SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 363
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETIO, DATED AUGUST 20, 1999
CORE HOLDINGS FLEXPORTFOLIO, 1999 FALL SERIES
PHARMACEUTICAL FLEXPORTFOLIO, SERIES 2
FT 363
FT 363 consists of two separate unit investment trusts each of which is
listed above (each, a "Trust," and collectively, the "Trusts"). Each
Trust contains a diversified portfolio of common stocks ("Securities")
issued by companies in the industry sector or investment focus for which
the Trust is named. The objective of each Trust is to provide an above-
average total return through capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
First Trust (registered trademark)
1-800-621-9533
The date of this prospectus is __________, 1999
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statements of Net Assets 6
Schedules of Investments 7
The FT Series 9
Portfolios 10
Risk Factors 1
Portfolio Securities Descriptions 12
Public Offering 13
Distribution of Units 15
The Sponsor's Profits 15
The Secondary Market 15
How We Purchase Units 16
Expenses and Charges 16
Tax Status 17
Rights of Unit Holders 18
Income and Capital Distributions 18
Redeeming Your Units 19
Removing Securities from a Trust 20
Amending or Terminating the Indenture 21
Information on the Sponsor, Trustee and Evaluator 22
Other Information 23
Page 2
Summary of Essential Information
FT 363
At the Opening of Business on the Initial Date of Deposit-__________, 1999
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Core Holdings Pharmaceutical
FlexPortfolio FlexPortfolio
1999 Fall Series Series 2
___________ ___________
<S> <C> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $10.000 $10.000
Maximum Sponsor retention of 2.75% of the Public Offering Price per Unit
(2.75% of the net amount invested,
exclusive of the deferred Sponsor retention) (3) $ .275 $ .275
Less Deferred Sponsor retention per Unit $ (.275) $ (.275)
Public Offering Price per Unit (4) $10.000 $10.000
Sponsor's Initial Repurchase Price per Unit (5) $10.000 $10.000
Redemption Price per Unit (based on aggregate underlying
value of Securities less deferred Sponsor retention) (5) $10.000 $10.000
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date __________, 1999
Mandatory Termination Date (6) September 15, 2004
Income Distribution Record Date:
Core Holdings FlexPortfolio, 1999 Fall Series Fifteenth day of each March, June, September and December
commencing December 15, 1999.
Pharmaceutical FlexPortfolio, Series 2 Fifteenth day of each June and December commencing December 15, 1999.
Income Distribution Date:(7)
Core Holdings FlexPortfolio, 1999 Fall Series Last day of each March, June, September and December
commencing December 31, 1999.
Pharmaceutical FlexPortfolio, Series 2 Last day of each June and December commencing December 31, 1999.
______________
<FN>
NOTES TO SUMMARY OF ESSENTIAL INFORMATION
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of a Trust so that the Public Offering Price
per Unit will equal approximately $10.00. If we make such an adjustment,
the fractional undivided interest per Unit will vary from the amounts
indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern time) on each day on which it is open (the "Evaluation Time").
(3) The maximum Sponsor retention is entirely deferred. See "Fee Table"
and "Public Offering." If you redeem or sell Units, you will not be
assessed any remaining unaccrued Sponsor retention payments at the time
of sale or redemption.
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. Additional Units may be
created during the day of the Initial Date of Deposit which, along with
the Units described above, will be valued as of the Evaluation Time on
the Initial Date of Deposit and sold to investors at the Public Offering
Price per Unit based on this valuation. On the Initial Date of Deposit,
the Public Offering Price per Unit will not include any accumulated
dividends on the Securities. After the Initial Date of Deposit, the
Public Offering Price per Unit will include a pro rata share of any
accumulated dividends on the Securities.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period, the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include the
estimated organization costs per Unit set forth under "Fee Table." After
such date, the Sponsor's Repurchase Price and Redemption Price per Unit
will not include such estimated organization costs. See "Redeeming Your
Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$1.00 per 100 Units. In any case, we will distribute any funds in the
Capital Account in December of each year.
</FN>
</TABLE>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may pay if you
buy and hold Units of the Trusts. See "Public Offering" and "Expenses
and Charges." Although the Trusts each have a term of approximately five
years and are unit investment trusts rather than mutual funds, this
information allows you to compare fees.
<TABLE>
<CAPTION>
Core Holdings Pharmaceutical
FlexPortfolio FlexPortfolio
1999 Fall Series Series 2
___________________ _____________________
Amount Amount
per Unit per Unit
________ ________
<S> <C> <C> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Maximum Sponsor retention (sales charge) 2.75%(a) $ .275 2.75%(a) $ .275
===== ====== ===== ======
Maximum Sponsor retention imposed on reinvested dividends 2.75%(b) $ .275 2.75%(b) $ .275
===== ====== ===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs %(c) $.0052 %(c) $.0052
===== ====== ===== ======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative
and evaluation fees % .0130 % .0130
Trustee's fee and other operating expenses % .0118 % .0118
_____ ______ _____ ______
Total % $.0248 % $.0248
===== ====== ===== ======
</TABLE>
This example is intended to help you compare the cost of investing in a
Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in a Trust for the periods shown
and sell all your Units at the end of those periods. The example also
assumes a 5% return on your investment each year and that a Trust's
operating expenses stay the same. Although your actual costs may vary,
based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years
__________ __________ __________
<S> <C> <C> <C>
Core Holdings FlexPortfolio, 1999 Fall Series $ $ $
Pharmaceutical FlexPortfolio, Series 2
The example will not differ if you hold rather than sell your Units at
the end of each period. The example does not reflect Sponsor retention
on reinvested dividends and other distributions. If these charges were
included, your costs would be higher.
______________
<FN>
(a) The maximum Sponsor retention (sales charge) is entirely deferred.
Sponsor retention is the sales charge paid to the Sponsor as
compensation for its activities in connection with creating the Trusts.
Dealers and other selling agents will receive no concessions or
commissions on the sale of Units. The maximum Sponsor retention is a
fixed dollar amount equal to $.275 per Unit (approximately $.055 per
Unit per year) which will be accrued at the daily rate of $ per
Unit and deducted monthly beginning September 20, 1999 and on the 20th
day of each month thereafter (or the preceding business day if the 20th
day is not a business day) over the life of a Trust and at a Trust's
termination. If you buy Units at a price of less than $10.00 per Unit,
the dollar amount of the Sponsor retention will not change but the
Sponsor retention on a percentage basis will be more than 2.75% of the
Public Offering Price. When you purchase Units you will only be subject
to Sponsor retention payments not yet collected.
(b) Reinvested dividends will be subject only to the Sponsor retention
remaining at the time of reinvestment. See "Income and Capital
Distributions."
(c) You will bear all or a portion of the costs incurred in organizing
your respective Trust. These estimated organization costs are included
in the price you pay for your Units and will be deducted from the assets
of a Trust at the earlier of six months after the Initial Date of
Deposit or the end of the initial offering period.
</FN>
</TABLE>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 363
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 363, comprised of the Core Holdings
FlexPortfolio, 1999 Fall Series and Pharmaceutical FlexPortfolio, Series
2, as of the opening of business on __________, 1999. These statements
of net assets are the responsibility of the Trusts' Sponsor. Our
responsibility is to express an opinion on these statements of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letter of credit allocated among the Trusts on __________, 1999. An
audit also includes assessing the accounting principles used and
significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statements of net assets. We believe that
our audit of the statements of net assets provides a reasonable basis
for our opinion.
In our opinion, the statements of net assets referred to above presents
fairly, in all material respects, the financial position of FT 363,
comprised of the Core Holdings FlexPortfolio, 1999 Fall Series and
Pharmaceutical FlexPortfolio, Series 2, at the opening of business on
__________, 1999 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
__________, 1999
Page 5
Statements of Net Assets
FT 363
At the Opening of Business on the
Initial Date of Deposit-__________, 1999
<TABLE>
<CAPTION>
Core Holdings Pharmaceutical
FlexPortfolio FlexPortfolio
1999 Fall Series Series 2
______________ _____________
<S> <C> <C>
NET ASSETS
Investment in Securities represented by
purchase contracts (1) (2) $ $
Less liability for reimbursement to Sponsor
for organization costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (4) $ $
Less Sponsor retention (4) ( ) ( )
Less estimated reimbursement to Sponsor
for organization costs (3) ( ) ( )
________ ________
Net assets $ $
======== ========
_____________
<FN>
NOTES TO STATEMENTS OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Chase Manhattan Bank,
of which $400,000 will be allocated between the two Trusts in FT 363,
has been deposited with the Trustee as collateral, covering the monies
necessary for the purchase of the Securities according to their purchase
contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trusts. These costs have been estimated at $ per
Unit for each Trust. A payment will be made at the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period to an account maintained by the Trustee from which the obligation
of the investors to the Sponsor will be satisfied. To the extent that
actual organization costs of a Trust are greater than the estimated
amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the
assets of such Trust.
(4) The maximum Sponsor retention is entirely deferred. The maximum
Sponsor retention is 2.75% of the Public Offering Price (equivalent to
2.75% of the net amount invested, exclusive of the deferred Sponsor
retention). This Sponsor retention, which accrues on a daily basis and
which will total $.275 per Unit over the life of a Trust, will be paid
to us in monthly installments beginning on September 20, 1999 and on the
twentieth day of each month thereafter (or if such date is not a
business day, on the preceding business day) over the life of a Trust
and at a Trust's termination. If you redeem or sell Units, you will not
be subject to any remaining unaccrued Sponsor retention payments at the
time of sale or redemption.
</FN>
</TABLE>
Page 6
Schedule of Investments
Core Holdings FlexPortfolio, 1999 Fall Series
FT 363
At the Opening of Business on the Initial Date of Deposit-__________, 1999
<TABLE>
<CAPTION>
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price (6) Share the Trust (2)
_________ _______________________________________ ____________ ______ __________
<S> <C> <C> <C> <C>
% $ $
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
______ _________
Total Investments 100% $
====== =========
________________
<FN>
See "Notes to Schedules of Investments" on page 8.
</FN>
</TABLE>
Page 7
Schedule of Investments
Pharmaceutical FlexPortfolio, Series 2
FT 363
At the Opening of Business on the Initial Date of Deposit-__________, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities to
of Shares Name of Issuer of Securities (1) Price (3) Share the Trust (2)
_________ _______________________________________ ____________ ______ __________
<S> <C> <C> <C> <C>
ABT Abbott Laboratories % $ $
AHP American Home Products Corporation %
AMGN Amgen Inc. %
BGEN Biogen, Inc. %
BMY Bristol-Myers Squibb Company %
ELN Elan Corporation Plc (ADR) %
GENZ Genzyme Corporation (General Division) %
GLX Glaxo Wellcome Plc (ADR) %
JNJ Johnson & Johnson %
JMED Jones Pharma, Inc. %
LLY Eli Lilly and Company %
MRK Merck & Co., Inc. %
MYL Mylan Laboratories, Inc. %
NVTSY Novartis AG (ADR) %
PFE Pfizer Inc. %
ROHHY Roche Holdings AG (ADR) %
SGP Schering-Plough Corporation %
SBH SmithKline Beecham Plc (ADR) %
WLA Warner-Lambert Company %
WPI Watson Pharmaceuticals, Inc. %
______ _________
Total Investments 100% $
====== =========
_____________
<FN>
NOTES TO SCHEDULES OF INVESTMENTS
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. We entered into purchase contracts for the
Securities on __________, 1999.
(2) The cost of the Securities to a Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last closing sale prices of the listed Securities and
the ask prices of the over-the-counter traded Securities at the
Evaluation Time on the business day preceding the Initial Date of
Deposit). The valuation of the Securities has been determined by the
Evaluator, an affiliate of ours. The cost of the Securities to us and
our profit or loss (which is the difference between the cost of the
Securities to us and the cost of the Securities to a Trust) are set
forth below:
Cost of Securities
to Sponsor Profit (Loss)
______________ _____________
Core Holdings FlexPortfolio, 1999 Fall Series $ $
Pharmaceutical FlexPortfolio, Series 2 $ $
(3) Each Trust may contain additional Securities each of which will not
exceed the approximate percentage set forth under Approximate Percentage
of Aggregate Offering Price. Although it is not the Sponsor's intention,
certain of the Securities listed may not be included in a final
portfolio. Also, the percentages of the Aggregate Offering Price for the
Securities are approximate amounts and may vary in the final portfolios.
</FN>
</TABLE>
Page 8
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created several similar
yet separate series of an investment company which we have named The FT
Series. We designate each of these investment company series, FT Series,
with a different series number.
YOU MAY GET MORE SPECIFIC DETAILS ON SOME OF THE INFORMATION IN THIS
PROSPECTUS IN AN "INFORMATION SUPPLEMENT" BY CALLING THE TRUSTEE AT 1-
800-682-7520.
What We Call the Trusts.
This FT Series contains two separate unit investment trusts known as
Core Holdings FlexPortfolio, 1999 Fall Series and Pharmaceutical
FlexPortfolio, Series 2.
Units of the Trusts can only be purchased 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 or by employees, officers and directors (or their
immediate family members) of the Sponsor, our related companies, dealers
and their affiliates, and vendors providing services to us. You may
switch from one FlexPortfolio to any other FlexPortfolio series which is
currently in the primary market on any business day at no additional
cost. However, your broker/dealer or the Sponsor may at any time place
limits on the number of exchanges you can make with or without prior
notice.
Mandatory Termination Date.
Each Trust will terminate on the Mandatory Termination Date set forth in
"Summary of Essential Information." Each Trust was created under the
laws of the State of New York by a Trust Agreement (the "Indenture")
dated the Initial Date of Deposit. This agreement, entered into between
Nike Securities L.P., as Sponsor, The Chase Manhattan Bank as Trustee
and First Trust Advisors L.P. as Portfolio Supervisor and Evaluator,
governs the operation of the Trusts.
How We Created the Trusts.
On the Initial Date of Deposit, we deposited the Securities with the
Trustee, and in turn, the Trustee delivered documents to us representing
our ownership of the Trusts, in the form of units ("Units").
With our deposit of Securities on the Initial Date of Deposit we
established a percentage relationship among the Securities in each
Trust's portfolio, as stated under "Schedule of Investments" for each
Trust. After the Initial Date of Deposit, we may deposit additional
Securities in the Trusts, or cash (including a letter of credit) with
instructions to buy more Securities, to create new Units for sale. If we
create additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit, and not the percentage relationship
existing on the day we are creating Units, since the two may differ.
This difference may be due to the sale, redemption or liquidation of any
of the Securities.
Since the prices of the underlying Securities will fluctuate daily, the
ratio of Securities in the Trusts, on a market value basis, will also
change daily. The portion of Securities represented by each Unit will
not change as a result of the deposit of additional Securities or cash
in a Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trusts pay the brokerage fees. To reduce
this dilution, the Trusts will try to buy the Securities as close to the
Evaluation Time and as close to the evaluation price as possible.
However, because each Trust pays the brokerage fees associated with its
creation of new Units and with the sale of Securities to meet redemption
and exchange requests, the ability to exchange between FlexPortfolio
series will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or an affiliate) to
act as agent for the Trusts to buy Securities. If we or an affiliate of
ours act as agent to the Trusts, we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that a Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
Page 9
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. However, if a contract for the purchase of any of the
Securities initially deposited in a Trust fails, unless we can purchase
substitute Securities ("Replacement Securities") we will refund to you
that portion of the purchase price and sales charge resulting from the
failed contract on the next Income Distribution Date. Any Replacement
Security a Trust acquires will be identical to those from the failed
contract.
Portfolios
Objectives. The objective of each Trust is to provide investors with the
potential for above-average capital appreciation through an investment
in a diversified portfolio of common stocks of companies in the industry
sector or investment focus for which the Trust is named.
Core Holdings FlexPortfolio, 1999 Fall Series. The objective of the Core
Holdings FlexPortfolio, 1999 Fall Series is to provide the potential for
above-average capital appreciation.
In the opinion of A.G. Edwards & Sons, Inc. ("A.G. Edwards"), to be a
successful investor, you have to do more than just pick a few stocks.
You should invest at least a portion of your portfolio in strong
companies-those that are leaders in businesses which have the potential
to grow over time and which have the potential for consistent, above-
average growth and profitability. In A.G. Edwards' opinion, there are
three guidelines which will result in success when investing:
- - Select stocks of quality companies;
- - Diversify your holdings; and
- - Maintain a long-term investment horizon.
There are many ways for growth-oriented investors to obtain growth
through their investments. In A.G. Edwards' opinion, buying companies
that are well managed, with highly sought after products and services,
is an excellent way to achieve growth. The Core Holdings FlexPortfolio,
1999 Fall Series consists of a portfolio of common stocks selected from
the Core Stock Investment Plan, which has been created by A.G. Edwards'
securities research analysts. These analysts have identified a number of
companies from a variety of industries which best exemplify the concept
of investing in companies that will continue to grow in the future.
The Core Holdings FlexPortfolio, 1999 Fall Series takes the Core List
from the A.G. Edwards' Core Stock Investment Plan and combines 25 of the
stocks into a defined portfolio. However, unlike the Core List, the
components of which may change depending on A.G. Edwards analysts'
perception of a company's earnings growth potential, the portfolio of
the Trust will remain constant over the life of the Trust. The formula
begins with the process of choosing good quality companies with solid
prospects for the future. The analysts have selected companies in easily
understandable businesses that possess important competitive advantages,
complementing records of long-standing profitability. When investors put
together an entire portfolio of companies whose earnings have the
potential to climb, generally the portfolio's market value should be
expected to do likewise. The other critical element of the formula
requires that an investor hold the investment for the long term, since
it takes time for companies to grow and for their stocks to reflect this
growth. This "buy and hold" philosophy encourages investors to focus on
the underlying companies and their progress and potential, and not to
have a short-term orientation which focuses on price fluctuations or the
economy, etc.
The Core List is based on the premise that a "good quality stock
investment" is typically one that meets a number of both quantitative
and qualitative criteria, including: consistently growing sales and
earnings; a prominent market share position; a solid return on equity; a
seasoned management team; and the potential to maintain these
characteristics in the future. In order to be placed in the A.G.
Edwards' Core Stock Investment Plan, a company must meet very specific
criteria. The Master List of more than 600 companies is screened for the
following characteristics:
- - Average annual earnings growth greater than 10% over the past 10 years;
- - Average annual sales growth greater than 8% over the past 10 years;
Page 10
- - Average annual return on equity greater than 15% over the past 10
years;
- - Higher earnings year over year in at least seven of the past 10
years; and
- - Market capitalization of $1 billion or greater.
We have signed a licensing agreement with A.G. Edwards which allows us
to use the name "Core Stock Investment Plan" and receive periodic
research reports on the Securities included in the Core Holdings
FlexPortfolio, 1999 Fall Series.
Pharmaceutical FlexPortfolio, Series 2 is a unit investment trust which
invests in a portfolio of common stocks of pharmaceutical companies.
Industry Overview:
- - Companies are working closely with managed care providers who see
pharmaceuticals as a cost-effective alternative to more expensive
treatments.
- - Given that every 7 seconds a baby boomer turns 50, the pharmaceutical
industry is under pressure to continue to develop new drugs and vaccines
to help improve and possibly prolong life.
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 Pharmaceutical FlexPortfolio, Series 2 have
been researched and evaluated using database screening techniques,
fundamental analysis, and the judgment of our 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"
for a discussion of the risks of investing in the Trusts.
Risk Factors
Price Volatility. The Trusts invest in common stocks of U.S., and, for
Pharmaceutical FlexPortfolio, Series 2, foreign companies. The value of
a Trust's Units will fluctuate with changes in the value of these common
stocks. Common stock prices fluctuate for several reasons including
changes in investors' perceptions of the financial condition of an
issuer or the general condition of the relevant stock market, or when
political or economic events affecting the issuers occur.
Because the Trusts are not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of any Trust will be positive over any period of time or
that you won't lose money. Units of the Trusts are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Certain of the Securities in 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. This is a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Pharmaceutical Industry. The Pharmaceutical FlexPortfolio, Series 2
includes companies involved in drug development and production.
Pharmaceutical companies are subject to changing government regulation,
including price controls, national health insurance, managed care
regulation, and tax incentives or penalties related to medical insurance
premiums, which could have a negative effect on the price and
availability of their products and services. In addition, such companies
face increasing competition from generic drug sales, the termination of
their patent protection for certain drugs, and technological advances
which render their products or services obsolete. The research and
development costs required to bring a drug to market are substantial and
may include a lengthy review by the government, with no guarantee that
the product will ever go to market or show a profit. Many of these
companies may not offer certain drugs or products for several years, and
as a result, may have significant losses of revenue and earnings.
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
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pending or proposed legislation or pending or threatened litigation will
have on the share prices of the Securities.
Year 2000 Problem. Many computer systems were not designed to properly
process information and data involving dates of January 1, 2000 and
thereafter. This is commonly known as the "Year 2000 Problem." We do not
expect that any of the computer system changes necessary to prepare for
January 1, 2000 will cause any major operational difficulties for the
Trusts. However, we are unable to predict what impact the Year 2000
Problem will have on any of the issuers of the Securities.
Foreign Stocks. Certain of the Securities in the Trusts are issued by
foreign companies, which makes these Trusts subject to more risks than
if they invested solely in domestic common stocks. These Securities are
either directly listed on a U.S. securities exchange or are in the form
of American Depositary Receipts ("ADRs") which are listed on a U.S.
securities exchange. Risks of foreign common stocks include losses due
to future political and economic developments, foreign currency
devaluations, restrictions on foreign investments and exchange of
securities, inadequate financial information and lack of liquidity of
certain foreign markets.
Securities Selection. While A.G. Edwards has carefully evaluated and
approved the Securities in the Core Holdings FlexPortfolio, 1999 Fall
Series for this purpose, they may choose for any reason not to recommend
any or all of the Securities for another purpose or at a later date.
This may affect the value of your Units in the Core Holdings
FlexPortfolio, 1999 Fall Series. In addition, A.G. Edwards in its
general securities business acts as agent or principal in connection
with buying and selling stocks, including the Securities, and may have
bought the Securities for the Core Holdings FlexPortfolio, 1999 Fall
Series, thereby benefiting. A.G. Edwards also acts as a market maker,
underwrites certain issues, and provides investment banking services to
companies, which may include the issuers of certain of the Securities in
the Core Holdings FlexPortfolio, 1999 Fall Series.
Portfolio Securities Descriptions
Core Holdings FlexPortfolio, 1999 Fall Series
Pharmaceutical FlexPortfolio, Series 2
Abbott Laboratories, headquartered in Abbott Park, Illinois, discovers,
develops, makes and sells a broad and diversified line of healthcare
products and services.
American Home Products Corporation, headquartered in Madison, New
Jersey, makes nutritionals, cardiovascular and metabolic disease
therapies, mental health products, anti-inflammatory/analgesic products
and vaccines, and over-the-counter drugs. The company also makes crop
protection and pest control products.
Amgen Inc., headquartered in Thousand Oaks, California, is a global
biotechnology concern which develops, makes and markets human
therapeutics based on advanced cellular and molecular biology, including
a protein that stimulates red blood cell production and a protein that
stimulates white blood cell production.
Biogen, Inc., headquartered in Cambridge, Massachusetts, develops and
makes pharmaceuticals for human healthcare through genetic engineering.
The company's primary focus is on developing and testing products for
the treatment of multiple sclerosis, inflammatory and respiratory
diseases, kidney diseases and certain viruses and cancers.
Bristol-Myers Squibb Company, headquartered in New York, New York,
through divisions and subsidiaries, produces and distributes
pharmaceutical and non-prescription health products, toiletries and
beauty aids, and medical devices.
Elan Corporation Plc (ADR), headquartered in Dublin, Ireland, develops
and licenses drug delivery systems formulated to increase the
therapeutic value of certain medications, with reduced side effects. The
company also develops and markets therapeutic agents to diagnose and
treat central nervous systems diseases and disorders.
Genzyme Corporation (General Division), headquartered in Cambridge,
Massachusetts, develops and markets specialty therapeutic, surgical and
Page 12
diagnostic products, pharmaceuticals and genetic diagnostic services.
The company also develops, makes and markets biological products for the
treatment of cartilage damage, severe burns, chronic skin ulcers and
neurodegenerative diseases.
Glaxo Wellcome Plc (ADR), headquartered in London, England, conducts
research into and develops, makes and markets ethical pharmaceuticals
around the world. Products include gastro-intestinal, respiratory, anti-
emesis, anti-migraine, systemic antibiotics, cardiovascular,
dermatological, foods and animal health.
Johnson & Johnson, headquartered in New Brunswick, New Jersey, makes and
sells pharmaceuticals, personal healthcare products, medical and
surgical equipment, and contact lenses.
Jones Pharma, Inc., headquartered in St. Louis, Missouri, makes and
sells pharmaceuticals, including products that serve the thyroid
treatment and the critical care segments of the healthcare industry, as
well as the companion animal segment of the veterinary industry.
Eli Lilly and Company, headquartered in Indianapolis, Indiana, with
subsidiaries, develops, makes and markets pharmaceutical and animal
health products sold in countries around the world. The company also
provides healthcare management services in the United States.
Merck & Co., Inc., headquartered in Whitehouse Station, New Jersey, is a
leading pharmaceutical concern that discovers, develops, makes and
markets a broad range of human and animal health products and services.
The company also administers managed prescription drug programs.
Mylan Laboratories, Inc., headquartered in Pittsburgh, Pennsylvania,
develops, makes and distributes generic and proprietary pharmaceutical
and wound care products for resale by others. Products include solid
oral dosage forms, as well as suspensions, liquids, injectables and
transdermals, many of which are packaged in specialized systems.
Novartis AG (ADR), headquartered in Basel, Switzerland, manufactures
healthcare products for use in a broad range of medical fields, as well
as nutritional and agricultural products. The company markets its
products worldwide.
Pfizer Inc., headquartered in New York, New York, produces and
distributes anti-infectives, anti-inflammatory agents, cardiovascular
agents, antifungal drugs, central nervous system agents, orthopedic
implants, food science products, animal health products, toiletries,
baby care products, dental rinse and other proprietary health items.
Roche Holdings AG (ADR), headquartered in Basel, Switzerland, develops
and manufactures pharmaceutical and chemical products. Through its
subsidiaries, the company develops pharmaceuticals and drugs, fine
chemicals and vitamins, fragrances and flavors, diagnostic equipment and
liquid crystals. Products are distributed throughout Europe, Asia, Latin
America and the United States.
Schering-Plough Corporation, headquartered in Madison, New Jersey,
develops, makes and markets pharmaceutical and healthcare products
worldwide. Products include prescription drugs, animal health products
and over-the-counter foot care and sun care products.
SmithKline Beecham Plc (ADR), headquartered in Middlesex, England,
discovers, develops, makes and sells pharmaceuticals, vaccines, over-the-
counter medicines and health-related consumer products. The company also
provides healthcare services, including disease management, clinical
laboratory testing and pharmaceutical benefit management.
Warner-Lambert Company, headquartered in Morris Plains, New Jersey,
makes consumer healthcare products including over-the-counter health
products, shaving products and pet care products; confectionery products
including chewing gums, breath mints and hard candies; and ethical
pharmaceuticals, biologicals and empty gelatin capsules.
Watson Pharmaceuticals, Inc., headquartered in Corona, California,
researches, develops and sells off-patent and proprietary pharmaceutical
products, including therapeutic equivalents of solid, liquid and
sustained release products.
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
Page 13
- - The aggregate underlying value of the Securities;
- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The accrued Sponsor retention (which is entirely deferred).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Securities purchased with the portion of the Public Offering Price
intended to be used to reimburse the Sponsor for a Trust's organization
costs (including costs of preparing the registration statement, the
Indenture and other closing documents, registering Units with the
Securities and Exchange Commission ("SEC") and states, the initial audit
of each Trust portfolio, legal fees and the initial fees and expenses of
the Trustee) will be purchased in the same proportionate relationship as
all the Securities contained in a Trust. Securities will be sold to
reimburse the Sponsor for a Trust's organization costs at the earlier of
six months after the Initial Date of Deposit or the end of the initial
offering period (a significantly shorter time period than the life of
the Trusts). During the period ending with the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period, there may be a decrease in the value of the Securities. To the
extent the proceeds from the sale of these Securities are insufficient
to repay the Sponsor for Trust organization costs, the Trustee will sell
additional Securities to allow a Trust to fully reimburse the Sponsor.
In that event, the net asset value per Unit of a Trust will be reduced
by the amount of additional Securities sold. Although the dollar amount
of the reimbursement due to the Sponsor will remain fixed and will never
exceed the per Unit amount set forth for a Trust in "Statement of Net
Assets," this will result in a greater effective cost per Unit to Unit
holders for the reimbursement to the Sponsor. To the extent actual
organization costs are less than the estimated amount, only the actual
organization costs will be deducted from the assets of a Trust. When
Securities are sold to reimburse the Sponsor for organization costs, the
Trustee will sell Securities, to the extent practicable, which will
maintain the same proportionate relationship among the Securities
contained in a Trust as existed prior to such sale.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Minimum Purchase.
The minimum amount you can purchase of a Trust is $1,000 worth of Units.
Sponsor Retention.
The maximum Sponsor retention you will pay is entirely deferred. This
sales charge is equal to approximately $.055 per Unit per year and will
be accrued daily at the rate of $ per Unit and paid on the 20th
day of each month (or if the 20th day is not a business day on the
preceding business day) beginning September 20, 1999 and continuing for
the life of the Trusts and at a Trust's termination. On the Initial Date
of Deposit this fee will equal 2.75% of the Public Offering Price
(equivalent to 2.75% of the net amount invested) but because this fee is
a fixed dollar amount per Unit it will vary from 2.75% as the Public
Offering Price varies from $10 per Unit. However, in no event will the
maximum Sponsor retention exceed % of the Public Offering Price per
Unit. Units purchased subsequent to the initial Sponsor retention
payment will be subject only to those Sponsor retention payments not yet
collected.
The Value of the Securities.
The Evaluator will appraise the value of the underlying Securities in
the Trusts as of the Evaluation Time on each business day and will
adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
Prospectus will exclude Saturdays, Sundays and holidays on which the New
York Stock Exchange ("NYSE") is closed.
Page 14
The aggregate underlying value of the Securities in a Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, the evaluation will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate as
a basis for evaluation). If current ask prices are unavailable, the
evaluation is generally determined:
a) On the basis of current ask prices for comparable securities,
b) By appraising the value of the Securities on the ask side of the
market, or
c) By any combination of the above.
After the initial offering period is over, the secondary market Public
Offering Price will be determined in the same manner as during the
initial offering period except that in calculating the aggregate
underlying value of the Securities, bid prices are used instead of ask
prices when necessary.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Award Programs.
From time to time we may sponsor programs which provide awards to our
dealers' registered representatives who have sold a minimum number of
Units during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trusts. In addition, we will pay to dealers who sponsor
sales contests or recognition programs that conform to our criteria, or
participate in our sales programs, amounts equal to no more than the
total applicable Sponsor fee on Units sold by such persons during such
programs. We make these payments out of our own assets, and not out of a
Trust's assets. These programs will not change the price you pay for
your Units or the amount that a Trust will receive from the Units sold.
Investment Comparisons.
From time to time we may compare the then current estimated returns of
the Trusts (which may show performance net of the expenses and charges
the Trusts would have incurred) and returns over specified periods of
other similar trusts we sponsor in our advertising and sales materials,
with (1) returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, Business Week,
Forbes or Fortune. The investment characteristics of each Trust, which
are described more fully elsewhere in this prospectus, differ from other
comparative investments. You should not assume that these performance
comparisons will be representative of a Trust's future performance.
The Sponsor's Profits
We will receive the Sponsor retention per Unit as stated in "Public
Offering." Also, any difference between our cost to purchase the
Securities and the price at which we sell them to a Trust is considered
a profit or loss (see Note 2 of "Notes to Schedule of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which 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 we are not obligated to, we intend to maintain a market for the
Units after the initial offering period and continuously offer to
purchase Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Page 15
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive the proceeds from the
sale 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 listed under "Fee
Table." If actual expenses exceed the estimate, the appropriate Trust
will bear the excess. The Trustee will pay operating expenses of a Trust
from the Income Account of such Trust if funds are available, and then
from the Capital Account. The Income and Capital Accounts are
noninterest-bearing to Unit holders, so the Trustee benefits from the
use of these funds.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trusts, and will receive brokerage fees
when a Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trusts and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trusts. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase
research services from a number of sources, which may include
underwriters or dealers of the Trusts.
The fees payable to 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, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing a given service to all unit investment trusts
for which we provide such services be more than the actual cost of
providing such services in such year.
In addition to a Trust's operating expenses, and those fees described
above, each Trust may also incur the following charges:
- - Monthly, quarterly or semiannual statements to Unit holders;
- - 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 Securities are all common stocks and dividend
income is unpredictable, we cannot guarantee that dividends will be
sufficient to meet any or all expenses of the Trusts. If there is not
enough cash in the Income or Capital Accounts of a Trust, the Trustee
has the power to sell Securities in a Trust to make cash available to
pay these charges which may result in capital gains or losses to you.
See "Tax Status."
The Trusts will be audited annually. So long as we are making a
secondary market for Units, we will bear the cost of these annual audits
to the extent the cost exceeds $0.0050 per Unit. Otherwise, the Trusts
will pay for the audit. You can receive a copy of the audited financial
statements by notifying the Trustee.
Page 16
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trusts. This section is current as
of the date of this prospectus. Tax laws and interpretations change
frequently, and these summaries do not describe all of the tax
consequences to all taxpayers. For example, these summaries generally do
not describe your situation if you are a non-U.S. person, a
broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state or foreign taxes. As
with any investment, you should consult your own tax professional about
your particular consequences.
Trust Status.
The Trusts will not be taxed as corporations for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities and other assets held by your Trust, and
as such you will be considered to have received a pro rata share of
income (i.e., dividends and capital gains, if any) from each Security
when such income is considered to be received by your Trust. This is
true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a Trust
which you must take into account for federal income tax purposes is not
reduced by amounts used to pay the Sponsor retention.
Your Tax Basis and Income or Loss upon Disposition.
If your Trust disposes of Securities, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related
Securities from your share of the total proceeds received in the
transaction. You can generally determine your initial tax basis in each
Security or other Trust asset by apportioning the cost of your Units,
generally including Sponsor retention, among each Security or other
Trust asset ratably according to their value on the date you purchase
your Units. In certain circumstances, however, you may have to adjust
your tax basis after you purchase your Units (for example, in the case
of certain dividends that exceed a corporation's accumulated earnings
and profits).
If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 20% (10% for certain taxpayers in the lowest
tax bracket). Net capital gain equals net long-term capital gain minus
net short-term capital loss for the taxable year. Capital gain or loss
is long-term if the holding period for the asset is more than one year
and is short-term if the holding period for the asset is one year or
less. You must exclude the date you purchase your Units to determine the
holding period of your Units. The tax rates for capital gains realized
from assets held for one year or less are generally the same as for
ordinary income. The tax code may, however, treat certain capital gains
as ordinary income in special situations.
In-Kind Distributions.
Under certain circumstances, you may request an In-Kind Distribution of
Securities at a Trust's termination. If you request an In-Kind
Distribution you will be responsible for any expenses related to this
distribution. By electing to receive an In-Kind Distribution, you will
receive an undivided interest in whole shares of stock plus, possibly,
cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by a Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by a Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
tax basis in such fractional share of the Security.
Limitations on the Deductibility of Trust Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of a Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by a Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
Foreign, State and Local Taxes.
Some distributions by a Trust may be subject to foreign withholding
taxes. Any dividends withheld will nevertheless be treated as income to
you. However, because you are deemed to have paid directly your share of
foreign taxes that have been paid or accrued by a Trust, you may be
Page 17
entitled to a foreign tax credit or deduction for U.S. tax purposes with
respect to such taxes.
Under the existing income tax laws of the State and City of New York,
the Trusts will not be taxed as corporations, and the income of the
Trusts will be treated as the income of the Unit holders in the same
manner as for federal income tax purposes. You should consult your tax
advisor regarding potential foreign, state or local taxation with
respect to your Units.
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
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 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
your Trust;
- - The number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
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. You will also receive a quarterly statement which describes
the Core Holdings FlexPortfolio, 1999 Fall Series' performance. After
the end of each calendar year, the Trustee will provide you with the
following information:
- - A summary of transactions in your Trust for the year;
- - Any Securities sold during the year and the Securities held at the
end of that year by your Trust;
- - The Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
- - Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit dividends received on a
Trust's Securities to the Income Account of a Trust. All other receipts,
such as return of capital, are credited to the Capital Account of such
Trust.
Page 18
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." Distribution amounts will vary with changes in a Trust's
fees and expenses, in dividends received and with the sale of
Securities. The Trustee will distribute amounts in the Capital Account,
net of amounts designated to meet redemptions, pay the Sponsor retention
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. If the Trustee does not have your TIN, it is
required by the Internal Revenue Service ("IRS") to withhold a certain
percentage of your distribution and deliver such amount to the 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 from the
Trustee to make sure they have the number to avoid the "back-up
withholding." The Trustee is not required to pay interest on funds held
in the Income or Capital Accounts of a Trust. However, the Trustee may
earn interest on these funds, thus benefiting from the use of such funds.
We anticipate that the Sponsor retention will be collected from the
Capital Account of a Trust and that there will be enough money in the
Capital Account to cover these costs. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after a Trust is terminated you will receive
the pro rata share of the money from the disposition of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
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 for any state and local taxes and any governmental charges to be
paid out of such Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of your Trust by notifying the Trustee at least 10 days before any
Record Date. Each later distribution of income and/or capital on your
Units will be reinvested by the Trustee into additional Units of your
Trust. You will have to pay any remaining Sponsor retention on any Units
acquired pursuant to this distribution reinvestment option. This option
may not be available in all states. PLEASE NOTE THAT EVEN IF YOU REINVEST
DISTRIBUTIONS, THEY ARE STILL CONSIDERED DISTRIBUTIONS FOR INCOME TAX
PURPOSES.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request you send to the Trustee
must be properly endorsed with proper instruments of transfer and
signature guarantees as explained in "Rights of Unit Holders-Unit
Ownership" (or by providing satisfactory indemnity if the certificates
were lost, stolen, or destroyed). No redemption fee will be charged, but
you are responsible for any governmental charges that apply. In
addition, you will not be assessed the amount of any remaining unaccrued
Sponsor retention when you sell or redeem your Units. Three business
days after the day you tender your Units (the "Date of Tender") you will
receive cash in an amount for each Unit equal to the Redemption Price
per Unit calculated at the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of a Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of a Trust. The IRS
will require the Trustee to withhold a portion of your redemption
proceeds if it does not have your TIN.
The Trustee may sell Securities in a Trust to make funds available for
redemption. If Securities are sold, the size and diversification of a
Page 19
Trust will be reduced. These sales may result in lower prices than if
the Securities were sold at a different time. As a result, your
broker/dealer or the Sponsor may at any time place limits on the number
of exchanges between FlexPortfolios you can make with or without prior
notice. However, any limitation on your right to exchange between
FlexPortfolios will have no effect on your right to redeem Units.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
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 such Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of such Trust, if any;
4. cash held for distribution to Unit holders of record of such Trust as
of the business day before the evaluation being made; and
5. other liabilities incurred by such Trust; and
dividing
1. the result by the number of outstanding Units of a Trust.
The aggregate underlying value of the Securities for purposes of
calculating the Redemption Price during the secondary market is
determined in the same manner as that used to calculate the secondary
market Public Offering Price as discussed in "Public Offering-The Value
of the Securities."
Until the earlier of six months after the Initial Date of Deposit or the
end of the initial offering period, the Redemption Price per Unit will
include estimated organization costs as set forth under "Fee Table."
Removing Securities from a Trust
The portfolios of the Trusts are not managed. However, we may, but are
not required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to a Trust.
Except in the limited instance in which a Trust acquires Replacement
Securities, as described in "The FT Series," a Trust may not acquire any
securities or other property other than the Securities. The Trustee, on
behalf of the Trusts, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by a Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account of a Trust for distribution to
Unit holders or to meet redemption requests. The Trustee may retain and
pay us or an affiliate of ours to act as agent for a Trust to facilitate
Page 20
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 which Securities should be sold, we will
try to maintain the proportionate relationship among the Securities. If
this is not possible, the composition and diversification of a Trust may
be changed. To get the best price for a Trust we may have to specify
minimum amounts (generally 100 shares) in which blocks of Securities are
to be sold. We may consider sales of units of unit investment trusts
which we sponsor 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.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - To cure ambiguities;
- - To correct or supplement any defective or inconsistent provision;
- - To make any amendment required by any governmental agency; or
- - To make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trusts will terminate on
the Mandatory Termination Date. The Trusts may be terminated earlier:
- - Upon the consent of 100% of the Unit holders of a Trust;
- - If the value of the Securities owned by a Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
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. If a Trust is terminated due to this last reason,
we will refund to each purchaser of Units of such Trust the entire
Sponsor retention paid by such purchaser; however, termination of a
Trust for any other stated reason will result in the waiver of any
remaining Sponsor retention payments at the time of termination. For
various reasons, including Unit holders' exchanging between
FlexPortfolios, a Trust may be reduced below the Discretionary
Liquidation Amount and could therefore be terminated prior to the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of a Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner 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 amount than might otherwise be
realized if such sale were not required at this time.
If you own at least 1,000 Units of a Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive a distribution of shares of Securities (an "In-
Kind Distribution") (reduced by customary transfer and registration
charges and subject to any additional restrictions imposed by your "Wrap
Fee" plan) rather than the typical cash distribution. You must notify
the Trustee at least ten business days prior to the Mandatory
Termination Date if you elect this In-Kind Distribution option. If you
do not elect to participate in the In-Kind Distribution option, you will
receive a cash distribution from the sale of the remaining Securities,
along with your interest in the Income and Capital Accounts of your
Trust, within a reasonable time after such Trust is terminated.
Regardless of the distribution involved, the Trustee will deduct from
the Trusts any accrued costs, expenses, advances or indemnities provide
by the Indenture, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to pay any
taxes or other governmental charges.
Page 21
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $25 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 1998, the total partners' capital of
Nike Securities L.P. was $18,506,548 (audited).
This information refers only to 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.
The Trustee.
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th Floor, New York, New
York, 10004-2413. If you have questions regarding the Trusts, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee has not participated in selecting the Securities for the
Trusts; it only provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable to Unit holders for taking any
action or for not taking any action in good faith according to the
Indenture. We will also not be accountable for errors in judgment. We
will only be liable for our own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the Trustee's case) or reckless
disregard of our obligations and duties. The Trustee is not liable for
any loss or depreciation when the Securities are sold. If we fail to act
under the Indenture, the Trustee may do so, and the Trustee will not be
liable for any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor Sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trusts, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
However, the Evaluator will not be liable to the Trustee, Sponsor or
Unit holders for errors in judgment.
Page 22
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trusts.
Experts.
Ernst & Young LLP, independent auditors, have audited the Trusts'
statements of net assets, including the schedules of investments, at the
opening of business on the Initial Date of Deposit, as set forth in
their report. We've included the Trusts' statements of net assets,
including the schedules of investments, in the prospectus and elsewhere
in the registration statement in reliance on Ernst & Young LLP's report,
given on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific risk information about the Trusts.
Page 23
FIRST TRUST (registered trademark)
Core Holdings FlexPortfolio, 1999 Fall Series
Pharmaceutical FlexPortfolio, Series 2
FT 363
Sponsor:
NIKE SECURITIES L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
This prospectus contains information relating to the above-mentioned
unit investment trusts, but does not contain all of the information
about this investment company as filed with the Securities and Exchange
Commission in Washington, D.C. under the:
- - Securities Act of 1933 (file no. 333- ) and
- - Investment Company Act of 1940 (file no. 811-05903)
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549-6009
Call: 1-800-SEC-0330
Visit: http://www.sec.gov
__________, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 24
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 363 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing ("Prospectus").
This Information Supplement is dated __________, 1999. 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
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.
Page 1
Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies and are principally traded in foreign currencies. Therefore,
there is a risk that the United States dollar value of these securities
will vary with fluctuations in the U.S. dollar foreign exchange rates
for the various Securities. See "Exchange Rate" below.
On the basis of the best information available to the Sponsor at the
present time, none of the Securities in the Trusts are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trusts of dividends due on, or proceeds
from the sale of, the Securities. However, there can be no assurance
that exchange control regulations might not be adopted in the future
which might adversely affect payment to the Trusts. The adoption of
exchange control regulations and other legal restrictions could have an
adverse impact on the marketability of international securities in the
Trusts and on the ability of the Trusts to satisfy its obligation to
redeem Units tendered to the Trustee for redemption. In addition,
restrictions on the settlement of transactions on either the purchase or
sale side, or both, could cause delays or increase the costs associated
with the purchase and sale of the foreign Securities and correspondingly
could affect the price of the Units.
Investors should be aware that it may not be possible to buy all
Securities at the same time because of the unavailability of any
Security, and restrictions applicable to the Trusts relating to the
purchase of a Security by reason of the federal securities laws or
otherwise.
Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration
requirements of such Act. Sales of non-exempt Securities by a Trust in
the United States securities markets are subject to severe restrictions
and may not be practicable. Accordingly, sales of these Securities by
the Trusts will generally be effected only in foreign securities
markets. Although the Sponsor does not believe that the Trusts will
encounter obstacles in disposing of the Securities, investors should
realize that the Securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as
liquid as those in the United States. The value of the Securities will
be adversely affected if trading markets for the Securities are limited
or absent.
Concentration
Pharmaceutical. An investment in Units of the Pharmaceutical
FlexPortfolio, Series 2 should be made with an understanding of the
characteristics of the pharmaceutical and medical industries and the
risks which such investment may entail.
Pharmaceutical companies are companies involved in drug development and
production services. Such companies have potential risks unique to their
sector of the healthcare field. Such companies are subject to
governmental regulation of their products and services, a factor which
could have a significant and possibly unfavorable effect on the price
and availability of such products or services. Furthermore, such
companies face the risk of increasing competition from generic drug
sales, the termination of their patent protection for drug products and
the risk that technological advances will render their products or
services obsolete. The research and development costs of bringing a drug
to market are substantial and include lengthy governmental review
processes, with no guarantee that the product will ever come to market.
Many of these companies may have losses and not offer certain products
for several years. Such companies may also have persistent losses during
a new product's transition from development to production, and revenue
patterns may be erratic.
The medical sector has historically provided investors with significant
growth opportunities. One of the industries included in the sector is
pharmaceutical companies. Such companies develop, manufacture and sell
prescription and over-the-counter drugs. In addition, they are well
known for the vast amounts of money they spend on world-class research
and development. In short, such companies work to improve the quality of
life for millions of people and are vital to the nation's health and
well-being.
As the population of the United States ages, the companies involved in
the pharmaceutical field will continue to search for and develop new
drugs through advanced technologies and diagnostics. On a worldwide
basis, such companies are involved in the development and distributions
of drugs and vaccines. These activities may make the pharmaceutical
sector very attractive for investors seeking the potential for growth in
their investment portfolio. However, there are no assurances that the
Trust's objectives will be met.
Legislative proposals concerning healthcare are considered from time to
time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of
prescription drugs), national health insurance, incentives for
competition in the provision of healthcare services, tax incentives and
penalties related to healthcare insurance premiums and promotion of pre-
paid healthcare plans. The Sponsor is unable to predict the effect of
any of these proposals, if enacted, on the issuers of Securities in the
Trust.
Page 2
MEMORANDUM
Re: FT 363
The only difference of consequence (except as described
below) between FT 315, which is the current fund, and FT 363, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 315 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 363 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on August 20, 1999.
FT 363
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities August 20, 1999
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of
Nike Securities
Corporation, the
General Partner of
Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 363 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee and First Trust Advisors L.P., as Evaluator
and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5
