHNOLOGY PORTFOLIO, SERIES 10
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : September 29, 2000
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
13,095,272 UNITS
PROSPECTUS
Part One
Dated September 27, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Bandwith Solutions Portfolio Series (the "Trust") is a unit investment
trust consisting of a diversified portfolio containing common stocks of
telecommunications companies which focus on bandwith technologies. At August
16, 2000, each Unit represented a 1/13,095,272 undivided interest in the
principal and net income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by us, Nike Securities L.P., the sponsor of the
Trust in the secondary market or from the Trustee after having been tendered
for redemption. The profit or loss resulting from the sale of Units will
accrue to us. No proceeds from the sale of Units will be received by the
Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 4.0% of the Public Offering Price (4.167%
of the net amount invested) excluding income and principal cash. At August
16, 2000, the Public Offering Price per Unit was $16.123 (see "Public
Offering" in Part Two). The minimum purchase is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 13,095,272
Fractional Undivided Interest in the Trust per Unit 1/13,095,272
Public Offering Price:
Aggregate Value of Securities in the Portfolio $203,554,008
Aggregate Value of Securities per Unit $15.544
Income and Principal cash (overdraft) in the Portfolio $(904,432)
Income and Principal cash (overdraft) per Unit $(.069)
Sales Charge 4.167% (4.0% of Public Offering Price,
excluding income and principal cash) $.648
Public Offering Price per Unit $16.123
Redemption Price and our Repurchase Price per Unit
($.648 less than the Public Offering Price per Unit) $15.475
</TABLE>
Date Trust Established July 15, 1999
Mandatory Termination Date July 15, 2004
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of ours Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0015 per
payable to us Unit outstanding annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable 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 $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: The last day of each June and December.
A Unit holder who owns at least 1,000 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 353,
Bandwith Solutions Portfolio Series
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 353, Bandwith Solutions Portfolio Series as of
May 31, 2000, and the related statements of operations and changes in net
assets for the period from the Initial Date of Deposit, July 15, 1999, to May
31, 2000. These financial statements are the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
May 31, 2000, by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 353, Bandwith Solutions
Portfolio Series at May 31, 2000 and the results of its operations and changes
in its net assets for the period from the Initial Date of Deposit, July 15,
1999, to May 31, 2000, in conformity with accounting principles generally
accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 8, 2000
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $139,797,148)
(Note 1) $197,518,993
Dividends receivable 6,545
Cash 599,066
Receivable from investment transactions 379,068
___________
198,503,672
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Liability for deferred sales charge (Note 3) 975,397
Accrued liabilities 85,708
Unit redemptions payable 561,023
__________
1,622,128
__________
Net assets, applicable to 13,892,702 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $139,797,148
Net unrealized appreciation (Note 2) 57,721,845
Distributable funds 5,079,434
Less deferred sales charge paid or
accrued (Note 3) (5,633,725)
Less organization and offering costs
(Note 1) (83,158)
_________
$196,881,544
============
Net asset value per unit $14.172
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
PORTFOLIO - See notes to portfolio.
May 31, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
Cable TV
131,357 Comcast Corporation (Class A Special) $4,975,146
130,156 Cox Communications, Inc. (Class A) 5,743,134
Communications Services
70,245 ALLTEL Corporation 4,596,692
90,934 AT&T Corp. 3,154,319
82,146 Bell Atlantic Corporation 4,343,470
115,138 BellSouth Corporation. 5,375,563
80,499 Level 3 Communications, Inc. 6,143,120
147,876 Qwest Communications International, Inc. 6,257,078
95,195 SBC Communications Inc. 4,158,879
102,437 Sprint Corporation (FON Group) 6,197,438
87,247 (1) WorldCom, Inc. (formerly MCI WorldCom, Inc.) 3,282,668
Data Networking/Communications Equipment
228,986 (2) ADC Telecommunications, Inc. 15,385,111
73,677 (2) Broadcom Corporation (Class A) 9,582,652
159,059 (2) Cisco Systems, Inc. 9,066,363
130,284 (2) Comverse Technology, Inc. 11,904,700
136,445 ECI Telecom Limited 3,701,071
71,440 Lucent Technologies Inc. 4,098,870
228,350 (3) Nortel Networks Corporation 12,402,374
156,613 (1) PMC-Sierra, Inc. 24,000,942
74,789 Tellabs, Inc. 4,856,648
153,054 (1) Vitesse Semiconductor Corporation 7,748,359
Wireless Communications
718,436 (4) LM Ericsson AB (Class B)(ADR) 14,727,938
53,521 Motorola, Inc. 5,017,594
220,227 (4) Nokia OY (ADR) 11,451,804
140,822 (4) QUALCOMM Incorporated 9,347,060
____________
Total investments $197,518,993
============
</TABLE>
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
NOTES TO PORTFOLIO
May 31, 2000
(1) The number of shares reflects the effect of a three for two stock split.
(2) The number of shares reflects the effect of a two for one stock split.
(3) The number of shares reflects the effect of two two for one stock
splits.
(4) The number or shares reflects the effect of a four for one stock split.
See accompanying notes to financial statements.
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
STATEMENT OF OPERATIONS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Dividends $581,245
Expenses:
Trustee's fees and related expenses (124,571)
Evaluator's fees (26,077)
Supervisory fees (41,030)
Administrative fees (13,804)
___________
Total expenses (205,482)
___________
Investment income - net 375,763
Net gain (loss) on investments:
Net realized gain (loss) 13,574,247
Change in net unrealized appreciation
or depreciation 57,721,845
___________
71,296,092
___________
Net increase (decrease) in net assets resulting
from operations $71,671,855
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
STATEMENT OF CHANGES IN NET ASSETS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Net increase (decrease) in net assets resulting
from operations:
Investment income - net $375,763
Net realized gain (loss) on investments 13,574,247
Change in net unrealized appreciation
or depreciation on investments 57,721,845
____________
71,671,855
Units issued (16,081,334 units, net of deferred
sales charges of $5,628,467 and net of organization
and offering costs of $82,820) 159,208,335
Unit redemptions (2,203,654 units) (34,141,771)
Distributions to unit holders:
Investment income - net -
Principal from investment transactions -
____________
-
____________
Total increase (decrease) in net assets 196,738,419
Net assets:
At the beginning of the period
(representing 15,022 units outstanding) 143,125
____________
At the end of the period (including
distributable funds applicable to Trust
units of $5,079,434 at May 31, 2000) $196,881,544
============
Trust units outstanding at the end of
the period 13,892,702
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of ours
(Nike Securities L.P., the Sponsor of the Trust).
Dividend Income Trust -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of ours and an annual administrative fee payable
to us.
Organization and offering costs -
A portion of the Public Offering Price paid by unit holders consisted of
Equity Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing the Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the Trust's portfolio, legal fees and the initial fees and
expenses of the Trustee. Such costs, totaling $83,158 were paid at the end of
the Trust's initial offering period.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 2000 follows:
<TABLE>
<S> <C>
Unrealized appreciation $65,157,241
Unrealized depreciation (7,435,396)
___________
$57,721,845
===========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.350 per unit which will be paid to
us over a five-month period ending on June 20, 2000, plus an initial sales
charge equal to the difference between the deferred sales charge and the total
sales charge of 4.50% of the public offering price which is equivalent to
approximately 4.545% of the net amount invested, exclusive of the deferred
sales charge. The remaining installment of the deferred sales charge is
presented as a liability in the accompanying statement of assets and
liabilities.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of June and
December to unit holders of record on the fifteenth day of June and December.
Capital distributions to unit holders, if any, are made on the last day of
each month to unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $.01 per unit.
Notwithstanding, capital distributions, if any, will be made in December of
each year. The Trust made no distributions to unit holders during the period
ended May 31, 2000.
<PAGE>
Selected data per unit of the Trust
outstanding throughout the period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
July 15,
1999, to
May 31, 2000
<S> <C>
Dividend Income Trust $.048
Expenses (.017)
_______
Investment income - net .031
Distributions to unit holders:
Investment income - net -
Principal from investment transactions -
Net gain (loss) on investments 4.613
_______
Total increase (decrease) in net assets 4.613
Net assets:
Beginning of the period 9.528
_______
End of the period $14.172
=======
</TABLE>
Dividend Income Trust, Expenses and Investment income - net per unit have been
calculated based on the weighted-average number of units outstanding during
the period (12,209,142 units). The Net gain (loss) on investments per unit
includes the effects of changes arising from issuance of 16,081,334 additional
units during the period at net asset values which differed from the net asset
value per unit of the original 15,022 units ($9.528 per unit) on July 15,
1999.
<PAGE>
FT 353
BANDWITH SOLUTIONS PORTFOLIO SERIES
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
739,353 UNITS
PROSPECTUS
Part One
Dated September 27, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Energy Portfolio, Series 6 (the "Trust") is a unit investment trust
consisting of a diversified portfolio containing common stocks of companies
involved in the energy industry. At August 16, 2000, each Unit represented a
1/739,353 undivided interest in the principal and net income of the Trust (see
"The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by us, Nike Securities L.P., the sponsor of the
Trust in the secondary market or from the Trustee after having been tendered
for redemption. The profit or loss resulting from the sale of Units will
accrue to us. No proceeds from the sale of Units will be received by the
Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 4.0% of the Public Offering Price (4.167%
of the net amount invested) excluding income and principal cash. At August
16, 2000, the Public Offering Price per Unit was $13.954 (see "Public
Offering" in Part Two). The minimum purchase is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 739,353
Fractional Undivided Interest in the Trust per Unit 1/739,353
Public Offering Price:
Aggregate Value of Securities in the Portfolio $9,884,431
Aggregate Value of Securities per Unit $13.369
Income and Principal cash in the Portfolio $20,529
Income and Principal cash per Unit $.028
Sales Charge 4.167% (4.0% of Public Offering Price,
excluding income and principal cash) $.557
Public Offering Price per Unit $13.954
Redemption Price and our Repurchase Price per Unit
($.557 less than the Public Offering Price per Unit) $13.397
</TABLE>
Date Trust Established July 15, 1999
Mandatory Termination Date July 15, 2004
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of ours Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0015 per
payable to us Unit outstanding annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable 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 $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: The last day of each June and December.
A Unit holder who owns at least 1,000 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 353,
Energy Portfolio, Series 6
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 353, Energy Portfolio, Series 6 as of May 31,
2000, and the related statements of operations and changes in net assets for
the period from the Initial Date of Deposit, July 15, 1999, to May 31, 2000.
These financial statements are the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
May 31, 2000, by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 353, Energy Portfolio,
Series 6 at May 31, 2000, and the results of its operations and changes in its
net assets for the period from the Initial Date of Deposit, July 15, 1999, to
May 31, 2000, in conformity with accounting principles generally accepted in
the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 8, 2000
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $7,169,268)
(Note 1) $10,518,759
Dividends receivable 13,199
Cash 39,608
Receivable from investment transactions 106,924
___________
10,678,490
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Liability for deferred sales charge (Note 3) 57,277
Accrued liabilities 6,006
Unit redemptions payable 105,869
___________
169,152
___________
Net assets, applicable to 809,617 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $7,619,268
Net unrealized appreciation (Note 2) 2,899,491
Distributable funds 422,494
Less deferred sales charge paid or
accrued (Note 3) (413,257)
Less organization and offering costs
(Note 1) (18,658)
__________
$10,509,338
===========
Net asset value per unit $12.981
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
PORTFOLIO - See notes to portfolio.
May 31, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
Natural Gas
8,487 El Paso Energy Corporation $437,081
7,404 (1) Enron Corp. 539,566
Oil & Gas-Drilling
9,484 Diamond Offshore Drilling, Inc. 387,659
17,653 Global Marine Inc. 499,809
13,262 Nabors Industries, Inc. 570,266
14,398 Noble Drilling Corporation 624,513
14,107 Santa Fe International Corporation 547,535
11,026 Transocean Sedco Forex, Inc. (formerly
Transocean Offshore, Inc. 542,348
Oil & Gas-Exploration & Production
7,881 Barrett Resources Corporation 311,796
5,776 Vastar Resources, Inc. 470,386
Oil-Field Services
10,286 BJ Services Company 736,735
9,138 Baker Hughes Incorporated 331,252
8,479 Cooper Cameron Corporation 591,410
26,597 Global Industries, Ltd. 468,772
6,605 Halliburton Company 336,855
15,719 Petroleum Geo-Services (ADR) 299,651
4,592 Schlumberger Limited 337,801
10,189 Tidewater Inc. 396,097
Oil-Integrated
5,223 (1) BP Amoco Plc (ADR) 284,001
3,107 Chevron Corporation 287,205
5,057 ENI SpA (ADR) 274,661
3,821 Exxon Mobil Corporation (formerly
Exxon Corporation) 318,339
4,861 Royal Dutch Petroleum Company 303,511
4,364 Texaco Inc. 250,659
4,698 Total Fina SA (ADR) 370,851
__________
Total investments $10,518,759
==========
</TABLE>
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
NOTES TO PORTFOLIO
Mqy 31, 2000
(1) The number of shares reflects the effect of a two for one stock split.
See accompanying notes to financial statements.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
STATEMENT OF OPERATIONS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Dividends $96,376
Expenses:
Trustee's fees and related expenses (9,212)
Evaluator's fees (1,869)
Supervisory fees (3,025)
Administrative fees (1,020)
__________
Total expenses (15,126)
__________
Investment income - net 81,250
Net gain (loss) on investments:
Net realized gain (loss) 663,977
Change in net unrealized appreciation
or depreciation 2,899,491
__________
3,563,468
__________
Net increase (decrease) in net assets resulting
from operations $3,644,718
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
STATEMENT OF CHANGES IN NET ASSETS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Net increase (decrease) in net assets resulting
from operations:
Investment income - net $81,250
Net realized gain (loss) on investments 663,977
Change in net unrealized appreciation
or depreciation on investments 2,899,491
___________
3,644,718
Units issued (1,165,792 units, net of deferred
sales charges of $408,027 and net of organization
and offering costs of $18,322) 10,851,228
Unit redemptions (371,118 units) (4,091,232)
Distributions to unit holders:
Investment income - net (37,747)
Principal from investment transactions -
___________
(37,747)
___________
Total increase (decrease) in net assets 10,366,967
Net assets:
At the beginning of the period
(representing 14,943 units outstanding) 142,371
___________
At the end of the period (including
distributable funds applicable to Trust
units of $422,494 at May 31, 2000) $10,509,338
===========
Trust units outstanding at the end of
the period 809,617
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of ours
(Nike Securities L.P., the Sponsor of the Trust).
Dividend Income Trust -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of ours and an annual administrative fee payable
to us.
Organization and offering costs -
A portion of the Public Offering Price paid by unit holders consisted of
Equity Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing the Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the Trust's portfolio, legal fees and the initial fees and
expenses of the Trustee. Such costs, totaling $18,658 were paid at the end of
the Trust's initial offering period.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 2000 follows:
<TABLE>
<S> <C>
Unrealized appreciation $2,964,102
Unrealized depreciation (64,611)
__________
$2,899,491
==========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.350 per unit which will be paid to
us over a five-month period ending on June 20, 2000, plus an initial sales
charge equal to the difference between the deferred sales charge and the total
sales charge of 4.50% of the public offering price which is equivalent to
approximately 4.545% of the net amount invested, exclusive of the deferred
sales charge. The remaining installment of the deferred sales charge is
presented as a liability in the accompanying statement of assets and
liabilities.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of June and
December to unit holders of record on the fifteenth day of June and December.
Capital distributions to unit holders, if any, are made on the last day of
each month to unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $.01 per unit.
Notwithstanding, capital distributions, if any, will be made in December of
each year.
<PAGE>
Selected data per unit of the Trust
outstanding throughout the period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
July 15,
1999, to
May 31, 2000
<S> <C>
Dividend Income Trust $.113
Expenses (.018)
______
Investment income - net .095
Distributions to unit holders:
Investment income - net (.034)
Principal from investment transactions -
Net gain (loss) on investments 3.392
______
Total increase (decrease) in net assets 3.453
Net assets:
Beginning of the period 9.528
______
End of the period $12.981
======
</TABLE>
Dividend Income Trust, Expenses and Investment income - net per unit have been
calculated based on the weighted-average number of units outstanding during
the period (853,452 units). Distributions to unit holders of Investment
income - net per unit reflects the Trust's actual distribution of
approximately $.034 per unit to 1,097,309 units on December 31, 1999. The Net
gain (loss) on investments per unit includes the effects of changes arising
from issuance of 1,165,792 additional units during the period at net asset
values which differed from the net asset value per unit of the original 14,943
units ($9.528 per unit) on July 15, 1999.
<PAGE>
FT 353
ENERGY PORTFOLIO, SERIES 6
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
6,971,162 UNITS
PROSPECTUS
Part One
Dated September 27, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Financial Services Portfolio, Series 7 (the "Trust") is a unit investment
trust consisting of a diversified portfolio containing common stocks of
companies involved in the financial services industry. At August 16, 2000,
each Unit represented a 1/6,971,162 undivided interest in the principal and
net income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by us, Nike Securities L.P., the sponsor of the
Trust in the secondary market or from the Trustee after having been tendered
for redemption. The profit or loss resulting from the sale of Units will
accrue to us. No proceeds from the sale of Units will be received by the
Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 4.0% of the Public Offering Price (4.167%
of the net amount invested) excluding income and principal cash. At August
16, 2000, the Public Offering Price per Unit was $10.845 (see "Public
Offering" in Part Two). The minimum purchase is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 6,971,162
Fractional Undivided Interest in the Trust per Unit 1/6,971,162
Public Offering Price:
Aggregate Value of Securities in the Portfolio $72,589,347
Aggregate Value of Securities per Unit $10.413
Income and Principal cash (overdraft) in the Portfolio $(16,086)
Income and Principal cash (overdraft) per Unit $(.002)
Sales Charge 4.167% (4.0% of Public Offering Price,
excluding income and principal cash) $.434
Public Offering Price per Unit $10.845
Redemption Price and our Repurchase Price per Unit
($.434 less than the Public Offering Price per Unit) $10.411
</TABLE>
Date Trust Established July 15, 1999
Mandatory Termination Date July 15, 2004
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of ours Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0015 per
payable to us Unit outstanding annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable 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 $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: The last day of each June and December.
A Unit holder who owns at least 1,000 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 353,
Financial Services Portfolio, Series 7
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 353, Financial Services Portfolio, Series 7 as
of May 31, 2000, and the related statements of operations and changes in net
assets for the period from the Initial Date of Deposit, July 15,1999 to May
31, 2000. These financial statements are the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
May 31, 2000, by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 353, Financial Services
Portfolio, Series 7 at May 31, 2000, and the results of its operations and
changes in its net assets for the period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000, in conformity with accounting principles
generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 8, 2000
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $64,346,190)
(Note 1) $69,919,256
Dividends receivable 79,175
Cash 609,909
Receivable from investment transactions 94,197
___________
70,702,537
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Liability for deferred sales charge (Note 3) 526,790
Accrued liabilities 45,842
Unit redemptions payable 93,460
__________
666,092
__________
Net assets, applicable to 7,515,175 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $64,346,190
Net unrealized appreciation (Note 2) 5,573,066
Distributable funds 3,130,708
Less deferred sales charge paid or
accrued (Note 3) (2,976,691)
Less organization and offering costs
(Note 1) (36,828)
___________
$70,036,445
===========
Net asset value per unit $9.319
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
PORTFOLIO - See notes to portfolio.
May 31, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
Bank & Thrifts
31,976 BankAmerica Corporation (formerly Bank of
of America Corporation) 1,776,682
93,503 (1) Charter One Financial, Inc. 2,127,193
28,008 The Chase Manhattan Corporation 2,091,862
56,378 Fleet Boston Financial Corporation (formerly
Fleet Financial Group, Inc.) 2,131,822
31,725 State Street Corporation 3,537,337
71,721 U.S. Bancorp 1,864,746
66,657 Washington Mutual, Inc. 1,916,389
55,585 Wells Fargo Company 2,515,221
Financial Services
54,165 (2) American Express Company 2,914,781
42,818 Capital One Financial Corporation 2,023,152
49,829 Citigroup Inc. 3,098,766
56,517 Countrywide Credit Industries, Inc. 1,737,898
34,097 Fannie Mae 2,050,082
41,091 Freddie Mac 1,828,549
50,113 Household International, Inc. 2,355,311
79,678 MBNA Corporation 2,221,024
23,333 Providian Financial Corporation 2,075,190
Insurance
52,872 AFLAC Incorporated 2,732,848
69,646 (3) AXA Financial, Inc. (formerly The
Equitable Companies, Incorporated) 2,711,876
61,343 The Allstate Corporation 1,625,589
25,350 American International Group, Inc. 2,853,472
34,614 The Chubb Corporation 2,422,980
42,879 MGIC Investment Corporation 2,125,212
16,852 The Progressive Corporation 1,581,981
Investment Services
59,776 Franklin Resources, Inc. 1,793,280
40,824 Lehman Brothers Holdings Inc. 3,151,123
29,635 Merrill Lynch & Co., Inc. 2,922,752
45,927 (3) Morgan Stanley Dean Witter & Co. 3,303,897
66,711 T. Rowe Price Associates, Inc. 2,547,560
65,415 (4) The Charles Schwab Corporation 1,880,681
___________
Total investments $69,919,256
===========
</TABLE>
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
NOTES TO PORTFOLIO
May 31, 2000
(1) The number of shares reflects the effect of a 5% stock dividend.
(2) The number of shares reflects the effect of a three for one stock split.
(3) The number of shares reflects the effect of a two for one stock split.
(4) The number of shares reflects the effect of a three for two stock split.
See accompanying notes to financial statements.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
STATEMENT OF OPERATIONS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Dividends $841,239
Expenses:
Trustee's fees and related expenses (64,368)
Evaluator's fees (11,898)
Supervisory fees (19,216)
Administrative fees (6,370)
__________
Total expenses (101,852)
__________
Investment income - net 739,387
Net gain (loss) on investments:
Net realized gain (loss) (459,376)
Change in net unrealized appreciation
or depreciation 5,573,066
__________
5,113,690
__________
Net increase (decrease) in net assets resulting
from operations $5,853,077
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
STATEMENT OF CHANGES IN NET ASSETS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Net increase (decrease) in net assets resulting
from operations:
Investment income - net $739,387
Net realized gain (loss) on investments (459,376)
Change in net unrealized appreciation
or depreciation on investments 5,573,066
___________
5,853,077
Units issued (8,489,851 units, net of deferred
sales charges of $2,971,448 and net of organization
and offering costs of $36,491) 72,420,153
Unit redemptions (989,657 units) (8,111,670)
Distributions to unit holders:
Investment income - net (267,844)
Principal from investment transactions -
___________
(267,844)
___________
Total increase (decrease) in net assets 69,893,716
Net assets:
At the beginning of the period
(representing 14,981 units outstanding) 142,729
___________
At the end of the period (including
distributable funds applicable to Trust
units of $3,130,708 at May 31, 2000) $70,036,445
===========
Trust units outstanding at the end of
the period 7,515,175
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of ours
(Nike Securities L.P., the Sponsor of the Trust).
Dividend Income Trust -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of ours and an annual administrative fee payable
to us.
Organization and offering costs -
A portion of the Public Offering Price paid by unit holders consisted of
Equity Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing the Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the Trust's portfolio, legal fees and the initial fees and
expenses of the Trustee. Such costs, totaling $36,828 were paid at the end of
the Trust's initial offering period.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 2000 follows:
<TABLE>
<S> <C>
Unrealized appreciation $7,081,213
Unrealized depreciation (1,508,147)
__________
$5,573,066
==========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.350 per unit which will be paid to
us over a five-month period ending on June 20, 2000, plus an initial sales
charge equal to the difference between the deferred sales charge and the total
sales charge of 4.50% of the public offering price which is equivalent to
approximately 4.545% of the net amount invested, exclusive of the deferred
sales charge. The remaining installment of the deferred sales charge is
presented as a liability in the accompanying statement of assets and
liabilities.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of June and
December to unit holders of record on the fifteenth day of June and December.
Capital distributions to unit holders, if any, are made on the last day of
each month to unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $.01 per unit.
Notwithstanding, capital distributions, if any, will be made in December of
each year.
<PAGE>
Selected data per unit of the Trust
outstanding throughout the period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
July 15,
1999, to
May 31, 2000
<S> <C>
Dividend Income Trust $.150
Expenses (.018)
______
Investment income - net .132
Distributions to unit holders:
Investment income - net (.037)
Principal from investment transactions -
Net gain (loss) on investments (.303)
______
Total increase (decrease) in net assets (.208)
Net assets:
Beginning of the period 9.527
______
End of the period $9.319
======
</TABLE>
Dividend Income Trust, Expenses and Investment income - net per unit have been
calculated based on the weighted-average number of units outstanding during
the period (5,614,103 units). Distributions to unit holders of Investment
income - net per unit reflects the Trust's actual distribution of
approximately $.037 per unit to 7,265,444 units on December 31, 1999. The Net
gain (loss) on investments per unit includes the effects of changes arising
from issuance of 8,489,851 additional units during the period at net asset
values which differed from the net asset value per unit of the original 14,981
units ($9.527 per unit) on July 15, 1999.
<PAGE>
FT 353
FINANCIAL SERVICES PORTFOLIO, SERIES 7
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
12,725,463 UNITS
PROSPECTUS
Part One
Dated September 27, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Pharmaceutical Portfolio, Series 7 (the "Trust") is a unit investment
trust consisting of a diversified portfolio containing common stocks of
companies involved in the pharmaceutical industry. At August 16, 2000, each
Unit represented a 1/12,725,463 undivided interest in the principal and net
income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by us, Nike Securities L.P., the sponsor of the
Trust in the secondary market or from the Trustee after having been tendered
for redemption. The profit or loss resulting from the sale of Units will
accrue to us. No proceeds from the sale of Units will be received by the
Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 4.0% of the Public Offering Price (4.167%
of the net amount invested) excluding income and principal cash. At August
16, 2000, the Public Offering Price per Unit was $11.518 (see "Public
Offering" in Part Two). The minimum purchase is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 12,725,463
Fractional Undivided Interest in the Trust per Unit 1/12,725,463
Public Offering Price:
Aggregate Value of Securities in the Portfolio $140,707,662
Aggregate Value of Securities per Unit $11.057
Income and Principal cash in the Portfolio $3,978
Income and Principal cash per Unit $.000
Sales Charge 4.167% (4.00% of Public Offering Price,
excluding income and principal cash) $.461
Public Offering Price per Unit $11.518
Redemption Price and our Repurchase Price per Unit
($.461 less than the Public Offering Price per Unit) $11.057
</TABLE>
Date Trust Established July 15, 1999
Mandatory Termination Date July 15, 2004
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of ours Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0015 per
payable to us Unit outstanding annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable 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 $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: The last day of each June and December.
A Unit holder who owns at least 1,000 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 353,
Pharmaceutical Portfolio, Series 7
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 353, Pharmaceutical Portfolio, Series 7 as of
May 31, 2000, and the related statements of operations and changes in net
assets for the period from the Initial Date of Deposit, July 15, 1999, to May
31, 2000. These financial statements are the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
May 31, 2000, by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 353, Pharmaceutical
Portfolio, Series 7 at May 31, 2000, and the results of its operations and
changes in its net assets for the period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000, in conformity with accounting principles
generally accepted in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 8, 2000
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $123,943,684)
(Note 1) $140,836,437
Dividends receivable 243,718
Cash 722,608
Receivable from investment transactions 95,488
___________
141,898,251
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Liability for deferred sales charge (Note 3) 943,821
Accrued liabilities 82,004
Unit redemptions payable 313,588
__________
1,339,413
__________
Net assets, applicable to 13,453,075 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $123,943,684
Net unrealized appreciation (Note 2) 16,892,753
Distributable funds 5,141,736
Less deferred sales charge paid or
accrued (Note 3) (5,341,877)
Less organization and offering costs
(Note 1) (77,458)
_________
$140,558,838
==========
Net asset value per unit $10.448
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
PORTFOLIO - See notes to portfolio.
May 31, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
150,163 Abbott Laboratories $6,109,832
112,325 American Home Products Corporation 6,051,509
168,269 (1) Amgen Inc. 10,706,115
94,034 Biogen, Inc. 5,124,853
82,603 Bristol-Myers Squibb Company 4,548,369
196,285 Elan Corporation Plc (ADR) 7,814,695
115,213 Genzyme Corporation-General Division 6,545,596
112,311 Glaxo Wellcome Plc (ADR) 6,324,569
65,301 Johnson & Johnson 5,844,440
339,863 (2) Jones Pharma Incorporated 12,383,928
85,609 Eli Lilly and Company 6,516,985
86,522 Merck & Co. Inc. 6,456,704
210,362 Mylan Laboratories Inc. 5,640,436
175,701 (1) Novartis AG (ADR) 6,478,975
165,040 Pfizer Inc. 7,354,678
58,523 Roche Holdings Ltd. (ADR) 6,145,500
118,439 Shering-Plough Corporation 5,729,487
96,225 SmithKline Beechman Plc (ADR) 6,080,265
92,110 Warner-Lambert Company 11,248,934
175,197 Watson Pharmaceuticals, Inc. 7,730,567
_____________
Total investments $140,836,437
============
</TABLE>
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
NOTES TO PORTFOLIO
May 31, 2000
(1) The number of shares reflects the effect of a two for one stock split.
(2) The number of shares reflects the effect of two three for two stock
splits.
See accompanying notes to financial statements.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
STATEMENT OF OPERATIONS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Dividends $1,147,174
Expenses:
Trustee's fees and related expenses (120,767)
Evaluator's fees (24,016)
Supervisory fees (38,407)
Administrative fees (12,839)
____________
Total expenses (196,029)
____________
Investment income - net 951,145
Net gain (loss) on investments:
Net realized gain (loss) 1,354,281
Change in net unrealized appreciation
or depreciation 16,892,753
____________
18,247,034
____________
Net increase (decrease) in net assets resulting
from operations $19,198,179
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
STATEMENT OF CHANGES IN NET ASSETS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Net increase (decrease) in net assets resulting
from operations:
Investment income - net $951,145
Net realized gain (loss) on investments 1,354,281
Change in net unrealized appreciation
or depreciation on investments 16,892,753
____________
19,198,179
Units issued (15,247,458 units, net of deferred
sales charges of $5,336,611 and net of organization
and offering costs of $77,119) 139,433,516
Unit redemptions (1,809,430 units) (17,907,137)
Distributions to unit holders:
Investment income - net (309,084)
Principal from investment transactions -
____________
(309,084)
____________
Total increase (decrease) in net assets 140,415,474
Net assets:
At the beginning of the period
(representing 15,047 units outstanding) 143,364
____________
At the end of the period (including
distributable funds applicable to Trust
units of $5,141,736 at May 31, 2000) $140,558,838
============
Trust units outstanding at the end of
the period 13,453,075
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of ours
(Nike Securities L.P., the Sponsor of the Trust).
Dividend Income Trust -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of ours and an annual administrative fee payable
to us.
Organization and offering costs -
A portion of the Public Offering Price paid by unit holders consisted of
Equity Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing the Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the Trust's portfolio, legal fees and the initial fees and
expenses of the Trustee. Such costs, totaling $77,458 were paid at the end of
the Trust's initial offering period.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 2000 follows:
<TABLE>
<S> <C>
Unrealized appreciation $21,980,805
Unrealized depreciation (5,088,052)
___________
$16,892,753
===========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.350 per unit which will be paid to
us over a five-month period ending on June 20, 2000, plus an initial sales
charge equal to the difference between the deferred sales charge and the total
sales charge of 4.50% of the public offering price which is equivalent to
approximately 4.545% of the net amount invested, exclusive of the deferred
sales charge. The remaining installment of the deferred sales charge is
presented as a liability in the accompanying statement of assets and
liabilities.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of June and
December to unit holders of record on the fifteenth day of June and December.
Capital distributions to unit holders, if any, are made on the last day of
each month to unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $.01 per unit.
Notwithstanding, capital distributions, if any, will be made in December of
each year.
<PAGE>
Selected data per unit of the Trust
outstanding throughout the period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
July 15,
1999, to
May 31, 2000
<S> <C>
Dividend Income Trust $.100
Expenses (.017)
______
Investment income - net .083
Distributions to unit holders:
Investment income - net (.021)
Principal from investment transactions -
Net gain (loss) on investments .858
______
Total increase (decrease) in net assets .920
Net assets:
Beginning of the period 9.528
______
End of the period $10.448
======
</TABLE>
Dividend Income Trust, Expenses and Investment income - net per unit have been
calculated based on the weighted-average number of units outstanding during
the period (11,408,845 units). Distributions to unit holders of Investment
income - net per unit reflects the Trust's actual distribution of
approximately $.021 per unit to 14,422,657 units on December 31, 1999. The
Net gain (loss) on investments per unit includes the effects of changes
arising from issuance of 15,247,458 additional units during the period at net
asset values which differed from the net asset value per unit of the original
15,047 units ($9.528 per unit) on July 15, 1999.
<PAGE>
FT 353
PHARMACEUTICAL PORTFOLIO, SERIES 7
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
6,394,177 UNITS
PROSPECTUS
Part One
Dated September 27, 2000
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Technology Portfolio, Series 10 (the "Trust") is a unit investment trust
consisting of a diversified portfolio containing common stocks of companies
involved in the technology industry. At August 16, 2000, each Unit
represented a 1/6,394,177 undivided interest in the principal and net income
of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by us, Nike Securities L.P., the sponsor of the
Trust in the secondary market or from the Trustee after having been tendered
for redemption. The profit or loss resulting from the sale of Units will
accrue to us. No proceeds from the sale of Units will be received by the
Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 4.0% of the Public Offering Price (4.167%
of the net amount invested) excluding income and principal cash. At August
16, 2000, the Public Offering Price per Unit was $19.404 (see "Public
Offering" in Part Two). The minimum purchase is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans).
Please retain all parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 2000
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units 6,394,177
Fractional Undivided Interest in the Trust per Unit 1/6,394,177
Public Offering Price:
Aggregate Value of Securities in the Portfolio $119,213,936
Aggregate Value of Securities per Unit $18.644
Income and Principal cash (overdraft) in the Portfolio $(108,802)
Income and Principal cash (overdraft) per Unit $(.017)
Sales Charge 4.167% (4.0% of Public Offering Price,
excluding income and principal cash) $.777
Public Offering Price per Unit $19.404
Redemption Price and our Repurchase Price per Unit
($.777 less than the Public Offering Price per Unit) $18.627
</TABLE>
Date Trust Established July 15, 1999
Mandatory Termination Date July 15, 2004
Evaluator's Annual Fee: $.0030 per Unit outstanding. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to Maximum of $.0035 per
an affiliate of ours Unit outstanding annually
Bookkeeping and administrative expenses Maximum of $.0015 per
payable to us Unit outstanding annually
Trustee's Annual Fee: $.0096 per Unit outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable 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 $.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made in
December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: The last day of each June and December.
A Unit holder who owns at least 1,000 Units may request an "In-Kind
Distribution" upon redemption or upon termination of the Trust. See "Rights
of Unit Holders - How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of FT 353,
Technology Portfolio, Series 10
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of FT 353, Technology Portfolio, Series 10 as of May
31, 2000, and the related statements of operations and changes in net assets
for the period from the Initial Date of Deposit, July 15, 1999, to May 31,
2000. These financial statements are the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
May 31, 2000, by correspondence with the Trustee. An audit also includes
assessing the accounting principles used and significant estimates made by the
Sponsor, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of FT 353, Technology Portfolio,
Series 10 at May 31, 2000, and the results of its operations and changes in
its net assets for the period from the Initial Date of Deposit, July 15, 1999,
to May 31, 2000, in conformity with accounting principles generally accepted
in the United States.
ERNST & YOUNG LLP
Chicago, Illinois
September 8, 2000
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, $70,124,609)
(Note 1) $104,435,037
Dividends receivable 6,882
Cash 208,900
Receivable from investment transactions 130,674
___________
104,781,493
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Liability for deferred sales charge (Note 3) 470,570
Accrued liabilities 41,060
Unit redemptions payable 132,175
__________
643,805
__________
Net assets, applicable to 6,713,529 outstanding
units of fractional undivided interest:
Cost of Trust assets (Note 1) $70,124,609
Net unrealized appreciation (Note 2) 34,310,428
Distributable funds 2,438,494
Less deferred sales charge paid or
accrued (Note 3) (2,690,885)
Less organization and offering costs
(Note 1) (44,958)
_________
$104,137,688
============
Net asset value per unit $15.512
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
PORTFOLIO - See notes to portfolio.
May 31, 2000
<TABLE>
<CAPTION>
Number of Market
shares Name of Issuer of Equity Securities value
<C> <S> <C>
Computer & Peripheral
58,617 Dell Computer Corporation $2,527,858
41,117 EMC Corporation 4,782,442
72,337 (1) Gateway Inc. 3,580,682
23,666 Hewlett-Packard Company 2,842,878
18,250 International Business Machines Corporation 1,958,642
71,699 (1) Solectron Corporation 2,370,584
67,986 (1) Sun Microsystems, Inc. 5,209,427
Computer Software & Services
42,208 BMC Software, Inc. 1,857,152
91,213 (1) Check Point Software Technologies Ltd. 17,136,642
70,916 Compuware Corporation 722,492
27,005 Microsoft Corporation 1,689,514
134,021 (1) Oracle Corporation 9,632,759
74,259 SAP AG (ADR) 3,183,855
Data Networking/Communications Equipment
78,477 (1) Cisco Systems, Inc. 4,473,189
67,661 ECI Telecom Limited 1,835,305
33,865 Lucent Technologies Inc. 1,943,004
109,975 (2) Nortel Networks Corporation 5,973,072
37,157 Tellabs, Inc. 2,412,901
Semiconductors & Semiconductor Equipment
55,163 Altera Corporation 4,737,123
66,924 (1) Applied Materials, Inc. 5,588,154
37,697 Intel Corporation 4,697,989
71,105 (1) Maxim Integrated Products, Inc. 4,510,759
42,029 Synopsys, Inc. 1,988,518
68,966 (2) Texas Instruments Incorporated 4,982,794
75,012 (1) Vitesse Semiconductor Corporation 3,797,482
____________
Total investments $104,435,037
============
</TABLE>
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
NOTES TO PORTFOLIO
May 31, 2000
(1) The number of shares reflects the effect of a two for one stock split.
(2) The number of shares reflects the effect of two two for one stock
splits.
See accompanying notes to financial statements.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
STATEMENT OF OPERATIONS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Dividends $57,335
Expenses:
Trustee's fees and related expenses (59,504)
Evaluator's fees (12,101)
Supervisory fees (19,218)
Administrative fees (6,453)
____________
Total expenses (97,276)
____________
Investment income (loss) - net (39,941)
Net gain (loss) on investments:
Net realized gain (loss) 6,228,054
Change in net unrealized appreciation
or depreciation 34,310,428
____________
40,538,482
____________
Net increase (decrease) in net assets resulting
from operations $40,498,541
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
STATEMENT OF CHANGES IN NET ASSETS
Period from the Initial Date of Deposit,
July 15, 1999, to May 31, 2000
<TABLE>
<S> <C>
Net increase (decrease) in net assets resulting
from operations:
Investment income (loss) - net $(39,941)
Net realized gain (loss) on investments 6,228,054
Change in net unrealized appreciation
or depreciation on investments 34,310,428
____________
40,498,541
Units issued (7,673,067 units, net of deferred
sales charges of $2,685,574 and net of organization
and offering costs of $44,617) 79,303,866
Unit redemptions (974,713 units) (15,809,300)
Distributions to unit holders:
Investment income - net -
Principal from investment transactions -
____________
-
____________
Total increase (decrease) in net assets 103,993,107
Net assets:
At the beginning of the period
(representing 15,175 units outstanding) 144,581
____________
At the end of the period (including
distributable funds applicable to Trust
units of $2,438,494 at May 31, 2000) $104,137,688
============
Trust units outstanding at the end of
the period 6,713,529
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by First Trust Advisors L.P. (the Evaluator), an affiliate of ours
(Nike Securities L.P., the Sponsor of the Trust).
Dividend Income Trust -
Dividends on each equity security are recognized on such equity security's ex-
dividend date.
Security cost -
Cost of the equity securities is based on the market value of such securities
on the dates the securities were deposited in the Trust. The cost of
securities sold is determined using the average cost method. Sales of
securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Chase Manhattan Bank, which
is based on $.0096 per annum per unit outstanding based on the largest
aggregate number of units outstanding during the year. In addition, the
Evaluator will receive an annual fee based on $.0030 per unit outstanding.
The Trust also pays recurring financial reporting costs, an annual supervisory
fee payable to an affiliate of ours and an annual administrative fee payable
to us.
Organization and offering costs -
A portion of the Public Offering Price paid by unit holders consisted of
Equity Securities in an amount sufficient to pay for all or a portion of the
costs incurred in establishing the Trust, including costs of preparing the
registration statement, the Trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the Trust's portfolio, legal fees and the initial fees and
expenses of the Trustee. Such costs, totaling $44,958 were paid at the end of
the Trust's initial offering period.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 2000 follows:
<TABLE>
<S> <C>
Unrealized appreciation $39,320,874
Unrealized depreciation (5,010,446)
___________
$34,310,428
===========
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
underlying value of the equity securities on the date of an investor's
purchase, plus a deferred sales charge of $.350 per unit which will be paid to
us over a five-month period ending on June 20, 2000, plus an initial sales
charge equal to the difference between the deferred sales charge and the total
sales charge of 4.50% of the public offering price which is equivalent to
approximately 4.545% of the net amount invested, exclusive of the deferred
sales charge. The remaining installment of the deferred sales charge is
presented as a liability in the accompanying statement of assets and
liabilities.
Distributions to unit holders -
Income distributions to unit holders are made on the last day of June and
December to unit holders of record on the fifteenth day of June and December.
Capital distributions to unit holders, if any, are made on the last day of
each month to unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $.01 per unit.
Notwithstanding, capital distributions, if any, will be made in December of
each year. The Trust made no distributions to unit holders during the period
ended May 31, 2000.
<PAGE>
Selected data per unit of the Trust
outstanding throughout the period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
July 15,
1999, to
May 31, 2000
<S> <C>
Dividend Income Trust $.010
Expenses (.017)
_______
Investment income (loss) - net (.007)
Distributions to unit holders:
Investment income - net -
Principal from investment transactions -
Net gain (loss) on investments 5.991
_______
Total increase (decrease) in net assets
Net assets:
Beginning of the period 9.528
_______
End of the period $15.512
=======
</TABLE>
Dividend Income Trust, Expenses and Investment income (loss) - net per unit
have been calculated based on the weighted-average number of units outstanding
during the period (5,690,851 units). The Net gain (loss) on investments per
unit includes the effects of changes arising from issuance of 7,673,067
additional units during the period at net asset values which differed from the
net asset value per unit of the original 15,175 units ($9.528 per unit) on
July 15, 1999.
<PAGE>
FT 353
TECHNOLOGY PORTFOLIO, SERIES 10
PART ONE
Must be Accompanied by Part Two and Part Three
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
THE FIRST TRUST SPECIAL SITUATIONS TRUST
FT SERIES
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated May 31, 2000 AND PART THREE
The FT Series (formerly known as The First Trust Special Situations
Trust) is a unit investment trust. The FT Series has many separate
series. The Part One which accompanies this Part Two describes one such
series of the FT Series. Each series of the FT Series consists of one or
more portfolios ("Trust(s)") which invest in one or more of the
following: common stock ("Equity Securities"), preferred stock
("Preferred Stocks"), trust preferred securities ("Trust Preferred
Securities"), real estate investment trusts ("REITs") and/or closed-end
funds ("Closed-End Funds"). See Part One and Part Three for a more
complete description of the portfolio for each Trust.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Table of Contents
The FT Series 3
Risk Factors 3
Public Offering 4
Distribution of Units 5
The Sponsor's Profits 6
The Secondary Market 6
How We Purchase Units 6
Expenses and Charges 6
Tax Status 7
Retirement Plans 9
Rights of Unit Holders 9
Income and Capital Distributions 10
Redeeming Your Units 11
Removing Securities from a Trust 12
Amending or Terminating the Indenture 13
Information on the Sponsor, Trustee and Evaluator 13
Other Information 14
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The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of a unit investment trust which we have
named the FT Series or its predecessor, The First Trust Special
Situations Trust. See Part One for a description of the series and
Trusts for which this Part Two Prospectus relates.
Each Trust was created under the laws of the State of New York by a
Trust Agreement (the "Indenture") dated the Initial Date of Deposit.
This agreement, entered into among Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trusts.
How We Created the Trusts.
On the Initial Date of Deposit for each Trust, we deposited a portfolio
or portfolios of one or more of following: Equity Securities, Preferred
Stocks, Trust Preferred Securities, Closed-End Funds and/or REITs,
(collectively, the "Securities") with the Trustee and in turn, the
Trustee delivered documents to us representing our ownership of the
Trusts in the form of units ("Units").
See "The Objective of the Trusts" in Part Three for each Trust for a
specific description of such Trust's objective.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Since the prices of the Securities
will fluctuate daily, the ratio of Securities in the Trusts, on a market
value basis, will also change daily. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trusts. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities.
Risk Factors
Price Volatility. The Trusts may invest in any of the securities set
forth in "The FT Series." The value of a Trust's Units will fluctuate
with changes in the value of these securities. The prices of securities
fluctuate for several reasons including, the type of security, changes
in investor's perceptions of the financial condition of an issuer or the
general condition of the relevant market, or when political or economic
events effecting the issuers occur. In addition, prices may be
particularly sensitive to rising interest rates, as the cost of capital
rises and borrowing costs increase. However, because preferred stock
dividends are fixed (though not guaranteed) and preferred stocks
typically have superior rights to common stocks in dividend
distributions and liquidation, they are generally less volatile than
common stocks.
Because the Trusts are not managed, the Trustee will not sell securities
in response to or in anticipation of market fluctuations, as is common
in managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time,
or that you won't lose money. Units of the Trusts are not deposits of
any bank and are not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Certain of the Securities in certain of the Trusts may be issued by
companies with market capitalizations of less than $1 billion. The share
prices of these small-cap companies are often more volatile than those
of larger companies as a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Equity
Securities will declare dividends in the future or that if declared they
will either remain at current levels or increase over time. In addition,
there is no assurance that the issuers of the Preferred Stocks included
in a Trust will be able to pay dividends at their stated rate in the
future.
Trust Preferred Securities. Certain Trusts may contain trust preferred
securities. Trust preferred securities are limited-life preferred
securities typically issued by corporations, generally in the form of
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interest-bearing notes or preferred securities, or by an affiliated
business trust of a corporation, generally in the form of beneficial
interests in subordinated debentures or similarly structured securities.
Dividend payments of the trust preferred securities generally coincide
with interest payments on the underlying obligations. Trust preferred
securities generally have a yield advantage over traditional preferred
stocks, but unlike preferred stocks, distributions are treated as
interest rather than dividends for federal income tax purposes and
therefore, are not eligible for the dividends-received deduction. Trust
preferred securities are subject to unique risks which include the fact
that dividend payments will only be paid if interest payments on the
underlying obligations are made, which interest payments are dependent
on the financial condition of the issuer and may be deferred for up to
20 consecutive quarters, and that the underlying obligations, and thus
the trust preferred securities, may be prepaid after a stated call date
or as a result of certain tax or regulatory events.
Closed End Funds. Certain Trusts may contain common stocks issued by
closed-end investment companies. The closed-end investment companies in
turn invest in other securities. Shares of closed-end funds frequently
trade at a discount from their net asset value in the secondary market.
This risk is separate and distinct from the risk that the net asset
value of the closed-end fund shares may decrease. The amount of such
discount from net asset value is subject to change from time to time in
response to various factors.
Real Estate Investment Trusts. Certain Trusts may contain securities
issued by Real Estate Investment Trusts ("REITs"). REITs are financial
vehicles that pool investors' capital to purchase or finance real
estate. REITs may concentrate their investments in specific geographic
areas or in specific property types, i.e., hotels, shopping malls,
residential complexes and office buildings. The value of the REITs and
the ability of the REITs to distribute income may be adversely affected
by several factors, including rising interest rates, changes in the
national, state and local economic climate and real estate conditions,
perceptions of prospective tenants of the safety, convenience and
attractiveness of the properties, the ability of the owner to provide
adequate management, maintenance and insurance, the cost of complying
with the Americans with Disabilities Act, increased competition from new
properties, the impact of present or future environmental legislation
and compliance with environmental laws, changes in real estate taxes and
other operating expenses, adverse changes in governmental rules and
fiscal policies, adverse changes in zoning laws, and other factors
beyond the control of the issuers of the REITs.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on certain of the companies represented in the Trusts.
In addition, litigation regarding any of the issuers of the Securities,
or of the industries represented by such issuers may negatively impact
the share prices of these Securities. We cannot predict what impact any
pending or proposed legislation or pending or threatened litigation will
have on the share prices of the Securities.
Foreign Stocks. Certain of the Securities in certain of the Trusts may
be issued by foreign companies, which makes the Trusts subject to more
risks than if they invested solely in domestic common stocks. These
Securities are either directly listed on a U.S. securities exchange or
are in the form of American Depositary Receipts ("ADRs") which are
listed on a U.S. securities exchange. Risks of foreign common stocks
include higher brokerage costs; different accounting standards;
expropriation, nationalization or other adverse political or economic
developments; currency devaluations, blockages or transfer restrictions;
restrictions on foreign investments and exchange of securities;
inadequate financial information; and lack of liquidity of certain
foreign markets.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the per Unit price of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Income and Capital Accounts;
- Dividends receivable on Securities; and
- The total sales charge.
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" in Part One due to various
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factors, including fluctuations in the prices of the Securities and
changes in the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Sales Charges.
The sales charge you will pay will consist of a one-time initial sales
charge as listed in Part One for each Trust. See Part Three "Public
Offering" for additional information for each Trust.
The Value of the Securities.
The Evaluator will appraise the aggregate underlying value of the
Securities in a Trust as of the Evaluation Time on each business day and
will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing bid prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, their value will
generally be based on the current bid prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for valuation). If current bid prices are unavailable, the
valuation is generally determined:
a) On the basis of current bid prices for comparable securities;
b) By appraising the value of the Securities on the bid side of the
market; or
c) By any combination of the above.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
Dealers will receive concessions on the sale of Units in the amounts set
forth in Part Three of this prospectus. We reserve the right to change
the amount of concessions or agency commissions from time to time.
Certain commercial banks may be making Units of the Trusts available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is kept by or given to the banks in the amounts shown
above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable sales charge on Units sold by such persons during such
programs. We make these payments out of our own assets and not out of
Trust assets. These programs will not change the price you pay for your
Units.
Investment Comparisons.
From time to time we may compare the estimated returns of the Trusts
(which may show performance net of the expenses and charges the Trusts
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Page 5
Forbes or Fortune. The investment characteristics of each Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of a Trust's future
performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of a Trust less any reduced sales charge as stated in
Part Three of this prospectus. In maintaining a market for the Units,
any difference between the price at which we purchase Units and the
price at which we sell or redeem them will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units and
continuously offer to purchase Units at prices based on the Redemption
Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and costs incurred in annually updating each Trust's registration
statement. We may discontinue purchases of Units at any time. IF YOU
WISH TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive your proceeds from the
sale no later than if they were redeemed by the Trustee. We may tender
Units that we hold to the Trustee for redemption as any other Units. If
we elect not to purchase Units, the Trustee may sell tendered Units in
the over-the-counter market, if any. However, the amount you will
receive is the same as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of each Trust are set forth under "Summary
of Essential Information" in Part One of this prospectus. If actual
expenses of a Trust exceed the estimate, that Trust will bear the
excess. The Trustee will pay operating expenses of a Trust from the
Income Account of such Trust if funds are available, and then from the
Capital Account. The Income and Capital Accounts are noninterest-bearing
to Unit holders, so the Trustee may earn interest on these funds, thus
benefiting from their use.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. Legal, typesetting, electronic filing and regulatory
filing fees and expenses associated with updating those Trusts'
registration statements yearly are also now chargeable to such Trusts.
Historically, we paid these fees and expenses. First Trust Advisors
L.P., an affiliate of ours, acts as both Portfolio Supervisor and
Evaluator to the Trusts and will receive the fees set forth under
"Summary of Essential Information" in Part One of this prospectus for
providing portfolio supervisory and evaluation services to the Trusts.
In providing portfolio supervisory services, the Portfolio Supervisor
may purchase research services from a number of sources, which may
include underwriters or dealers of the Trusts.
The fees payable to us, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of a Trust outstanding at
any time during the calendar year. These fees may be adjusted for
inflation without Unit holders' approval, but in no case will the annual
fees paid to us or our affiliates for providing a given service to all
unit investment trusts for which we provide such services be more than
the actual cost of providing such services in such year.
For certain Trusts, as set forth in the "Summary of Essential
Information" appearing in Part One for such Trusts, expenses incurred in
establishing such Trusts, including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the
initial audit of the Trust portfolio and the initial fees and expenses
of the Trustee and any other out-of-pocket expenses, have been paid by
the Trust and are being charged off over a period not to exceed five
years from such Trust's Initial Date of Deposit, or over a period not to
exceed the life of the Trust, if shorter than five years.
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In addition to a Trust's operating expenses and those fees described
above, each Trust may also incur the following charges:
- License fees payable by a Trust for the use of certain trademarks and
trade names associated with such Trust, if any;
- All legal and annual auditing expenses of the Trustee according to its
responsibilities under the Indenture;
- The expenses and costs incurred by the Trustee to protect a Trust and
your rights and interests;
- Fees for any extraordinary services the Trustee performed under the
Indenture;
- Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of a Trust;
- Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of a
Trust; and/or
- All taxes and other government charges imposed upon the Securities or
any part of a Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the Trusts. Since the dividend income is unpredictable, we cannot
guarantee that dividends will be sufficient to meet any or all expenses
of the Trusts. If there is not enough cash in the Income or Capital
Account, the Trustee has the power to sell Securities in a Trust to make
cash available to pay these charges which may result in capital gains or
losses to you. See "Tax Status."
Each Trust will be audited annually. We will bear the cost of these
annual audits to the extent the costs exceed $0.0050 per Unit.
Otherwise, each Trust will pay for the audit. You can request a copy of
the audited financial statements from the Trustee.
Tax Status
Federal Tax Status.
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of a 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 state or foreign taxes. As with
any investment, you should consult your own tax professional about your
particular consequences.
Assets of the Trusts.
Each Trust will hold one or more of the following: (i) stock in domestic
and foreign corporations (the "Stocks"), (ii) interests in real estate
investment trusts (the "REIT Shares"), (iii) Trust Preferred Securities
(the "Debt Obligations") and (iv) shares in funds qualifying as
regulated investment companies (the "RIC Shares"). All of the foregoing
assets constitute the "Trust Assets." For purposes of this federal tax
discussion, it is assumed that the Stocks constitute equity, the Debt
Obligations constitute debt and that the RIC Shares and the REIT Shares
constitute qualifying shares in regulated investment companies and real
estate investment trusts, respectively, for federal income tax purposes.
Trust Status.
Except if indicated otherwise in Part Three of this prospectus, each
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 each of the Trust Assets, and as such you will be
considered to have received a pro rata share of income (i.e., interest,
dividends, accruals of original issue discount and market discount, and
capital gains, if any) from each Trust Asset 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.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Trust Assets, 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 Trust Assets from your share of the total proceeds received in
the transaction. You can generally determine your initial tax basis in
each Trust Asset by apportioning the cost of your Units, generally
including sales charges, among each Trust Asset ratably according to its
value on the date you acquire your Units. In certain circumstances,
however, you may have to adjust your tax basis after you acquire your
Page 7
Units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits or in the case of
original issue discount, market discount, premium and accrued interest
with regard to the Debt Obligations, as discussed below).
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 or the date your
Trust purchases a Trust Asset to determine the holding period. The tax
rates for capital gains realized from assets held for one year or less
are generally the same as for ordinary income. The Code may, however,
treat certain capital gains as ordinary income in special situations
(for example, in the case of gain on the Debt Obligations attributable
to market discount). In addition, capital gain received from assets held
for more than one year that is considered "unrecaptured section 1250
gain" (which may be the case, for example, with some capital gains
attributable to the REIT Shares) is taxed at a maximum stated tax rate
of 25%.
Dividends from RIC Shares and REIT Shares.
Some dividends on the REIT Shares or the RIC Shares may qualify as
"capital gain dividends," taxable to you as long-term capital gains. If
you hold a Unit for six months or less or if your Trust holds a RIC
Share or REIT Share for six months or less, any loss incurred by you
related to the disposition of such RIC Share or REIT Share will be
treated as a long-term capital loss to the extent of any long-term
capital gain distributions received (or deemed to have been received)
with respect to such RIC Share or REIT Share. Distributions of income or
capital gains declared on the REIT Shares or the RIC Shares in October,
November or December will be deemed to have been paid to you on December
31 of the year they are declared, even when paid by the REIT or the RIC
during the following January.
Discount, Accrued Interest and Premium on Debt Obligations.
Some Debt Obligations may have been sold with original issue discount.
This generally means that the Debt Obligations were originally issued at
a price below their face (or par) value. Original issue discount accrues
on a daily basis and generally is treated as interest income for federal
income tax purposes. The basis of your Unit and of each Debt Obligation
which was issued with original issue discount must be increased as
original issue discount accrues.
Some Debt Obligations may have been purchased by you or your Trust at a
market discount. Market discount is generally the excess of the stated
redemption price at maturity for the Debt Obligation over the purchase
price of the Debt Obligation (not including unaccrued original issue
discount). Market discount can arise based on the price your Trust pays
for a Debt Obligation or on the price you pay for your Units. Market
discount is taxed as ordinary income. You will recognize this income
when your Trust receives principal payments on the Debt Obligation, when
the Debt Obligation is sold or redeemed, or when you sell or redeem your
Units. Alternatively, you may elect to include market discount in
taxable income as it accrues. Whether or not you make this election will
affect how you calculate your basis and the timing of certain interest
expense deductions.
Alternatively, some Debt Obligations may have been purchased by you or
your Trust at a premium. Generally, if the tax basis of your pro rata
portion of any Debt Obligation exceeds the amount payable at maturity,
such excess is considered premium. You may elect to amortize premium. If
you make this election, you may reduce your interest income received on
the Debt Obligation by the amount of the premium that is amortized and
your tax basis will be reduced.
If the price of your Units included accrued interest on a Debt
Obligation, you must include the accrued interest in your tax basis in
that Debt Obligation. When your Trust receives this accrued interest,
you must treat it as a return of capital and reduce your tax basis in
the Debt Obligation.
This discussion provides only the general rules with respect to the tax
treatment of original issue discount, market discount and premium. The
rules, however, are complex and special rules apply in certain
circumstances. For example, the accrual of market discount or premium
Page 8
may differ from the discussion set forth above in the case of Debt
Obligations that were issued with original issue discount.
Dividends Received Deduction.
A corporation that owns Units will generally not be entitled to the
dividends received deduction with respect to many dividends received by
your Trust, because the dividends received deduction is not available
for dividends from most foreign corporations or from REITs.
Distributions on a RIC Share are eligible for the dividends received
deduction only to the extent that the dividends received by the Unit
owner are attributable to dividends received by the RIC itself from
certain domestic corporations and are designated by the RIC as being
eligible for the dividends received deduction. Finally, because the Debt
Obligations are treated as debt (not equity) for federal income tax
purposes, distributions from the Debt Obligations are not eligible for
the dividends received deduction.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Trust Assets when you redeem your Units or at your Trust's termination.
By electing to receive an In-Kind Distribution, you will receive an
undivided interest in Trust Assets plus, possibly, cash. You will not
recognize gain or loss if you only receive Trust Assets in exchange for
your pro rata portion of the Trust Assets held by your Trust. However,
if you also receive cash in exchange for a fractional portion of a Trust
Asset, 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 portion of the Trust Asset.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of your 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 your Trust to the same extent as if you directly
paid the expense. You may be required to treat some or all of the
expenses of your Trust as miscellaneous itemized deductions. However,
individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Interest and dividend payments on your Trust Assets of foreign companies
that are paid to your Trust may be subject to foreign withholding taxes.
Any income withheld will still be treated as income to you. Under the
grantor trust rules, you are considered to have paid directly your share
of foreign taxes. Therefore, for U.S. tax purposes, you may be entitled
to a foreign tax credit or deduction for those foreign taxes.
If you are a foreign investor (i.e., an investor other than a U.S.
citizen or resident or a U.S. corporation, partnership, estate or
trust), you will not be subject to U.S. federal income taxes, including
withholding taxes, on some of the income from your Trust or on any gain
from the sale or redemption of your Units, provided that certain
conditions are met. You should consult your tax advisor with respect to
the conditions you must meet in order to be exempt for U.S. tax purposes.
Under the existing income tax laws of the State and City of New York,
your Trust will not be taxed as a corporation, and the income of your
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 Trusts for:
- Individual Retirement Accounts;
- Keogh Plans;
- Pension funds; and
- Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
advisor. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
Page 9
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- A written initial transaction statement containing a description of
the Trust;
- A list of the number of Units issued or transferred;
- Your name, address and Taxpayer Identification Number ("TIN");
- A notation of any liens or restrictions of the issuer and any adverse
claims; and
- The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
- A summary of transactions in your Trust for the year;
- A list of any Securities sold during the year and the Securities held
at the end of that year by your Trust;
- The Redemption Price per Unit, computed on the 31st day of December of
such year (or the last business day before); and
- Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account
of such Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information" in Part One of this prospectus. No income distribution will
be paid if accrued expenses of a Trust exceed amounts in the Income
Account on the Income Distribution Dates. Distribution amounts will vary
with changes in a Trust's fees and expenses, in dividends received and
with the sale of Securities. The Trustee will distribute amounts in the
Capital Account, net of amounts designated to meet redemptions or pay
expenses on the last day of each month to Unit holders of record on the
fifteenth day of each month provided the amount equals at least $1.00
per 100 Units ($1.00 per 1,000 Units if the Initial Public Offering
Price was approximately $1.00 per Unit). If the Trustee does not have
your TIN, it is required to withhold a certain percentage of your
distribution and deliver such amount to the Internal Revenue Service
Page 10
("IRS"). You may recover this amount by giving your TIN to the Trustee,
or when you file a tax return. However, you should check your statements
to make sure the Trustee has your TIN to avoid this "back-up withholding."
Within a reasonable time after a Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in your
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within a
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Distribution Reinvestment Option. If applicable, you may elect to have
each distribution of income and/or capital reinvested into additional
Units of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. There is no sales charge on Units acquired through the
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.See Part Three of
this prospectus to determine whether the distribution reinvestment
option is available for a particular Trust.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Three business days after the
day you tender your Units (the "Date of Tender") you will receive cash
in an amount for each Unit equal to the Redemption Price per Unit
calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if it does not have your TIN, as
generally discussed under "Income and Capital Distributions."
For certain Trusts, if you tender at least the minimum number of Units
specified in "Summary of Essential Information" in Part One of this
prospectus, rather than receiving cash, you may elect to receive an In-
Kind Distribution in an amount equal to the Redemption Price per Unit by
making this request in writing to the Trustee at the time of tender.
However, no In-Kind Distribution requests submitted during the nine
business days prior to a Trust's Mandatory Termination Date will be
honored. Where possible, the Trustee will make an In-Kind Distribution
by distributing each of the Securities in book-entry form to your bank
or broker/dealer account at the Depository Trust Company. The Trustee
will subtract any customary transfer and registration charges from your
In-Kind Distribution. As a tendering Unit holder, you will receive your
pro rata number of whole shares of the Securities that make up the
portfolio, and cash from the Capital Account equal to the fractional
shares to which you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of a Trust will be
reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- If the NYSE is closed (other than customary weekend and holiday
closings);
- If the SEC determines that trading on the NYSE is restricted or that
Page 11
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of a Trust not designated to
purchase Securities;
2. the aggregate value of the Securities held in a Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of a Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of a Trust, if any;
4. cash held for distribution to Unit holders of record of a Trust as of
the business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by a Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- The issuer of the Security defaults in the payment of a declared
dividend;
- Any action or proceeding prevents the payment of dividends;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- The issuer has defaulted on the payment of any other of its
outstanding obligations;
- There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
A Trust may not acquire any securities or other property other than the
Securities. The Trustee, on behalf of the Trusts, will reject any offer
for new or exchanged securities or property in exchange for a Security,
such as those acquired in a merger or other transaction. If such
exchanged securities or property are nevertheless acquired by a Trust,
at our instruction, they will either be sold or held in such Trust. In
making the determination as to whether to sell or hold the exchanged
securities or property we may get advice from each Portfolio Supervisor.
Any proceeds received from the sale of Securities, exchanged securities
or property will be credited to the Capital Account for distribution to
Unit holders or to meet redemption requests. The Trustee may retain and
pay us or an affiliate of ours to act as agent for a Trust to facilitate
selling Securities, exchanged securities or property from the Trusts. If
we or our affiliate act in this capacity, we will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may sell Securities designated by us or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of a Trust may be
changed. To get the best price for a Trust we may specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be
sold. We may consider sales of units of unit investment trusts which we
sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute a Trust's portfolio transactions,
or when acting as agent for a Trust in acquiring or selling Securities
on behalf of the Trusts.
Page 12
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information" in Part One for each Trust. The Trusts may be terminated
earlier:
- Upon the consent of 100% of the Unit holders of a Trust;
- If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to all Unit
holders which will specify how you should tender your certificates, if
any, to the Trustee. For various reasons, a Trust may be reduced below
the Discretionary Liquidation Amount and could therefore be terminated
before the Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you qualify for an In-Kind Distribution, 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 (reduced by customary
transfer and registration charges) rather than the typical cash
distribution. See "Tax Status" for additional information. You must
notify the Trustee at least ten business days prior to the Mandatory
Termination Date if you elect this In-Kind Distribution option. If you
do not elect to participate in the In-Kind Distribution option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts, within a
reasonable time after such Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the Trusts any
accrued costs, expenses, advances or indemnities provided for by the
Indenture, including estimated compensation of the Trustee and costs of
liquidation and any amounts required as a reserve to pay any taxes or
other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $27 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1999, the total partners' capital of
Nike Securities L.P. was $19,881,035 (audited).
Page 13
This information refers only to us and not to the Trusts or to any
series of the Trusts or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trusts have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trusts.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC;
- Terminate the Indenture and liquidate the Trusts; or
- Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments,
appearing in each Part One of this prospectus, as set forth in their
report. We've included the Trusts' statements of net assets, including
the schedules of investments, in the prospectus and elsewhere in the
registration statement in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
Page 14
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Page 15
FIRST TRUST (registered trademark)
THE FIRST TRUST SPECIAL SITUATIONS TRUST
FT SERIES
Prospectus
Part Two
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- Securities Act of 1933 (set forth in Part One for each Trust) and
- Investment Company Act of 1940 (file no. 811-05903)
Information about the Trusts, including their Codes of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at 1-202-942-8090.
Information about the Trusts is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: [email protected]
May 31, 2000
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 16
Bandwidth Solutions Portfolio Series
FT Series
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated September 29, 2000 PART ONE AND PART TWO
Each Trust contains a diversified portfolio of common stocks
("Securities") issued by companies in the industry sector or investment
focus for which the Trust is named. The objective of each Trust is to
provide above-average capital appreciation.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Portfolio
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
herein and in Part Two of this prospectus for a discussion of the risks
of investing in the Trusts.
Risk Factors
Bandwidth Industry. Because more than 25% of each Trust is invested in
companies which are focusing on bandwidth technologies, each Trust is
considered to be concentrated in the bandwidth technology industry. A
portfolio concentrated in a single industry may present more risks than
a portfolio which is broadly diversified over several industries. The
market for high technology communications products and services is
characterized by rapidly changing technology, rapid product obsolescence
or loss of patent protection, cyclical market patterns, evolving
industry standards and frequent new product introductions. Certain
communications/bandwidth companies are subject to substantial
governmental regulation, which among other things, regulates permitted
rates of return and the kinds of services that a company may offer. The
communications industry has experienced substantial deregulation in
recent years. Deregulation may lead to fierce competition for market
share and can have a negative impact on certain companies. Competitive
pressures are intense and communications stocks can experience rapid
volatility.
Public Offering
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you may combine same-day purchases of
Units of the Trusts and units of other similarly structured equity unit
trusts for which we act as Principal Underwriter and which are currently
in the initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or your child under 21 years of age
to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the party 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, dealers and their affiliates, and vendors providing services
to us.
- Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
Page 2
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-
law, and trustees, custodians or fiduciaries for the benefit of such
persons).
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, your Units
will only be assessed that portion of the sales charge retained by the
Sponsor.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 65% of the then current
maximum sales charge.
Income and Capital Distributions
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. 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.
Other Information
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 3
FIRST TRUST(registered trademark)
Bandwidth Solutions Portfolio Series
FT Series
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 4
First Trust (registered trademark)
Bandwidth Solutions Portfolio Series
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Trusts not found in the prospectus. This Information
Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing
in a Trust. This Information Supplement should be read in conjunction
with the prospectus for the Trust in which an investor is considering
investing ("prospectus").
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentration
Bandwidth 2
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
Page 1
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Bandwidth. An investment in Units of the Trusts should be made with an
understanding of the problems and risks such an investment may entail.
The market for high-technology communications products and services is
characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Securities depends in substantial part on the timely and successful
introduction of new products and services. An unexpected change in one
or more of the technologies affecting an issuer's products or in the
market for products based on a particular technology could have a
material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be
able to respond in a timely manner to compete in the rapidly developing
marketplace.
The communications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the communications industry, promoting vigorous economic
competition and resulting in the rapid development of new communications
technologies. The products and services of communications companies may
be subject to rapid obsolescence. These factors could affect the value
of a Trust's Units. For example, while telephone companies in the United
States are subject to both state and federal regulations affecting
permitted rates of returns and the kinds of services that may be
offered, the prohibition against phone companies delivering video
services has been lifted. This creates competition between phone
companies and cable operators and encourages phone companies to
modernize their communications infrastructure. Certain types of
companies represented in a Trust's portfolio are engaged in fierce
competition for a share of the market of their products. As a result,
competitive pressures are intense and the stocks are subject to rapid
price volatility.
Many communications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology.
Page 2
Energy Portfolio Series
Energy Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated September 29, 2000 PART ONE AND PART TWO
Each Trust contains a diversified portfolio of common stocks
("Securities") issued by companies in the industry sector or investment
focus for which the Trust is named. The objective of each Trust is to
provide above-average capital appreciation.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Portfolio
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
herein and in Part Two of this prospectus for a discussion of the risks
of investing in the Trusts.
Risk Factors
Energy Industry. Because more than 25% of each Trust is invested in
companies that explore for, produce, refine, distribute or sell
petroleum or gas products, or provide parts or services to petroleum or
gas companies, these Trusts are considered to be concentrated in the
energy industry. A portfolio concentrated in a single industry may
present more risks than a portfolio which is broadly diversified over
several industries. General problems of the petroleum and gas products
industry include volatile fluctuations in price and supply of energy
fuels, international politics, reduced demand as a result of increases
in energy efficiency and energy conservation, the success of exploration
projects, clean-up and litigation costs relating to oil spills and
environmental damage, and tax and other regulatory policies of various
governments. Oil production and refining companies are subject to
extensive federal, state and local environmental laws and regulations
regarding air emissions and the disposal of hazardous materials. In
addition, declines in U.S. and Russian crude oil production will likely
lead to a greater world dependence on oil from OPEC nations which may
result in more volatile oil prices.
Public Offering
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you may combine same-day purchases of
Units of the Trusts and units of other similarly structured equity unit
trusts for which we act as Principal Underwriter and which are currently
in the initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or your child under 21 years of age
to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the party 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, dealers and their affiliates, and vendors providing services
to us.
- Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
Page 2
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-
law, and trustees, custodians or fiduciaries for the benefit of such
persons).
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, your Units
will only be assessed that portion of the sales charge retained by the
Sponsor.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 65% of the then current
maximum sales charge.
Income and Capital Distributions
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. 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.
Other Information
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 3
FIRST TRUST (registered trademark)
Energy Portfolio Series
Energy Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 4
First Trust (registered trademark)
Energy Portfolio Series
Energy Growth Trust Series
The FT Series
The First Trust(registered trademark) Special Situations Trust
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Trusts not found in the prospectus. This Information
Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing
in a Trust. This Information Supplement should be read in conjunction
with the prospectus for the Trust in which an investor is considering
investing ("prospectus").
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentration
Energy 2
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
Page 1
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Energy. An investment in Units of the Trusts should be made with an
understanding of the problems and risks such an investment may entail.
The Trusts invest in Securities of companies involved in the energy
industry. The business activities of companies held in the Trusts may
include: production, generation, transmission, marketing, control, or
measurement of gas and oil; the provision of component parts or services
to companies engaged in the above activities; energy research or
experimentation; and environmental activities related to the solution of
energy problems, such as energy conservation and pollution control.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
conservation, the success of exploration projects, and tax and other
regulatory policies of various governments. As a result of the
foregoing, the Securities in the Trusts may be subject to rapid price
volatility. The Sponsor is unable to predict what impact the foregoing
factors will have on the Securities during the life of the Trusts.
According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in U.S. environmental policies and
the continued decline in U.S. production of crude oil. Possible effects
of these factors may be increased U.S. and world dependence on oil from
the Organization of Petroleum Exporting Countries ("OPEC") and highly
uncertain and potentially more volatile oil prices. Factors which the
Sponsor believes may increase the profitability of oil and petroleum
operations include increasing demand for oil and petroleum products as a
result of the continued increases in annual miles driven and the
improvement in refinery operating margins caused by increases in average
domestic refinery utilization rates. The existence of surplus crude oil
production capacity and the willingness to adjust production levels are
the two principal requirements for stable crude oil markets. Without
excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
Page 2
contributes to market uncertainty. The restoration of a large portion of
Kuwait and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand.
Formerly, OPEC members attempted to exercise control over production
levels in each country through a system of mandatory production quotas.
Because of the 1990-1991 crisis in the Middle East, the mandatory system
has since been replaced with a voluntary system. Production under the
new system has had to be curtailed on at least one occasion as a result
of weak prices, even in the absence of supplies from Kuwait and Iraq.
The pressure to deviate from mandatory quotas, if they are reimposed, is
likely to be substantial and could lead to a weakening of prices. In the
longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers to significantly affect production, the concomitant volatility
of crude oil prices, increasing public and governmental concern over air
emissions, waste product disposal, fuel quality and the environmental
effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in each of the Trusts.
Page 3
Financial Services Portfolio Series
Financial Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated September 29, 2000 PART ONE AND PART TWO
Each Trust contains a diversified portfolio of common stocks
("Securities") issued by companies in the industry sector or investment
focus for which the Trust is named. The objective of each Trust is to
provide above-average capital appreciation.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Portfolio
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
herein and in Part Two of this prospectus for a discussion of the risks
of investing in the Trusts.
Risk Factors
Financial Services Industry. Because more than 25% of each Trust is
invested in financial services companies, which includes banks and
thrifts, financial services and insurance companies, and investment
firms, these Trusts are considered to be concentrated in the financial
services industry. A portfolio concentrated in a single industry may
present more risks than a portfolio which is broadly diversified over
several industries. Banks, thrifts and their holding companies are
especially subject to the adverse effects of economic recession;
volatile interest rates; portfolio concentrations in geographic markets
and in commercial and residential real estate loans; and competition
from new entrants in their fields of business. Although recently-enacted
legislation repealed most of the barriers which separated the banking,
insurance and securities industries, these industries are still
extensively regulated at both the federal and state level and may be
adversely affected by increased regulations.
Banks and thrifts face increased competition from nontraditional lending
sources as regulatory changes, such as the recently enacted financial-
services overhaul legislation, permit new entrants to offer various
financial products. Technological advances such as the Internet allow
these nontraditional lending sources to cut overhead and permit the more
efficient use of customer data.
Brokerage firms, broker/dealers, investment banks, finance companies and
mutual fund companies are also financial services providers. These
companies compete with banks and thrifts to provide traditional
financial service products, in addition to their traditional services,
such as brokerage and investment advice. In addition, all financial
service companies face shrinking profit margins due to new competitors,
the cost of new technology and the pressure to compete globally.
Companies involved in the insurance industry are engaged in
underwriting, selling, distributing or placing of property and casualty,
life or health insurance. Insurance company profits are affected by many
factors, including interest rate movements, the imposition of premium
rate caps, competition and pressure to compete globally. Property and
casualty insurance profits may also be affected by weather catastrophes
and other disasters. Life and health insurance profits may be affected
by mortality rates. Already extensively regulated, insurance companies'
profits may also be adversely affected by increased government
regulations or tax law changes.
Public Offering
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ _____________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
Page 2
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you may combine same-day purchases of
Units of the Trusts and units of other similarly structured equity unit
trusts for which we act as Principal Underwriter and which are currently
in the initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or your child under 21 years of age
to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the party 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, dealers and their affiliates, and vendors providing services
to us.
- Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-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, your Units
will only be assessed that portion of the sales charge retained by the
Sponsor.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 65% of the then current
maximum sales charge.
Income and Capital Distributions
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. 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.
Other Information
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 3
FIRST TRUST(registered trademark)
Financial Services Portfolio Series
Financial Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 4
First Trust (registered trademark)
Financial Services Portfolio Series
Financial Growth Trust Series
The FT Series
The First Trust(registered trademark) Special Situations Trust
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Trusts not found in the prospectus. This Information
Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing
in a Trust. This Information Supplement should be read in conjunction
with the prospectus for the Trust in which an investor is considering
investing ("prospectus").
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentration
Financial Services 2
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
Page 1
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Financial Services. An investment in Units of the Trusts should be made
with an understanding of the problems and risks inherent in the bank and
financial services sector in general.
Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid
by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision of
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,
Page 2
Recovery and Enforcement Act; enacted in August 1989, the Federal
Deposit Insurance Corporation Improvement Act of 1991, the Resolution
Trust Corporation Refinancing, Restructuring, and Improvement Act of
1991 and the regulations promulgated under these laws. Many of the
regulations promulgated pursuant to these laws have only recently been
finalized and their impact on the business, financial condition and
prospects of the Securities in the Trusts' portfolios cannot be
predicted with certainty. The recently enacted Gramm-Leach-Bliley Act
repealed most of the barriers set up by the 1933 Glass-Steagall Act
which separated the banking, insurance and securities industries. Now
banks, insurance companies and securities firms can merge to form one-
stop financial conglomerates marketing a wide range of financial service
products to investors. This legislation will likely result in increased
merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal
thrifts to branch on an interstate basis have been initially successful
through promulgation of regulations, and legislation to liberalize
interstate banking has recently been signed into law. Under the
legislation, banks will be able to purchase or establish subsidiary
banks in any state, one year after the legislation's enactment. Since
mid-1997, banks have been allowed to turn existing banks into branches.
Consolidation is likely to continue. The Securities and Exchange
Commission and the Financial Accounting Standards Board require the
expanded use of market value accounting by banks and have imposed rules
requiring market accounting for investment securities held in trading
accounts or available for sale. Adoption of additional such rules may
result in increased volatility in the reported health of the industry,
and mandated regulatory intervention to correct such problems.
Additional legislative and regulatory changes may be forthcoming. For
example, the bank regulatory authorities have proposed substantial
changes to the Community Reinvestment Act and fair lending laws, rules
and regulations, and there can be no certainty as to the effect, if any,
that such changes would have on the Securities in the Trusts'
portfolios. In addition, from time to time the deposit insurance system
is reviewed by Congress and federal regulators, and proposed reforms of
that system could, among other things, further restrict the ways in
which deposited moneys can be used by banks or reduce the dollar amount
or number of deposits insured for any depositor. Such reforms could
reduce profitability as investment opportunities available to bank
institutions become more limited and as consumers look for savings
vehicles other than bank deposits. Banks and thrifts face significant
competition from other financial institutions such as mutual funds,
credit unions, mortgage banking companies and insurance companies, and
increased competition may result from legislative broadening of regional
and national interstate banking powers as has been recently enacted.
Among other benefits, the legislation allows banks and bank holding
companies to acquire across previously prohibited state lines and to
consolidate their various bank subsidiaries into one unit. The Sponsor
makes no prediction as to what, if any, manner of bank and thrift
regulatory actions might ultimately be adopted or what ultimate effect
such actions might have on the Trusts' portfolios.
The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than 5%
of the outstanding shares of any class of voting securities of a bank or
bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a
bank, or (4) merging or consolidating with another bank holding company,
without first obtaining Federal Reserve Board ("FRB") approval. In
considering an application with respect to any such transaction, the FRB
is required to consider a variety of factors, including the potential
anti-competitive effects of the transaction, the financial condition and
future prospects of the combining and resulting institutions, the
managerial resources of the resulting institution, the convenience and
needs of the communities the combined organization would serve, the
record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the
prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,
including applications for approval of mergers and acquisitions. The
Sponsor makes no prediction as to the effect, if any, such laws will
have on the Securities or whether such approvals, if necessary, will be
obtained.
Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
Page 3
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations; and
(vii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.
The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulation. The Sponsor is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.
All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to
comply with these laws and regulations would cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.
Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini-Superfunds ("Environmental Clean-up
Laws or "ECLs") establish a mechanism to pay for clean-up of waste sites
if PRP's fail to do so, and to assign liability to PRP's. The extent of
liability to be allocated to a PRP is dependent on a variety of factors.
The extent of clean-up necessary and the assignment of liability has not
been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.
While current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
Page 4
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.
Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as the stock
prices, of these companies. Furthermore, there can be no assurance that
the issuers of the Securities included in the Financial Services
Portfolios will be able to respond in a timely manner to compete in the
rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
Page 5
Pharmaceutical Portfolio Series
Pharmaceutical Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated September 29, 2000 PART ONE AND PART TWO
Each Trust contains a diversified portfolio of common stocks
("Securities") issued by companies in the industry sector or investment
focus for which the Trust is named. The objective of each Trust is to
provide above-average capital appreciation.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Portfolio
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
herein and in Part Two of this prospectus for a discussion of the risks
of investing in the Trusts.
Risk Factors
Pharmaceutical Industry. Because more than 25% of each Trust is invested
in pharmaceutical companies, these Trusts are considered to be
concentrated in the pharmaceutical industry. A portfolio concentrated in
a single industry may present more risks than a portfolio which is
broadly diversified over several industries. Pharmaceutical companies
are subject to changing government regulation, including price controls,
national health insurance, managed care regulation and tax incentives or
penalties related to medical insurance premiums, which could have a
negative effect on the price and availability of their products and
services. In addition, such companies face increasing competition from
generic drug sales, the termination of their patent protection for
certain drugs and technological advances which render their products or
services obsolete. The research and development costs required to bring
a drug to market are substantial and may include a lengthy review by the
government, with no guarantee that the product will ever go to market or
show a profit. In addition, the potential for an increased amount of
required disclosure of proprietary scientific information could
negatively impact the competitive position of these companies. Many of
these companies may not offer certain drugs or products for several
years, and as a result, may have significant losses of revenue and
earnings.
Public Offering
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you may combine same-day purchases of
Units of the Trusts and units of other similarly structured equity unit
trusts for which we act as Principal Underwriter and which are currently
in the initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or your child under 21 years of age
to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the party 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, dealers and their affiliates, and vendors providing services
to us.
Page 2
- Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-
law, and trustees, custodians or fiduciaries for the benefit of such
persons).
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, your Units
will only be assessed that portion of the sales charge retained by the
Sponsor.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 65% of the then current
maximum sales charge.
Income and Capital Distributions
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. 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.
Other Information
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 3
FIRST TRUST(registered trademark)
Pharmaceutical Portfolio Series
Pharmaceutical Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 4
First Trust (registered trademark)
Pharmaceutical Portfolio Series
Pharmaceutical Growth Trust Series
The FT Series
The First Trust(registered trademark) Special Situations Trust
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Trusts not found in the prospectus. This Information
Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing
in a Trust. This Information Supplement should be read in conjunction
with the prospectus for the Trust in which an investor is considering
investing ("prospectus").
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentration
Pharmaceutical 2
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
Page 1
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Pharmaceutical. An investment in Units of the Trusts should be made with
an understanding of the problems and risks such an investment may
entail. Companies involved in advanced medical devices and instruments,
drugs and biotech have potential risks unique to their sector of the
healthcare field. These companies are subject to governmental regulation
of their products and services, a factor which could have a significant
and possibly unfavorable effect on the price and availability of such
products or services. Furthermore, such companies face the risk of
increasing competition from new products or services, generic drug
sales, the termination of patent protection for drug or medical supply
products and the risk that technological advances will render their
products obsolete. The research and development costs of bringing a drug
to market are substantial, and include lengthy governmental review
processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and may not offer certain
products for several years. Such companies may also have persistent
losses during a new product's transition from development to production,
and revenue patterns may be erratic.
As the population of the United States ages, the companies involved in
the healthcare field will continue to search for and develop new drugs,
medical products and medical services through advanced technologies and
diagnostics. On a worldwide basis, such companies are involved in the
development and distributions of drugs, vaccines, medical products and
medical services. These activities may make the
biotechnology/pharmaceuticals sector very attractive for investors
seeking the potential for growth in their investment portfolio. However,
there are no assurances that the Trusts' objectives will be met.
Legislative proposals concerning healthcare are proposed in Congress
from time to time. These proposals span a wide range of topics,
including cost and price controls (which might include a freeze on the
prices of prescription drugs). The Sponsor is unable to predict the
effect of any of these proposals, if enacted, on the issuers of
Securities in the Trusts.
Page 2
Technology Portfolio Series
Technology Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated September 29, 2000 PART ONE AND PART TWO
Each Trust contains a diversified portfolio of common stocks
("Securities") issued by companies in the industry sector or investment
focus for which the Trust is named. The objective of each Trust is to
provide above-average capital appreciation.
All Parts of the Prospectus Should be Retained for Future Reference.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
1-800-621-9533
Page 1
Portfolio
Objectives.
The objective of each Trust is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely. The companies
selected for the Trusts have been researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the Sponsor's research analysts.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trusts will be achieved. See "Risk Factors"
herein and in Part Two of this prospectus for a discussion of the risks
of investing in the Trusts.
Risk Factors
Technology Industry. Because more than 25% of each Trust is invested in
technology companies, these Trusts are considered to be concentrated in
the technology industry. A portfolio concentrated in a single industry
may present more risks than a portfolio which is broadly diversified
over several industries. Technology companies are generally subject to
the risks of rapidly changing technologies; short product life cycles;
fierce competition; aggressive pricing and reduced profit margins; the
loss of patent, copyright and trademark protections; cyclical market
patterns; evolving industry standards and frequent new product
introductions. Technology companies may be smaller and less experienced
companies, with limited product lines, markets or financial resources
and fewer experienced management or marketing personnel. Technology
company stocks, especially those which are Internet-related, have
experienced extreme price and volume fluctuations that are often
unrelated to their operating performance. Also, the stocks of many
Internet companies have exceptionally high price-to-earnings ratios with
little or no earnings histories.
Public Offering
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_________________ ____________
$50 but less than $100 4.25%
$100 but less than $250 4.00%
$250 but less than $500 3.50%
$500 or more 2.50%
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you may combine same-day purchases of
Units of the Trusts and units of other similarly structured equity unit
trusts for which we act as Principal Underwriter and which are currently
in the initial offering period. In addition, we will consider Units you
purchase in the name of your spouse or your child under 21 years of age
to be purchases by you for determining the reduced sales charge. The
reduced sales charges will also apply to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
You must inform your dealer of any combined purchases before the sale in
order to be eligible for the reduced sales charge. Any reduced sales is
the responsibility of the party 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, dealers and their affiliates, and vendors providing services
to us.
- Immediate family members of the above (spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
Page 2
in-law, sons-in-law, daughters-in-law, brothers-in-law and sisters-in-
law, and trustees, custodians or fiduciaries for the benefit of such
persons).
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, your Units
will only be assessed that portion of the sales charge retained by the
Sponsor.
Distribution of Units
We intend to qualify Units of the Trusts for sale in a number of states.
Units will be sold at the current Public Offering Price.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of 65% of the then current
maximum sales charge.
Income and Capital Distributions
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. 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.
Other Information
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
Page 3
FIRST TRUST(registered trademark)
Technology Portfolio Series
Technology Growth Trust Series
FT Series
The First Trust(registered trademark) Special Situations Trust
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 4
First Trust (registered trademark)
Technology Portfolio Series
Technology Growth Trust Series
The FT Series
The First Trust(registered trademark) Special Situations Trust
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of unit investment trusts ("Trusts")
contained in the Trusts not found in the prospectus. This Information
Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing
in a Trust. This Information Supplement should be read in conjunction
with the prospectus for the Trust in which an investor is considering
investing ("prospectus").
This Information Supplement is dated September 29, 2000. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
Dividends 1
Foreign Issuers 1
Concentration
Technology 2
Risk Factors
Securities. An investment in Units should be made with an understanding
of the risks which an investment in common stocks entails, including the
risk that the financial condition of the issuers of the Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors.
Dividends. Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Common stocks do not represent an obligation of
the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities.
The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer
to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy.
Foreign Issuers. Since certain of the Securities included in the Trusts
consist of securities of foreign issuers, an investment in the Trusts
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in the securities
of domestic issuers. These investment risks include future political or
governmental restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities, the
possibility that the financial condition of the issuers of the
Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute
directly to a decrease in the value of the Securities and thus in the
value of the Units), the limited liquidity and relatively small market
capitalization of the relevant securities market, expropriation or
confiscatory taxation, economic uncertainties and foreign currency
devaluations and fluctuations. In addition, for foreign issuers that are
not subject to the reporting requirements of the Securities Exchange Act
of 1934, there may be less publicly available information than is
Page 1
available from a domestic issuer. Also, foreign issuers are not
necessarily subject to uniform accounting, auditing and financial
reporting standards, practices and requirements comparable to those
applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of
comparable domestic issuers. In addition, fixed brokerage commissions
and other transaction costs on foreign securities exchanges are
generally higher than in the United States and there is generally less
government supervision and regulation of exchanges, brokers and issuers
in foreign countries than there is in the United States. However, due to
the nature of the issuers of the Securities selected for the Trusts, the
Sponsor believes that adequate information will be available to allow
the Supervisor to provide portfolio surveillance for the Trusts.
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Technology. An investment in Units of the Trusts should be made with an
understanding of the characteristics of the problems and risks such an
investment may entail. Technology companies generally include companies
involved in the development, design, manufacture and sale of computers
and peripherals, software and services, data networking/communications
equipment, internet access/information providers, semiconductors and
semiconductor equipment and other related products, systems and
services. The market for these products, especially those specifically
related to the Internet, is characterized by rapidly changing
technology, rapid product obsolescence, cyclical market patterns,
evolving industry standards and frequent new product introductions. The
success of the issuers of the Securities depends in substantial part on
the timely and successful introduction of new products. An unexpected
change in one or more of the technologies affecting an issuer's products
or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results.
Furthermore, there can be no assurance that the issuers of the
Securities will be able to respond in a timely manner to compete in the
rapidly developing marketplace.
Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Securities and therefore the
ability of a Unit holder to redeem Units at a price equal to or greater
than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
Page 2
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Securities will obtain orders of similar magnitude as past orders from
other customers. Similarly, the success of certain technology companies
is tied to a relatively small concentration of products or technologies.
Accordingly, a decline in demand of such products, technologies or from
such customers could have a material adverse impact on issuers of the
Securities.
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Securities to
protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the Securities in
the Trusts.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
Page 3
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The FT Series 353 BANDWIDTH SOLUTIONS PORTFOLIO
SERIES, ENERGY PORTFOLIO, SERIES 6, FINANCIAL SERVCES PORTFOLIO,
SERIES 7, PHARMACEUTICAL PORTFOLIO, SERIES 7, TECHNOLOGY
PORTFOLIO, SERIES 10, certifies that it meets all of the
requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment of its Registration
Statement to be signed on its behalf by the undersigned thereunto
duly authorized in the Village of Lisle and State of Illinois on
September 29, 2000.
FT 353
BANDWIDTH SOLUTIONS PORTFOLIO SERIES
ENERGY PORTFOLIO, SERIES 6
FINANCIAL SERVCES PORTFOLIO, SERIES 7
PHARMACEUTICAL PORTFOLIO, SERIES 7
TECHNOLOGY PORTFOLIO, SERIES 10
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title Date
David J. Allen Sole Director of )
Nike Securities )
Corporation, ) September 29, 2000
the General Partner )
of Nike Securities L.P. )
)
) Robert M. Porcellino
) Attorney-in-Fact**
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Combined Series 258 (File No. 33-63483) and the same is
hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated September 8, 2000 in
this Post-Effective Amendment to the Registration Statement and
related Prospectus of The First Trust Special Situations Trust
Series dated September 27, 2000.
ERNST & YOUNG LLP
Chicago, Illinois
September 26, 2000
