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: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES 144
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
E. Title and Amount 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. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee
(as required by Rule 24f-2): $500.00
H. 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.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 144
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED FEBRUARY 28, 1996
First Trust (registered trademark) U.S. Treasury Securities Trust,
Extendible, Series 1
First Trust U.S. Treasury Securities Trust, Short-Intermediate, Series 7
The Trust. The First Trust Special Situations Trust, Series 144 consists
of the underlying separate unit investment trusts set forth above. The
various trusts are collectively referred to herein as the "Trusts."
First Trust U.S. Treasury Securities Trust, Extendible, Series 1 is
individually referred to herein as the "Extendible Trust." First Trust
U.S. Treasury Securities Trust, Short-Intermediate, Series 7 is
individually referred to herein as the "Short-Intermediate Trust." Each
Trust consists of a portfolio of taxable U.S. Treasury Securities that
are backed by the full faith and credit of the United States Government
(including Extension Securities for the Extendible Trust), delivery
statements relating to contracts for the purchase of certain such
securities and an irrevocable letter of credit (the "Securities"). All
of the U.S. Treasury Securities in the Extendible Trust consist of
maturities of approximately one to five years which are "laddered" to
provide staggered maturities of approximately 20% of the portfolio each
year. Approximately once a year until the proceeds of each
maturing Security in the Extendible Trust will be reinvested (an
"Extension") automatically into a then available U.S. Treasury Security
with a maturity of approximately five years (an "Extension Security").
For the last five years of the Extendible Trust, proceeds of maturing
Securities will be distributed to Unit holders as they become available,
returning approximately 20% of the Portfolio in each year. All of the
U.S. Treasury Securities in the Short-Intermediate Trust consist of
maturities of approximately 1-3 years which are "laddered" to return
approximately 40% of the Unit holders' principal in 1997, 40% in 1998
and 20% in 1999.
The objective of each of the Trusts is to obtain safety of capital and
current monthly distributions of interest through an investment in a
fixed portfolio of Securities. The Extendible Trust seeks to reduce Unit
price fluctuations due to changing interest rates by reinvesting the
proceeds of maturing Securities into Extension Securities with
maturities of approximately five years so that the Extendible Trust will
maintain a Portfolio with a weighted average maturity of approximately 2
1/2 years. The Short-Intermediate Trust contains a "laddered" portfolio
to provide flexibility of principal investment with maturities ranging
from 1997 to 1999. The average weighted maturity of the Short-
Intermediate Trust is years.
With the deposit of the Securities in the Trusts on ,
1996, the Initial Date of Deposit, the Sponsor established for each
Trust a percentage relationship between the principal amount of
Securities of specified interest rates and ranges of maturities in the
related Portfolio. From time to time following the Initial Date of
Deposit, the Sponsor may deposit additional Securities in the Trusts and
Units may be continuously offered for sale to the public by means of
this Prospectus resulting in a potential increase in the outstanding
number of Units of a Trust. Any additional Securities deposited in a
Trust will maintain as far as practicable the original percentage
relationship between the principal amounts of Securities of specified
interest rates and ranges of maturities in the original Portfolio of
such Trust.
UNITS OF THE TRUSTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
First Trust (registered trademark)
The date of this Prospectus is , 1996
Page 1
The guaranteed payment of interest and principal afforded by the
Securities may make an investment in the Trusts particularly well suited
for purchase by Individual Retirement Accounts, Keogh Plans, pension
funds and other tax-deferred retirement plans. In addition, the ability
to buy single Units (minimum purchase $1,000, $250 for tax-deferred
retirement plans such as IRA accounts) during the initial offering
period at a Public Offering Price per Unit of approximately $1.00
enables such investors to tailor the dollar amount of their purchases of
Units to take the maximum possible advantage of the annual deductions
available for contributions to such plans. Investors should consult with
their tax advisers before investing. See "Why are Investments in a Trust
Suitable for Retirement Plans?"
STANDARD & POOR'S RATINGS GROUP, A DIVISION OF THE MCGRAW-HILL COMPANIES
("STANDARD & POOR'S") HAS RATED UNITS OF EACH TRUST "AAA." THIS IS THE
HIGHEST RATING ASSIGNED BY STANDARD & POOR'S. SEE "WHAT IS THE RATING OF
THE UNITS?" AND "DESCRIPTION OF STANDARD & POOR'S RATING."
Attention Foreign Investors: Your interest income from the Trusts may be
exempt from federal withholding taxes if you are not a United States
citizen or resident and certain conditions are met. See "What is the
Federal Tax Status of Unit Holders?"
For Information on Estimated Current Return (if applicable) and
Estimated Long-Term Return for the Short-Intermediate Trust, the
Estimated Yield to Next Extension Date for the Extendible Trust and the
estimated life of the portfolio of each of the Trusts, see "Special
Information" for each Trust. Estimated cash flows for the Short-
Intermediate Trust is set forth herein under "Estimated Cash Flows to
Unit Holders."
The Public Offering Price per Unit is equal to the aggregate offering
price of the Securities in the portfolio of a Trust divided by the
number of Units outstanding, plus a sales charge of 1.95% of the Public
Offering Price (1.989% of the net amount invested) for each Trust. In
addition, on transactions entered into for settlement after
, 1996, there will be added an amount equal to accrued interest
from , 1996 to the date of settlement (three business
days after order) less distributions from the Interest Account
subsequent to , 1996. The secondary market Public
Offering Price per Unit will be equal to the aggregate bid price of the
Securities in the portfolio of a Trust divided by the number of Units
outstanding, plus a sales charge of 1.95% of the Public Offering Price
(1.989% of the net amount invested) for each Trust. At the opening of
business on the Initial Date of Deposit, , 1996, the
Public Offering Price per Unit would have been $ for the Extendible
Trust and $ for the Short-Intermediate Trust. The sales charge for
each Trust is reduced on a graduated scale for aggregate sales involving
at least $500,000 for the Extendible Trust and $250,000 for the Short-
Intermediate Trust. See "How is the Public Offering Price Determined?",
particularly for the method of evaluation.
Each Unit represents an undivided interest in the principal and net
income of a Trust in the ratio of one Unit for each $1.00 principal
amount of Securities initially deposited in such Trust.
Distributions of interest received by a Trust will be paid in cash
monthly unless the Unit holder elects to have them automatically
reinvested as described herein. See "How Can Distributions to Unit
Holders be Reinvested?" Monthly distributions from each Trust will be
made on the last day of each month to all Unit holders of record on the
fifteenth day of such month, commencing with the First Distribution on
, 1996 to Unit holders of record on , 1996.
During approximately the first years of the Extendible Trust
(the "Extension Period"), the proceeds from maturing Securities will be
automatically reinvested into new Securities, if available, with
maturities of approximately five years. Thereafter, distributions from
the Principal Account will be made in cash when each remaining Security
in the Extendible Trust matures.
The Sponsor, although not obligated to do so, intends to maintain a
market for the Units of the Trusts at prices based upon the aggregate
offering price of the Securities in the portfolio of a Trust during the
initial offering period and at prices based upon the aggregate bid price
of the Securities in the portfolio of a Trust after the initial offering
period. In the absence of such a market, a Unit holder will nonetheless
be able to dispose of the Units through redemption at prices based upon
the bid prices of the underlying Securities. See "How May Units be
Redeemed?"
Risk Factors. An investment in a Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the volatility of interest rates and, for the Extendible Trust,
the early return of principal if reinvestment is not practical. See
"What is the First Trust Special Situations Trust? - Risk Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
First Trust
U.S. Treasury
Securities Trust,
Extendible,
Series 1
General Information _________________
<S> <C>
Principal Amount of Securities in the Trust $
Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Principal Amount (Par Value) of Securities per Unit $
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $
Aggregate Offering Price Evaluation per Unit $
Sales Charge (1) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit (2) $
Redemption Price per Unit (3) $
Excess of Public Offering Price per Unit Over Redemption Price per Unit $
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date , 1996
Mandatory Termination Date
Discretionary Liquidation Amount A Trust may be terminated if the principal amount thereof is
less than the lower of $1,000,000 or 10% of the total principal
amount of Securities deposited in a Trust during the primary
offering period.
Supervisory Fee (4) Maximum of $ per Unit outstanding annually. (5)
Evaluator's Fee $ per Unit outstanding annually.
Estimated Organizational and
Offering Expenses (6) $ per Unit.
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are
made as of the close of trading
(generally 4:00 p.m. Eastern time) on the New York Stock Exchange on
each day on which it is open.
[FN]
______________
(1) Sales charges for the Trust, expressed as a percentage of the Public
Offering Price per Unit and in parenthesis as a percentage of the
Aggregate Offering Price Evaluation per Unit, are as follows: 1.95%
(1.989%) for Series 1.
(2) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. For purchases
settling on the First Settlement Date, no accrued interest will be added
to the Public Offering Price. After the initial offering period, the
Sponsor's Repurchase Price per Unit, will be determined as described
under the caption "Will There Be a Secondary Market?"
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $0.001 per Unit.
(5) Payable to an affiliate of the Sponsor.
(6) The Trust (and therefore Unit holders ) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registrations statement, the trust indenture and other closing
documents, registering Units with the Securities Exchange Commission and
states, the initial audit of the Trust portfolio and the initial fees
and expenses of the Trustee but not including the expenses incurred in
the printing of preliminary and final prospectuses, and expenses
incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed five years from the Initial Date of
Deposit. See "What are the Expenses and Charges?" and "Statement of Net
Assets." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
First Trust
U.S. Treasury
Securities Trust,
Short-Intermediate,
Series 7
___________________
General Information
<S> <C>
Principal Amount of Securities in the Trust $
Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Principal Amount (Par Value) of Securities per Unit $
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $
Aggregate Offering Price Evaluation per Unit $
Sales Charge (1) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit (2) $
Redemption Price per Unit (3) $
Excess of Public Offering Price per Unit Over Redemption Price per Unit $
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date , 1996
Mandatory Termination Date
Discretionary Liquidation Amount A Trust may be terminated if the principal amount thereof
is less than the lower of $1,000,000 or 10% of the total
principal amount of Securities deposited in a Trust during
the primary offering period.
Supervisory Fee (4) Maximum of $ per Unit outstanding annually. (5)
Evaluator's Fee $ per Unit outstanding annually.
Estimated Organizational and
Offering Expenses (6) $ per Unit.
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are
made as of the close of trading
(generally 4:00 p.m. Eastern time) on the New York Stock Exchange on
each day on which it is open.
[FN]
______________
(1) Sales charges for the Trust, expressed as a percentage of the Public
Offering Price per Unit and in parenthesis as a percentage of the
Aggregate Offering Price Evaluation per Unit, are as follows: 1.95%
(1.989%) for Series 7.
(2) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. For purchases
settling on the First Settlement Date, no accrued interest will be added
to the Public Offering Price. After the initial offering period, the
Sponsor's Repurchase Price per Unit, will be determined as described
under the caption "Will There Be a Secondary Market?"
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $0.001 per Unit.
(5) Payable to an affiliate of the Sponsor.
(6) The Trust (and therefore Unit holders ) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registrations statement, the trust indenture and other closing
documents, registering Units with the Securities Exchange Commission and
states, the initial audit of the Trust portfolio and the initial fees
and expenses of the Trustee but not including the expenses incurred in
the printing of preliminary and final prospectuses, and expenses
incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed five years from the Initial Date of
Deposit. See "What are the Expenses and Charges?" and "Statement of Net
Assets." Historically, the sponsors of unit investment trusts have paid
all the costs of establishing such trusts.
Page 4
First Trust U.S. Treasury Securities Trust, Extendible, Series 1
First Trust U.S. Treasury Securities Trust, Short-Intermediate, Series 7
The First Trust Special Situations Trust, Series 144
What is the First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 144 is one of a series
of investment companies created by the Sponsor under the name of The
First Trust Special Situations Trust, all of which are generally similar
but each of which is separate and is designated by a different series
number. This Series consists of the underlying separate unit investment
trusts designated as: First Trust U.S. Treasury Securities Trust,
Extendible, Series 1 and First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 7 (collectively, the "Trusts" and each
individually a "Trust"). First Trust U.S. Treasury Securities Trust,
Extendible, Series 1 is individually referred to herein as the
"Extendible Trust." First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 7 is individually referred to herein as the "Short-
Intermediate Trust." Each Trust was created under the laws of the State
of New York pursuant to a Trust Agreement (the "Indenture"), dated the
Initial Date of Deposit, with Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank (National Association), as Trustee, Securities
Evaluation Service, Inc., as Evaluator and First Trust Advisors L.P., as
Portfolio Supervisor. On the Initial Date of Deposit, the Sponsor
deposited with the Trustee taxable, interest-bearing U.S. Treasury
Obligations, delivery statements relating to contracts for the purchase
of certain such obligations and irrevocable letters of credit issued by
a financial institution in the amount required for such purchases (the
"Securities") in both the Extendible Trust and the Short-Intermediate
Trust. The Trustee thereafter credited to the account of the Sponsor
documents evidencing the entire ownership of each respective Trust at
the Initial Date of Deposit.
The objective of each Trust is to obtain safety of capital and current
monthly distributions of interest through an investment in a fixed
portfolio of taxable U.S. Treasury Securities. Each Trust contains a
"laddered" portfolio to provide flexibility of principal investment. The
Securities which comprise the Extendible Trust have maturities initially
ranging from one to five years. The Extendible Trust also seeks to
provide an extendible investment by annually reinvesting, until
approximately , the proceeds of maturing Securities into new U.S.
Treasury Securities with maturities of approximately five years. This
reinvestment strategy is designed to produce a higher overall yield than
shorter-term investments with less price volatility than longer-term
investments. The Securities which comprise the Short-Intermediate Trust
have maturities ranging from to .
Each Trust may be an appropriate medium for investors who desire to
participate in a portfolio of taxable fixed income securities offering
the safety of capital provided by securities backed by the full faith
and credit of the United States but who do not wish to invest the
minimum amount which is required for a direct investment in the
Securities. Because regular payments of principal are to be received in
accordance with the "laddered" maturities of the Securities (during the
last five years of the Extendible Trust) and certain Securities may be
sold under circumstances described herein, and because additional
Securities (including Extension Securities for the Extendible Trust) may
be deposited in the Trusts as described herein, the Trusts are not
expected to retain their present size and composition. Units will remain
outstanding until redeemed upon tender to the Trustee by any Unit holder
(which may include the Sponsor) or until the termination of a Trust
pursuant to the Indenture.
Many investors in the Extendible Trust and the Short-Intermediate Trust
may benefit from the exemption of interest income from state and local
personal income taxes that will pass through the Trusts to Unit holders
in all states. Each Trust has the additional purpose of providing income
which is exempt from withholding for U.S. Federal income taxes for non-
resident alien investors providing certain conditions are met. A foreign
investor must provide a completed W-8 Form to his financial
representative or the Trustee to avoid withholding on his account.
In selecting the Securities for deposit in the Trusts, the following
factors, among others, were considered by the Sponsor: (i) the types of
such securities available; (ii) the prices and yields of such securities
relative to other comparable securities, including the extent to which
such securities are trading at a premium or at a discount from par;
Page 5
(iii) whether the Securities were issued after July 18, 1984; and (iv)
the maturities of such securities. See "Portfolio" for each Trust for
information with respect to the Securities initially selected for
deposit in the Trusts.
Extensions. The initial Portfolio of the Extendible Trust consists of
U.S. Treasury Securities with "laddered" maturities of approximately one
to five years. Therefore, approximately 20% of the initial Portfolio
matures approximately once a year. The Sponsor is authorized to direct
the reinvestment of the proceeds of each maturing Security into
Extension Securities. Extensions of approximately 20% of the Portfolio
at each maturity of Securities will continue through approximately
(the "Extension Period") and, assuming the Extendible Trust does
not terminate prior thereto, it is anticipated that there will be
Extensions.
"Extension Securities" means Securities (i) issued by the U.S.
Treasury; (ii) with a fixed maturity date that is within three months of
the fifth anniversary of the maturity date of the Security the proceeds
of which are being reinvested in the Extension Security; (iii) purchased
at par or, in order of preference, at a discount to, or premium over,
par as close to par as practicable; (iv) that would not cause the
Extendible Trust to cease to be rated in the category AAA by Standard &
Poor's; and (v) that are not when, as and if issued obligations. The
purchase of Extension Securities will not disqualify the Extendible
Trust as a "regulated investment company" under the Code.
The guidelines under which the Extendible Trust will purchase Extension
Securities take into account price and maturity date. Whenever a U.S.
Treasury Security in the Extendible Trust's portfolio matures, the
Extendible Trust's buyers (which may include the Sponsor which will
charge a normal and customary brokerage fee) will purchase the most
currently available 5-year U.S. Treasury Security at par. If no
obligations are available at par, the buyer will select obligations with
a price as close as possible to par. To preserve the Extendible Trust's
par values, there will be a bias favoring discounts, when available.
Therefore, discounted obligations will be selected so long as the
discount is not more than three times the smaller premium available.
That is, assuming no maturity date differences, if there is an
obligation available at a price of $100.125, no alternative obligation
will be selected at less than $99.625. If obligations mature at
different dates within the three months permissible, in determining
which obligations to purchase the Extendible Trust's buyers will
increase the premium or discount of the bond by 25 cents (1/4 point) for
every month away from the precise five year maturity date of the
original obligation being extended. There will be no attempt to delay
the purchase of the Extension Securities to take advantage of market
movements.
The Portfolio of a Trust may contain Securities which were (or may be in
the case of Extension Securities) acquired at a market discount. Such
Securities trade at less than par value because the interest coupons
thereon are lower than interest coupons on comparable debt securities
being issued at currently prevailing interest rates. If such interest
rates for newly issued and otherwise comparable securities increase, the
market discount of previously issued securities will become greater, and
if such interest rates for newly issued comparable securities decline,
the market discount of previously issued securities will be reduced,
other things being equal. Investors should also note that the value of
Securities purchased at a market discount will increase in value faster
than Securities purchased at a market premium if interest rates
decrease. Conversely, if interest rates increase the value of Securities
purchased at a market discount will decrease faster than Securities
purchased at a premium. Market discount attributable to interest changes
does not indicate a lack of market confidence in the issue. Neither the
Sponsor nor the Trustee shall be liable in any way for any default,
failure or defect in any of the Securities.
The Portfolio of a Trust may contain U.S. Treasury Obligations which
have been (or may be in the case of Extension Securities) stripped of
their unmatured interest coupons. The zero coupon Securities evidence
the right to receive a fixed payment at a future date from the U.S.
Government, and are backed by the full faith and credit of the U.S.
Government. Zero coupon Securities are purchased at a deep discount
because the buyer obtains only the right to a fixed payment at a fixed
date in the future and does not receive any periodic interest payments.
The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon Securities) is that a fixed
yield is earned not only on the original investment, but also, in
effect, on all earnings during the life of the discount obligation. This
Page 6
implicit reinvestment of earnings at the same rate eliminates the risk
of being unable to reinvest the income on such obligations at a rate as
high as the implicit yield on the discount obligation, but at the same
time eliminates the holder's ability to reinvest at higher rates in the
future. For this reason, the zero coupon Securities are subject to
substantially greater price fluctuations during periods of changing
interest rates than are securities of comparable quality which make
regular interest payments.
The Portfolio of a Trust may contain Securities which were (or may be in
the case of Extension Securities) acquired at a market premium. Such
Securities trade at more than par value because the interest coupons
thereon are higher than interest coupons on comparable debt securities
being issued at currently prevailing interest rates. If such interest
rates for newly issued and otherwise comparable securities decrease, the
market premium of previously issued securities will be increased, and if
such interest rates for newly issued comparable securities increase, the
market premium of previously issued securities will be reduced, other
things being equal. The current returns of securities trading at a
market premium are initially higher than the current returns of
comparably rated debt securities of a similar type issued at currently
prevailing interest rates because premium securities tend to decrease in
market value as they approach maturity when the face amount becomes
payable. Market premium attributable to interest changes does not
indicate market confidence in the issue.
The contracts to purchase Securities delivered to the Trustee represent
an obligation by issuers or dealers to deliver Securities to the Sponsor
for deposit in a Trust. Contracts are typically settled and the
Securities delivered within a few business days subsequent to the
Initial Date of Deposit. The percentage of the aggregate principal
amount of the Securities, if any, relating to "when, as and if issued"
Securities or other Securities with delivery dates after the date of
settlement for a purchase made on the Initial Date of Deposit is
indicated in the Portfolio for a Trust. Interest on "when, as and if
issued" and delayed delivery Securities begins accruing to the benefit
of Unit holders on their dates of delivery. Because "when, as and if
issued" Securities have not yet been issued, as of the Initial Date of
Deposit a Trust is subject to the risk that the issuers thereof might
decide not to proceed with the offering of such Securities or that the
delivery of such Securities or the delayed delivery Securities may be
delayed. If such Securities, or replacement securities described below,
are not acquired by a Trust or if their delivery is delayed, the
Estimated Yield to Next Extension Date for the Extendible Trust and the
Estimated Returns for the Short-Intermediate Trust as set forth under
"Special Information" may be reduced.
In the event of a failure to deliver any Securities that have been
purchased for a Trust under a contract ("Failed Securities"), the
Sponsor is authorized under the Indenture to direct the Trustee to
acquire other specified securities ("Replacement Securities") to make up
the original corpus of a Trust. The Replacement Securities must be
purchased within 20 days after delivery of the notice of the failed
contract and the purchase price (exclusive of accrued interest) may not
exceed the amount of funds reserved for the purchase of the Failed
Securities. The Replacement Securities (i) must satisfy the criteria
previously described for Securities originally included in a Trust, (ii)
must maintain as far as practicable the original percentage relationship
between the principal amounts of Securities of specified interest rates
and years of maturities in a Portfolio, and (iii) shall not be "when, as
and if issued" securities. Whenever Replacement Securities have been
acquired for a Trust, the Trustee shall, within five days thereafter,
notify all Unit holders of such Trust of the acquisition of the
Replacement Securities and shall, on the next monthly distribution date
which is more than 30 days thereafter, make a pro rata distribution of
the amount, if any, by which the cost to the affected Trust of the
Failed Securities exceeded the cost of the Replacement Securities plus
accrued interest. Except as provided below, once the original corpus of
a Trust is acquired, the Trustee will have no power to vary the
investment of a Trust, i.e., the Trustee will have no managerial power
to take advantage of market variations to improve a Unit holder's
investment.
If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor shall refund the principal and
accrued interest (at the coupon rate of the relevant Securities to the
date the Sponsor is notified of the failure) attributable to such failed
contract and the pro rata portion of the sales charge attributable to
such failed contract not more than thirty days after the determination
of such failure or at such earlier time as the Trustee in its sole
discretion deems to be in the interest of the Unit holders. Unit holders
should be aware that at the time of the receipt of such refunded
principal they may not be able to reinvest such principal in other
Page 7
securities at a yield equal to or in excess of the yield which such
principal would have earned for Unit holders had the Failed Securities
been delivered to a Trust.
The Sponsor may, from time to time, deposit additional Securities in a
Trust (while additional Units are to be offered to the public)
maintaining, as close as practicable, the original percentage
relationship between the principal amounts of Securities (including
Extension Securities for the Extendible Trust) of specified interest
rates and years of maturities in the Portfolio of such Trust. With
respect to the Short-Intermediate Trust, the Sponsor has the limited
right to direct the Trustee to purchase additional securities, which
must satisfy the criteria previously described for Securities originally
included in the Trust, with moneys held in the Principal Account of the
Trust representing the proceeds of Securities sold as described under
the caption "How May Securities be Removed from a Trust?" or the
proceeds of Securities sold which proceeds are not required for the
purpose of redemption of Units. In addition, through approximately the
first years of the Extendible Trust the Sponsor will reinvest the
proceeds of maturing Securities into Extension Securities with
maturities of approximately five years and at prices at or close to par,
if possible. If appropriate Extension Securities are not available in
any of those years, and in each year subsequent to the Extension Period
in which a Security matures, the proceeds will be distributed to the
Unit holders upon maturity of the Securities (see "What is the First
Trust Special Situations Trust?-Extensions").
Each Unit initially offered represents the fractional undivided interest
in a Trust set forth in the "Summary of Essential Information." To the
extent that any Units are redeemed by the Trustee, the fractional
undivided interest in a Trust represented by each unredeemed Unit will
increase, although the actual interest in such Trust represented by such
fraction will remain substantially unchanged. However, if additional
Units are issued by a Trust (in connection with the deposit by the
Sponsor of additional Securities), the aggregate value of Securities in
such Trust will be increased by amounts allocable to additional Units,
and the fractional undivided interest represented by each Unit in the
balance will be decreased. Units will remain outstanding until redeemed
upon tender to the Trustee by any Unit holder, which may include the
Sponsor, or until the termination of the Indenture.
Risk Factors
The Securities are direct obligations of the United States and are
backed by its full faith and credit although the Units of a Trust are
not so backed. The Securities are not rated but in the opinion of the
Sponsor have credit characteristics comparable to those of securities
rated "AAA" by nationally recognized rating agencies.
An investment in Units of a Trust should be made with an understanding
of the risks which an investment in fixed rate debt obligations may
entail, including the risk that the value of the Securities and hence
the Units will decline with increases in interest rates. The high
inflation of prior years, together with the fiscal measures adopted to
attempt to deal with it, have resulted in wide fluctuations in interest
rates and, thus, in the value of fixed rate debt obligations generally.
The Sponsor cannot predict whether such fluctuations will continue in
the future. U.S. Treasury Securities are not affected by credit risk but
are subject to changes in market value resulting from changes in
interest rates. Therefore, an investment in Units of the Trusts should
be made with an understanding of the risks which an investment in fixed-
rate short and intermediate term debt obligations may entail, including
the risk that the value of the Portfolio and hence of the Units will
decline with increases in interest rates. Extendible Trust Unit holders
should also understand that while the weighted average maturity of the
Portfolio is approximately 21/2 years, until approximately
it will range from a low of 2 years to a high of 3 years, depending on
the time to the next extension date.
What is the Rating of the Units?
Standard & Poor's has rated the Units of each Trust "AAA." This is the
highest rating assigned by Standard & Poor's. See "Description of
Standard & Poor's Rating." The obtaining of this rating by a Trust
should not be construed as an approval of the offering of the Units by
Standard & Poor's or as a guarantee of the market value of a Trust or
the Units. Standard & Poor's has indicated that this rating is not a
recommendation to buy, hold or sell Units nor does it take into account
the extent to which expenses of a Trust or sales by a Trust of
Securities for less than the purchase price paid by a Trust will reduce
Page 8
payment to Unit holders of the interest and principal required to be
paid on such Securities. There is no guarantee that the "AAA" investment
rating with respect to the Units will be maintained. Standard & Poor's
will be compensated by the Sponsor for its services in rating Units of a
Trust.
What are Estimated Returns?
Debt securities are customarily offered to investors on a "yield price"
basis (as contrasted to a "dollar price" basis) at the lesser of the
price as computed to maturity of such debt security or to an earlier
redemption date. Since Units of each Trust are offered on a dollar price
basis, the estimated rate of return on an investment in Units of a Trust
is stated in terms of "Estimated Yield to Next Extension Date" for the
Extendible Trust and "Estimated Current Return and Estimated Long-Term
Return" for the Short-Intermediate Trust.
At the opening of business on the Initial Date of Deposit, the Estimated
Yield to Next Extension Date for the Extendible Trust and the Estimated
Current Return (if applicable) and the Estimated Long-Term Return for
the Short-Intermediate Trust are as set forth in the "Special
Information" herein for each Trust. Estimated Current Return is computed
by dividing the Estimated Net Annual Interest Rate per Unit by the
Public Offering Price per Unit. The Estimated Net Annual Interest Rate
per Unit will vary with changes in fees and expenses of the Trustee and
the Evaluator and with the principal prepayment, redemption, maturity,
exchange or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Current Return does not
take into account timing of distributions of income and other amounts
(including delays in distribution to Unit Holders), and it only
partially reflects the effects of premiums paid and discounts realized
in the purchase price of Units.
Unlike Estimated Current Return, Estimated Long-Term Return is a measure
of the estimated return to the investor earned over the estimated life
of a Trust. The Estimated Long-Term Return represents an average of the
yields to estimated retirements of the Securities in a Trust and
adjusted to reflect a compounding factor, expenses and sales charges.
Estimated Yield to Next Extension Date shows the net annual yield to
investors from the date of purchase of Units until the Next Extension
Date (i.e., the next date on which approximately 20% of the face value
of the Portfolio matures). In calculating Estimated Yield to Next
Extension Date, the average yield for the Portfolio is derived by
weighting each Security's yield by the market value of the Security (but
not by the time remaining to maturity). Once the average Portfolio yield
is computed, this figure is then adjusted for estimated expenses and the
effect of the applicable sales charge paid by investors. Estimated Yield
to Next Extension Date does not take into account timing of
distributions of income and other amounts (including delays in
distribution to Unit holders), and it only partially reflects the
effects of premiums paid and discounts realized in the purchase price of
Units.
Estimated Current Return (if applicable), Estimated Long-Term Return and
Estimated Yield to Next Extension Date are all subject to fluctuation
with changes in the compositions of the Portfolio of a Trust and changes
in market value of the underlying Securities and changes in fees and
expenses, including sales charges, and therefore can be materially
different than the figures set forth in "Special Information" herein for
each Trust. In addition, return figures may not be directly comparable
to yield figures used to measure other investments, and since return
figures are based on certain assumptions and variables, the actual
returns received by a Unit holder may be higher or lower.
In order to acquire certain of the Securities contracted for by the
Sponsor for deposit in a Trust, it may be necessary to pay on the
settlement dates for delivery of such Securities amounts covering
accrued interest on such Securities which exceed the amounts furnished
by the Sponsor. The Trustee has agreed to pay for any amounts necessary
to cover any such excess and will be reimbursed therefor, without
interest, when funds become available from interest payments on the
particular Securities with respect to which such payments have been made.
Record Dates for distributions of interest are the fifteenth day of each
month. The Distribution Dates for distributions of interest are the last
day of such month.
Page 9
How is Accrued Interest Treated?
Accrued interest is the accumulation of unpaid interest on a security
from the last day on which interest thereon was paid. Interest on
Securities in a Trust generally is paid semi-annually, although the
Trust accrues such interest daily. Because of this, the Trust always has
an amount of interest earned but not yet collected by the Trustee. For
this reason, with respect to sales settling subsequent to the First
Settlement Date, the Public Offering Price of Units will have added to
it the proportionate share of accrued interest to the date of
settlement. Unit holders will receive on the next distribution date of a
Trust the amount, if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price in
the sale of Units to the public, the Trustee will advance the amount of
accrued interest as of the First Settlement Date and the same will be
distributed to the Sponsor as the Unit holder of record as of the First
Settlement Date. Consequently, the amount of accrued interest to be
added to the Public Offering Price of Units will include only accrued
interest from the First Settlement Date to the date of settlement less
any distributions from the Interest Account subsequent to the First
Settlement Date. See "Rights of Unit Holders - How are Interest and
Principal Distributed?"
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of
interest actually received by a Trust and distributed to Unit holders.
Therefore, there will always remain an item of accrued interest that is
added to the value of the Units. If a Unit holder sells or redeems all
or a portion of his Units, he will be entitled to receive his
proportionate share of accrued interest from the purchaser of his Units.
Since the Trustee has the use of the funds held in the Interest Account
for distributions to Unit holders and since such Account is non-interest
bearing to Unit holders, the Trustee benefits thereby.
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trusts, for which the Sponsor will be reimbursed in
amounts as set forth under "Summary of Essential Information," the
Sponsor will not receive any fees in connection with its activities
relating to the Trusts. Such bookkeeping and administrative charges may
be increased without approval of the Unit holders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor. The fees payable to the Sponsor for such
services may exceed the actual costs of providing such services for
these Trusts, but at no time will the total amount received for such
services rendered to all unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate cost to
the Sponsor of supplying such services in such year. First Trust
Advisors L.P., an affiliate of the Sponsor, will receive an annual
supervisory fee, which is not to exceed the amount set forth under
"Summary of Essential Information," for providing portfolio supervisory
services for each Trust. The fee may exceed the actual costs of
providing such supervisory services for these Trusts, but at no time
will the total amount received for portfolio supervisory services
rendered to all unit investment trusts of which Nike Securities L.P. is
the Sponsor in any calendar year exceed the aggregate cost to First
Trust Advisors L.P. of supplying such services in such year. In
providing such supervisory services, the Portfolio Supervisor may
purchase research services from a variety of sources which may include
underwriters or dealers of the Trusts.
For purposes of evaluation of the Securities in a Trust, the Evaluator
will receive a fee as indicated in "Summary of Essential Information."
The Trustee pays certain expenses of the Trusts for which it is
reimbursed by each Trust. The Trustee will receive for its ordinary
recurring services to each Trust an annual fee as indicated in "Special
Information." For a discussion of the services performed by the Trustee
pursuant to its obligations under the Indenture, reference is made to
the material set forth under "Rights of Unit Holders." The Trustee's and
Evaluator's fees are payable monthly on or before each Distribution Date
from the Interest Account to the extent funds are available and then
from the Principal Account. Since the Trustee has the use of the funds
being held in the Principal and Interest Accounts for future
distributions, payment of expenses and redemptions and since such
Accounts are non-interest bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to a Trust
Page 10
is expected to result from the use of these funds. Both fees may be
increased without approval of the Unit holders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States
Department of Labor.
Expenses incurred in establishing the Trusts, including costs of
preparing the registration statement, the trust indenture and other
closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio and the
initial fees and expenses of the Trustee and any other out-of-pocket
expenses, will be paid by the Trusts and charged off over a period not
to exceed the lesser of five years from a Trust's Initial Date of
Deposit or a Trust's Mandatory Termination Date. The following
additional charges are or may be incurred by a Trust: all legal expenses
of the Trustee incurred by or in connection with its responsibilities
under the Indenture; the expenses and costs of any action undertaken by
the Trustee to protect such Trust and the rights and interests of the
Unit holders; fees of the Trustee for any extraordinary services
performed under the Indenture; indemnification of the Trustee for any
loss, liability or expense incurred by it without negligence, bad faith
or willful misconduct on its part, arising out of or in connection with
its acceptance or administration of such Trust; indemnification of the
Sponsor for any loss, liability or expense incurred without gross
negligence, bad faith or willful misconduct in acting as Depositor of
such Trust; all taxes and other government charges imposed upon the
Securities or any part of such Trust (no such taxes or charges are being
levied or made or, to the knowledge of the Sponsor, contemplated). The
above expenses and the Trustee's annual fee, when paid or owing to the
Trustee, are secured by a lien on a Trust. In addition, the Trustee is
empowered to sell Securities in a Trust in order to make funds available
to pay all these amounts if funds are not otherwise available in the
Interest and Principal Accounts of such Trust. Due to the minimum
principal amount in which Securities may be required to be sold, the
proceeds of such sales may exceed the amount necessary for the payment
of such fees and expenses.
Unless the Sponsor determines that such an audit is not required, the
Indenture requires the accounts of a Trust shall be audited on an annual
basis at the expense of such Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market for
Units, the Sponsor shall bear the cost of such annual audits to the
extent such cost exceeds $0.50 per 100 Units. Unit holders of a Trust
covered by an audit may obtain a copy of the audited financial
statements from the Trustee upon request.
What is the Tax Status of Unit Holders?
Grantor Trust
In the opinion of Chapman and Cutler, counsel for the Sponsor, under
existing law:
1. The Short-Intermediate Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder will be
treated as the owner of a pro rata portion of such Trust under the
Internal Revenue Code (the "Code") and income of such Trust will be
treated as the income of the Unit holders under the Code. Each Unit
holder will be considered to have received his or her pro rata share of
income derived from each Trust asset when such income is received by the
Short-Intermediate Trust.
2. Each Unit holder will have a taxable event when the Short-
Intermediate Trust disposes of a Security, or when the Unit holder
redeems or sells his Units. Unit holders must reduce the tax basis of
their Units for their share of accrued interest received by the Short-
Intermediate Trust, if any, on Securities delivered after the Unit
holders pay for their Units to the extent that such interest accrued on
such Securities during the period from the Unit holder's settlement date
to the date such Securities are delivered to the Short-Intermediate
Trust and, consequently, such Unit holders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such
Units. Gain or loss upon the sale or redemption of Units is measured by
comparing the proceeds of such sale or redemption with the adjusted
basis of the Units. If the Trustee disposes of Securities (whether by
sale, payment on maturity, redemption or otherwise), gain or loss is
recognized to the Unit holder. The amount of such gain or loss is
measured by comparing the Unit holder's pro rata share of the total
proceeds from such disposition with the Unit holder's basis for his or
Page 11
her fractional interest in the asset disposed of. In the case of a Unit
holder who purchases Units, such basis (before adjustment for earned
original issue discount, amortized bond premium and accrued market
discount (if the Unit holder has elected to include such market discount
in income as it accrues), if any) is determined by apportioning the cost
of the Units among each of the Short-Intermediate Trust's assets ratably
according to value as of the date of acquisition of the Units. The tax
cost reduction requirements of the Code relating to amortization of bond
premium may, under some circumstances, result in the Unit holder
realizing a taxable gain when his Units are sold or redeemed for an
amount equal to or less than his original cost.
3. The Short-Intermediate Trust may contain certain "zero coupon"
Securities (the "Stripped Treasury Securities") that are treated as
bonds that were originally issued at an original issue discount
provided, pursuant to a Treasury Regulation (the "Regulation") issued on
December 28, 1992, that the amount of original issue discount determined
under Section 1286 of the Code is not less than a "de minimis" amount as
determined thereunder. Because the Stripped Treasury Securities
represent interests in "stripped" U.S. Treasury bonds, a Unit holder's
initial cost for his pro rata portion of each Stripped Treasury Security
held by the Short-Intermediate Trust (determined at the time he acquires
his Units, in the manner described above) shall be treated as its
"purchase price" by the Unit holder. Original issue discount is
effectively treated as interest for Federal income tax purposes, and the
amount of original issue discount in this case is generally the
difference between the bond's purchase price and its stated redemption
price at maturity. A Unit holder will be required to include in gross
income for each taxable year the sum of his daily portions of original
issue discount attributable to the Stripped Treasury Securities held by
the Short-Intermediate Trust as such original issue discount accrues and
will, in general, be subject to Federal income tax with respect to the
total amount of such original issue discount that accrues for such year
even though the income is not distributed to the Unit holders during
such year to the extent it is not less than a "de minimis" amount as
determined under the Regulation. To the extent that the amount of such
discount is less than the respective "de minimis" amount, such discount
shall be treated as zero. In general, original issue discount accrues
daily under a constant interest rate method which takes into account the
semi-annual compounding of accrued interest. In the case of the Stripped
Treasury Securities, this method will generally result in an increasing
amount of income to the Unit holders each year. Unit holders should
consult their tax advisers regarding the Federal income tax consequences
and accretion of original issue discount.
4. The Unit holder's aliquot share of the total proceeds received on
the disposition of, or principal paid with respect to, a Security held
by the Short-Intermediate Trust will constitute ordinary income (which
will be treated as interest income for most purposes) to the extent it
does not exceed the accrued market discount on such Security that has
not previously been included in taxable income by such Unit holder. A
Unit holder may generally elect to include market discount in income as
such discount accrues. In general, market discount is the excess, if
any, of the Unit holder's pro rata portion of the outstanding principal
balance of a Security over the Unit holder's initial tax cost for such
pro rata portion, determined at the time such Unit holder acquires his
Units. However, market discount with respect to any Security will
generally be considered zero if it amounts to less than 0.25% of the
obligation's stated redemption price at maturity times the number of
years to maturity. The market discount rules do not apply to Stripped
Treasury Securities because they are stripped debt instruments subject
to special original issue discount rules as discussed above. If a Unit
holder sells his Units, gain, if any, will constitute ordinary income to
the extent of the aggregate of the accrued market discount on the Unit
holder's pro rata portion of each Security that is held by the Short-
Intermediate Trust that has not previously been included in taxable
income by such Unit holder. In general, market discount accrues on a
ratable basis unless the Unit holder elects to accrue such discount on a
constant interest rate basis. However, a Unit holder should consult his
own tax adviser regarding the accrual of market discount. The deduction
by a Unit holder for any interest expense incurred to purchase or carry
Units will be reduced by the amount of any accrued market discount that
Page 12
has not yet been included in taxable income by such Unit holder. In
general, the portion of any interest expense which is not currently
deductible would be ultimately deductible when the accrued market
discount is included in income.
5. The Code provides that "miscellaneous itemized deductions" are
allowable only to the extent that they exceed two percent of an
individual taxpayer's adjusted gross income. Miscellaneous itemized
deductions subject to this limitation under present law include a Unit
holder's pro rata share of expenses paid by the Short-Intermediate
Trust, including fees of the Trustee and the Evaluator but does not
include amortizable bond premium on Securities held by the Short-
Intermediate Trust.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to a 28%
maximum stated rate for taxpayers other than corporations. Because some
or all capital gains are taxed at a comparatively lower rate under the
Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
A Unit holder of the Short-Intermediate Trust who is not a citizen or
resident of the United States or a United States domestic corporation (a
"Foreign Investor") will not be subject to U.S. Federal income taxes,
including withholding taxes on amounts distributed from the Short-
Intermediate Trust (including any original issue discount) on, or any
gain from the sale or other disposition of, his Units or the sale or
disposition of any Securities by the Trustee, provided that (i) the
interest income or gain is not effectively connected with the conduct by
the Foreign Investor of a trade or business within the United States,
(ii) with respect to any gain, the Foreign Investor (if an individual)
is not present in the United States for 183 days or more during the
taxable year, and (iii) the Foreign Investor provides the required
certification of his status and of the matters contained in clauses (i)
and (ii) above, and further provided that the exemption from withholding
for U.S. Federal income taxes for interest on any U.S. Securities shall
only apply to the extent the Securities were issued after July 18, 1984.
Amounts otherwise distributable by the Short-Intermediate Trust to a
Foreign Investor will generally be subject to withholding taxes under
Section 1441 of the Code unless the Unit holder timely provides his
financial representative or the Trustee with a statement that (i) is
signed by the Unit holder under penalties of perjury, (ii) certifies
that such Unit holder is not a United States person, or in the case of
an individual, that he is neither a citizen nor a resident of the United
States, and (iii) provides the name and address of the Unit holder. The
statement may be made, at the option of the person otherwise required to
withhold, on Form W-8 or on a substitute form that is substantially
similar to Form W-8. If the information provided on the statement
changes, the beneficial owner must so inform the person otherwise
required to withhold within 30 days of such change.
Each Unit holder (other than a foreign investor who has properly
provided the certifications described in the preceding paragraph) will
be requested to provide the Unit holder's taxpayer identification number
to the Trustee and to certify that the Unit holder has not been notified
that payments to the Unit holder are subject to back-up withholding. If
the proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Short-Intermediate
Trust to such Unit holder will be subject to back-up withholding.
Investment in the Short-Intermediate Trust may be particularly well
suited for purchase by funds and accounts of individual investors that
are exempt from Federal income taxes such as Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans (see "Why are Investments in a Trust Suitable for Retirement
Plans?").
The foregoing discussions relate only to Federal income taxes on
distributions by the Short-Intermediate Trust. Foreign holders should
consult their own tax advisers with respect to the foreign and United
States Federal income tax consequences of ownership of Units.
The Sponsor believes that Unit holders who are individuals will not be
subject to any state personal income taxes on the interest received by
the Short-Intermediate Trust and distributed to them. However, Unit
holders (including individuals) may be subject to state and local taxes
on any capital gains (or market discount treated as ordinary income)
derived from the Short-Intermediate Trust and to other state and local
Page 13
taxes (including corporate income or franchise taxes, personal property
or intangible taxes, and estate or inheritance taxes) on their Units or
the income derived therefrom. In addition, individual Unit holders (and
any other Unit holders which are not subject to state and local taxes on
the interest income derived from the Short-Intermediate Trust) will
probably not be entitled to a deduction for state and local tax purposes
for their share of the fees and expenses paid by the Short-Intermediate
Trust, for any amortized bond premium or for any interest on
indebtedness incurred to purchase or carry their Units. Therefore, even
though the Sponsor believes that interest income from the Short-
Intermediate Trust is exempt from state personal income taxes in all
states, Unit holders should consult their own tax advisers with respect
to state and local taxation of the purchase, ownership and disposition
of Units.
It should be remembered that even if distributions are reinvested
through the Distribution Reinvestment Option they are still treated as
distributions for income tax purposes (see "How Can Distributions to
Unit Holders be Reinvested?").
Regulated Investment Company
The Extendible Trust, which is an association taxable as a corporation
under the Internal Revenue Code, intends to qualify for and elect tax
treatment as a regulated investment company under the Internal Revenue
Code of 1986, as amended (the "Code"). By qualifying for and electing
such treatment, the Extendible Trust will not be subject to Federal
income tax on taxable income or net capital gains distributed to Unit
holders. Under the Code, an excise tax is imposed on the Extendible
Trust to the extent such Trust fails to timely distribute specified
percentages of the Trust's net investment income and capital gain net
income. The Extendible Trust intends to timely distribute taxable income
and capital gains to avoid the imposition of such tax.
The Extendible Trust intends to file its Federal income tax return on a
calendar year basis. In any taxable year of the Extendible Trust, the
distributions of the Trust's income, other than distributions which are
designated as capital gain dividends, will constitute dividends taxable
as ordinary income to the Unit holders to the extent that the amount of
such distributions do not exceed the current and accumulated earnings
and profits of the Extendible Trust. Distributions will not be eligible
for the dividends received deduction for corporations. Under the Code,
certain miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted
gross income. Miscellaneous itemized deductions subject to this
limitation under present law do not include expenses incurred by the
Extendible Trust as long as the Units of a Trust are held by or for 500
or more persons at all times during the taxable year. In the event the
Units of a Trust are held by fewer than 500 persons, additional taxable
income will be realized by the individual Unit holders in excess of the
distributions received from the Trust.
Distributions by the Extendible Trust that are designated by it as
capital gain dividends will be taxable to Unit holders as long-term
capital gains, regardless of the length of time the Units have been held
by a Unit holder. However, if a Unit holder receives a long-term capital
gain dividend (or is allocated a portion of the Trust's undistributed
long-term capital gain) and sells his Units at a loss prior to holding
them for 6 months, such loss will be recharacterized as long-term
capital loss to the extent of such long-term capital gain received as a
dividend or allocated to a Unit holder. Distributions in partial
liquidation reflecting the proceeds of prepayments, redemptions,
maturities (including monthly mortgage payments of principal) or sales
of Securities (exclusive of net capital gain) will not be taxable to
Unit holders to the extent that they represent a return of capital for
tax purposes. The portion of distributions which represents a return of
capital will, however, reduce a Unit holder's basis in his Units, and to
the extent they exceed the basis of his Units will be taxable as a
capital gain. A Unit holder will realize a taxable gain or loss when his
Units are sold or redeemed for an amount different from his original
cost after reduction for previous distributions to the extent that they
represented a return of capital. Provided that Units constitute capital
assets in the hands of a Unit holder, such gain or loss will constitute
either a long-term or short-term capital gain or loss depending upon the
length of time the Unit holder has held his Units. For taxpayers other
than corporations, net capital gains are presently subject to a maximum
stated marginal tax rate of 28 percent.
Page 14
If a Security has been purchased by the Extendible Trust at a market
discount (i.e., for a purchase price less than its outstanding principal
amount), a portion of each payment of principal on the Security will
constitute ordinary income to the Extendible Trust to the extent of any
accrued market discount. In the case of a Security, the amount of market
discount that is deemed to accrue each month shall generally be the
amount of discount that bears the same ratio to the total amount of
remaining market discount that the amount of interest paid during the
accrual period (each month) bears to the total amount of interest
remaining to be paid on the Security as of the beginning of the accrual
period.
Each Unit holder of the Extendible Trust shall receive an annual
statement describing the tax status of the distributions paid by the
Extendible Trust.
Investment in the Extendible Trust may be particularly well suited for
purchase by funds and accounts of individual investors that are exempt
from Federal income taxes such as Individual Retirement Accounts, Keogh
Plans, pension funds and other tax-deferred retirement plans. (See "Why
are Investments in a Trust Suitable for Retirement Plans?")
The foregoing discussions relate only to Federal income taxes on
distributions by the Extendible Trust; such distributions may also be
subject to state and local taxation. Unit holders should consult their
own tax advisers regarding questions of state and local taxation
applicable to the Units. Foreign holders should consult their own tax
advisers with respect to United States Federal income tax consequences
of ownership of Units.
The Sponsor believes that Unit holders who are individuals will not be
subject to any state personal income taxes on the interest received by
the Extendible Trust and distributed to them. However, Unit holders
(including individuals) may be subject to state and local taxes on any
capital gains (or market discount treated as ordinary income) derived
from the Extendible Trust and to other state and local taxes (including
corporate income or franchise taxes, personal property or intangible
taxes, and estate or inheritance taxes) on their Units or the income
derived therefrom. In addition, individual Unit holders (and any other
Unit holders which are not subject to state and local taxes on the
interest income derived from the Extendible Trust) will probably not be
entitled to a deduction for state and local tax purposes for their share
of the fees and expenses paid by the Extendible Trust, for any amortized
bond premium or for any interest on indebtedness incurred to purchase or
carry their Units. Therefore, even though the Sponsor believes that
interest income from the Extendible Trust is exempt from state personal
income taxes in all states, Unit holders should consult their own tax
advisers with respect to state and local taxation of the purchase,
ownership and disposition of Units.
It should be remembered that even if distributions are reinvested
through the Distribution Reinvestment Option they are still treated as
distributions for income tax purposes (see "How Can Distributions to
Unit Holders be Reinvested?").
Why are Investments in a Trust Suitable for Retirement Plans?
A Trust may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans. Generally, the Federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Each Trust will waive the $1,000 minimum investment requirement for tax-
deferred retirement plan accounts. The minimum investment is $250 for
tax-deferred retirement plans such as IRA accounts. Fees and charges
with respect to such plans may vary.
How Can Distributions to Unit Holders be Reinvested?
Principal from maturing Securities in the Extendible Trust will be
automatically reinvested by the Trustee into Extension Securities during
the Extension Period. Thereafter, this principal will be distributed to
Unit holders.
Universal Distribution Option. Unit holders may elect participation in a
Universal Distribution Option which permits a Unit holder to direct the
Trustee to distribute principal (to the extent not used to acquire
Page 15
Extension Securities for the Extendible Trust) and interest payments to
any other investment vehicle of which the Unit holder has an existing
account. For example, at a Unit holder's direction, the Trustee would
distribute automatically on the applicable distribution date interest
income or principal on the participant's Units to, among other
investment vehicles, a Unit holder's checking, bank savings, money
market, insurance, reinvestment or any other account. All such
distributions, of course, are subject to the minimum investment and
sales charges, if any, of the particular investment vehicle to which
distributions are directed. The Trustee will notify the participant of
each distribution pursuant to the Universal Distribution Option. The
Trustee will distribute directly to the Unit holder any distributions
which are not accepted by the specified investment vehicle. A
participant may at any time, by so notifying the Trustee in writing,
elect to terminate his participation in the Universal Distribution
Option and directly receive future distributions on his Units.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is determined by adding to
the Evaluator's determination of the aggregate offering price of the
Securities in a Trust, including any money in the Principal Account
other than money required to redeem tendered Units, a sales charge of
1.95% of the Public Offering Price (which is equivalent to 1.989% of the
net amount invested) for each Trust. During the initial offering period,
the Sponsor's Repurchase Price is equal to the Evaluator's determination
of the aggregate offering price of the Securities in a Trust. For
secondary market sales after the completion of the initial offering
period, the Public Offering Price is based on the Evaluator's
determination of the aggregate bid price of the Securities in a Trust,
including any money in the Principal Account other than money required
to redeem tendered Units, and also includes a sales charge of 1.95% of
the Public Offering Price (which is equivalent to 1.989% of the net
amount invested) for each Trust. Also added to the Public Offering Price
is a proportionate share of interest accrued but unpaid on the
Securities after the First Settlement Date to the date of settlement of
Units (see "How is Accrued Interest Treated?").
The applicable sales charge for each Trust during the initial offering
period is reduced by a discount as indicated below for volume purchases
(except for sales made pursuant to a "wrap fee account" or similar
arrangements as set forth below):
Dollar Amount Discount
of Transaction Expressed as a
at Public Percentage of
Offering Price Public Offering Price
___________________ _____________________
$250,000 to 499,999 .05%
$500,000 to 999,999 .10%
$1,000,000 or more .25%
Any such reduced sales charge shall be the responsibility of the selling
Underwriter, broker/dealer, bank or other selling agent. This reduced
sales charge structure will apply on all purchases of Units in either
Trust by the same person on any one day from any one dealer. For
purposes of calculating the applicable sales charge, purchases of Units
in the Trusts will be aggregated together but will not be aggregated
with any other purchases by the same person of units in any series of
tax-exempt or other unit investment trusts sponsored by Nike Securities
L.P. Additionally, Units purchased in the name of the spouse of a
purchaser or in the name of a child of such purchaser under 21 years of
age will be deemed for the purposes of calculating the applicable sales
charge to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust or single fiduciary account.
The purchaser must inform the dealer of any such combined purchase prior
to the sale in order to obtain the indicated discount. With respect to
employees, officers and directors (including their immediate family
members, defined as spouses, children, grandchildren, parents,
grandparents, siblings, mothers-in-law, fathers-in-law, sons-in-law,
Page 16
daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of the Sponsor, Underwriters, dealers and their
affiliates, the sales charge is reduced by % of the Public
Offering Price for purchases of Units during the primary and secondary
market public offering periods.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to
dealers and other selling agents for purchases (see "Public Offering -
How are Units Distributed?") by investors who purchase Units through
registered investment advisers, certified financial planners or
registered broker/dealers who in each case either charge periodic fees
for financial planning, investment advisory or asset management
services, or provide such services in connection with the establishment
of an investment account for which a comprehensive "wrap fee" charge is
imposed.
On the Initial Date of Deposit, the Public Offering Price per Unit with
respect to each Trust is as indicated in the "Summary of Essential
Information" for each Trust. In addition to fluctuations in the amount
of interest accrued but unpaid on Securities in a Trust, the Public
Offering Price at any time during the initial offering period will vary
from the Public Offering Price stated herein in accordance with
fluctuations in the prices of the underlying Securities.
The aggregate price of the Securities in a Trust is determined by
Securities Evaluation Service, Inc. acting as evaluator (the
"Evaluator") on the basis of offering prices or bid prices as is
appropriate, (1) on the basis of current market prices for the
Securities obtained from dealers or brokers who customarily deal in
Securities comparable to those held by a Trust; (2) if such prices are
not available for any of the Securities, on the basis of current market
prices for comparable securities; (3) by determining the value of the
Securities by appraisal; or (4) by any combination of the above.
During the initial public offering period, a determination of the
aggregate price of the Securities in a Trust is made by the Evaluator on
an offering price basis, as of the close of trading on the New York
Stock Exchange (generally 4:00 p.m. Eastern time) on each day on which
it is open, effective for all sales made subsequent to the last
preceding determination. For secondary market purposes, the Evaluator
will be requested to make such a determination, on a bid price basis, as
of the close of trading on the New York Stock Exchange on each day on
which it is open, effective for all sales, purchases or redemptions made
subsequent to the last preceding determination.
The Public Offering Price of the Units during the initial offering
period is equal to the offering price per Unit of the Securities in a
Trust plus the applicable sales charge. After the completion of the
initial offering period, the secondary market Public Offering Price will
be equal to the bid price per Unit of the Securities in a Trust plus the
applicable sales charge. The offering price of Securities in a Trust was
greater than the bid price of such Securities on the Initial Date of
Deposit by the aggregate amount and the amount per Unit indicated in
"Portfolio" for each Trust.
Although payment is normally made three business days following the
order for purchase, payment may be made prior thereto. A person will
become owner of the Units on the date of settlement provided payment has
been received. Cash, if any, made available to the Sponsor prior to the
date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor,
subject to the limitations of the Securities Exchange Act of 1934.
Delivery of Certificates representing Units so ordered will be made
three business days following such order or shortly thereafter. Initial
transaction statements for Units held in uncertificated form
representing Units so ordered will be issued to the registered owner of
such Units within two business days of the issuance of such Units. See
"Rights of Unit Holders - How May Units be Redeemed?" for information
regarding the ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the Initial
Date of Deposit and (ii) for additional Units issued after such date as
additional Securities are deposited by the Sponsor, Units will be
distributed to the public at the then current Public Offering Price. The
initial offering period may be up to approximately 360 days. During such
period, the Sponsor may deposit additional Securities in a Trust and
create additional Units. Units reacquired by the Sponsor during the
Page 17
initial offering period (at prices based upon the aggregate underlying
value of the Securities in a Trust plus or minus a pro rata share of
cash, if any, in the Income and Capital Accounts of such Trust) may be
resold at the then current Public Offering Price. Upon the termination
of the initial offering period, unsold Units created or reacquired
during the initial offering period will be sold or resold at the then
current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of a Trust for sale
in a number of states. Sales initially will be made to dealers and
others at prices which represent a concession or agency commission of
1.1% of the Public Offering Price for each Trust, but the Sponsor
reserves the right to change the amount of the concession to dealers and
others from time to time. Certain commercial banks may be making Units
of a Trust available to their customers on an agency basis. A portion of
the sales charge paid by these customers is retained by or remitted to
the banks in the amounts as indicated above. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Units; however, the
Glass-Steagall Act does permit certain agency transactions and the
banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In Texas and in certain
other states, any banks making Units available must be registered as
broker/dealers under state law. Volume concessions of an additional
0.10% of the Public Offering Price will be given to any broker/dealer,
bank or other selling agent, who reaches cumulative firm sales for
purchases made from the Sponsor of at least $1,000,000 from the initial
date of the offering through , 1996. After a firm has met the
minimum $1,000,000 volume level, volume concessions will be given on all
trades originated from or by that firm, including those placed prior to
reaching the $1,000,000 level, and will continue to be given during the
entire initial offering period.
What are the Profits of the Sponsor?
The Underwriters, including the Sponsor, will receive a gross sales
commission equal to 1.95% of the Public Offering Price (equivalent to
1.989% of the net amount invested) for each Trust, less any reduced
sales charge for volume purchases as described under "Public Offering-
How is the Public Offering Price Determined?" See "Underwriting" for
information regarding additional concessions available to Underwriters,
dealers and others. The Sponsor will receive from the other Underwriters
the excess of such gross sales commission over % of the Public
Offering Price for each Trust. In addition, the Sponsor may be
considered to have realized a profit or the Sponsor may be considered to
have sustained a loss, as the case may be for each Trust, in the amount
of any difference between the cost of the Securities to such Trust and
the cost of such Securities to the Sponsor. See "Portfolio" for each
Trust under the heading "Profit or (Loss) to Sponsor" for the Sponsor's
profit or loss on the Initial Date of Deposit. During the initial
offering period, the Underwriters also may realize profits or sustain
losses as a result of fluctuations after the Initial Date of Deposit in
the offering prices of the Securities and hence in the Public Offering
Price received by the Underwriters upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased (based on the bid of the Securities
in a Trust) and the price at which Units are resold (which price is also
based on the bid prices of the Securities in such Trust and includes a
sales charge of 1.95% for each Trust) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to maintain a market for the Units and
continuously to offer to purchase Units at prices, subject to change at
any time, based upon the aggregate bid price of the Securities in the
portfolio of a Trust plus interest accrued to the date of settlement. To
the extent that a secondary market is maintained during the initial
offering period with respect to the Trusts, the prices at which Units of
a Trust will be repurchased will be based upon the aggregate offering
side evaluation of the Securities in the portfolio of a Trust. The
aggregate bid prices of the underlying Securities in each Trust, upon
which the Sponsor's Repurchase Price and the Redemption Price are based,
are expected to be less than the related aggregate offering prices
Page 18
(which is the evaluation method used during the initial public offering
period). All expenses incurred in maintaining a secondary market, other
than the fees of the Evaluator and the costs of the Trustee in
transferring and recording the ownership of Units, will be borne by the
Sponsor. If the supply of Units exceeds demand, or for some other
business reason, the Sponsor may discontinue purchases of Units at such
prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS, HE SHOULD
INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO MAKING A
TENDER FOR REDEMPTION TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Record ownership
may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issues
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon transfer
unless requested by the Unit holder. A Unit holder may at any time
request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred, and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Interest and Principal Distributed?
As described above for the Extendible Trust, during the Extension Period
all principal from maturing Securities will be reinvested in Extension
Securities. Commencing with the first distribution date for the Short-
Intermediate Trust and after the Extension Period for the Extendible
Trust, the pro rata share of cash in the Principal Account will be
computed as of the fifteenth day of each month and distributions to the
Unit holders as of such Record Date will be made on the last day of such
month. Proceeds from the disposition of any of the Securities or amounts
representing principal on the Securities received after such Record Date
and prior to the following Distribution Date will be held in the
Principal Account and not distributed until the next Distribution Date.
The Trustee is not required to pay interest on funds held in the
Principal or Interest Account (but may itself earn interest thereon and
therefore benefits from the use of such funds) nor make a distribution
Page 19
from the Principal Account unless the amount available for distribution
shall equal at least $1.00 per 100 Units.
The Trustee will credit to the Interest Account all interest received by
a Trust, including moneys representing penalties for the failure to make
timely payments on Securities or liquidated damages for default or
breach of any condition or term of the Securities and that part of the
proceeds of any disposition of Securities which represents accrued
interest. Other receipts will be credited to the Principal Account.
Persons who purchase Units between a Record Date and a Distribution Date
will receive their first distribution on the second Distribution Date
after the purchase.
As of the fifteenth day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein,
from the Principal Account, amounts necessary to pay the expenses of a
Trust. The Trustee also may withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any governmental
charges payable out of a Trust. Amounts so withdrawn shall not be
considered a part of the assets of such Trust until such time as the
Trustee shall return all or any part of such amounts to the appropriate
account. In addition, the Trustee may withdraw from the Interest Account
and the Principal Account such amounts as may be necessary to cover
redemption of Units by the Trustee.
Record Dates for monthly distributions will be the fifteenth day of each
month. Distributions will be made on the last day of such month.
Distributions for an IRA, Keogh, pension fund or other tax-deferred
retirement plan will not be sent to the individual Unit holder; these
distributions will go directly to the custodian of the plan to avoid the
penalties associated with premature withdrawals from such accounts.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of interest, if any, and the
amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per Unit. Within a reasonable time after
the end of each calendar year, the Trustee will furnish to each person
who at any time during the calendar year was a Unit holder of record, a
statement as to (1) the Interest Account: interest received (including
amounts representing interest received upon any disposition of
Securities, penalties for the failure to make timely payments on
Securities or liquidated damages for default or breach of any condition
or term of the Securities), deductions for payment of applicable taxes
and for fees and expenses of a Trust, redemption of Units and the
balance remaining after such distributions and deductions, expressed
both as a total dollar amount and as a dollar amount representing the
pro rata share per Unit outstanding on the last business day of such
calendar year; (2) the Principal Account: payments of principal on
Securities, the dates of disposition of any Securities and the net
proceeds received therefrom (excluding any portion representing
interest), deduction for payment of applicable taxes and for fees and
expenses of a Trust, redemptions of Units, and the balance remaining
after such distributions and deductions expressed both as a total dollar
amount and as a dollar amount per Unit; (3) the Securities (including
Extension Securities in the Extendible Trust) held and the number of
Units outstanding on the last business day of such calendar year; (4)
the Redemption Price per Unit based upon the last computation thereof
made during such calendar year; (5) the dollar amounts actually
distributed during such calendar year from the Interest Account and from
the Principal Account, separately stated; and (6) such other information
as the Trustee may deem appropriate. Unit holders of Units in
uncertificated form shall receive no less frequently than once each year
a dated written statement containing the name, address and taxpayer
identification number, if any, of the registered owner, the number of
Units registered in the name of the registered owner on the date of the
statement and certain other information, that will be provided as
required under applicable law.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its corporate trust office in the City of New York of the
certificates representing the Units to be redeemed, or, in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
Page 20
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after the close of trading on the New York Stock
Exchange (generally 4:00 p.m. Eastern time), the date of tender is the
next day on which such Exchange is open for trading and such Units will
be deemed to have been tendered to the Trustee on such day for
redemption at the redemption price computed on that day. Units so
redeemed shall be canceled.
Accrued interest to the settlement date paid on redemption shall be
withdrawn from the Interest Account or, if the balance therein is
insufficient, from the Principal Account. All other amounts paid on
redemption shall be withdrawn from the Principal Account.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the bid price of the
Securities in a Trust while the Public Offering Price of Units during
the initial offering period will be determined on the basis of the
offering price of the Securities as of the close of trading on the New
York Stock Exchange (generally 4:00 p.m. Eastern time) on the date any
such determination is made. At the opening of business on the Initial
Date of Deposit the Public Offering Price per Unit (which is based on
the offering prices of the Securities in a Trust and includes the sales
charge) exceeded the Unit value at which Units could have been redeemed
(based upon the current bid prices of the Securities in each Trust) by
the amount per Unit set forth in the "Summary of Essential Information."
The Redemption Price per Unit is the pro rata share of each Unit
determined by the Trustee on the basis of (1) the cash on hand in a
Trust or moneys in the process of being collected, (2) the value of the
Securities in a Trust based on the bid prices of the Securities and (3)
interest accrued on the Securities, less (a) amounts representing taxes
or other governmental charges payable out of a Trust and (b) the accrued
expenses of a Trust. The Evaluator may determine the value of the
Securities in a Trust (1) on the basis of current bid prices of the
Securities obtained from dealers or brokers who customarily deal in
securities comparable to those held by a Trust, (2) on the basis of bid
prices for securities comparable to any securities for which bid prices
are not available, (3) by determining the value of the Securities by
appraisal, or (4) by any combination of the above.
The difference between the bid and offering prices of such Securities
may be expected to average 1/16 to 1/4 of 1% of the principal amount of
such Securities. Therefore, the price at which Units may be redeemed
could be less than the price paid by the Unit holder. At the opening of
business on the Initial Date of Deposit the aggregate current offering
price of such Securities exceeded the Redemption Price (based upon
current bid prices of such Securities) by the aggregate amount and the
amount per Unit indicated in "Portfolio" for each Trust.
The Trustee is empowered to sell underlying Securities in order to make
funds available for redemption. To the extent that Securities are sold,
the size and diversity of a Trust will be reduced. Such sales may be
required at a time when Securities would not otherwise be sold and might
result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on that
Exchange is restricted or an emergency exists, as a result of which
disposal or evaluation of the Securities is not reasonably practicable,
or for such other periods as the Securities and Exchange Commission may
by order permit.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the
second succeeding business day and by making payment therefor to the
Unit holder not later than the day on which the Units would otherwise
have been redeemed by the Trustee. Units held by the Sponsor may be
tendered to the Trustee for redemption as any other Units.
Page 21
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit or loss resulting
from the resale or redemption of such Units will belong to the Sponsor.
How May Securities be Removed from a Trust?
The Sponsor is empowered, but not obligated, to direct the Trustee to
dispose of Securities in the event certain events occur that adversely
affect the value of Securities including default in payment of interest
or principal, default in payment of interest or principal of other
obligations guaranteed or backed by the full faith and credit of the
United States of America, institution of legal proceedings, default
under other documents adversely affecting debt service, decline in price
or the occurrence of other market or credit factors.
If any default in the payment of principal or interest on any Security
occurs and if the Sponsor fails to instruct the Trustee to sell or to
hold such Security within thirty days after notification by the Trustee
to the Sponsor of such default, the Trustee may, in its discretion, sell
the defaulted Security and not be liable for any depreciation or loss
thereby incurred.
The Trustee is also empowered to sell, for the purpose of redeeming
Units tendered by any Unit holder, and for the payment of expenses for
which funds may not be available, such of the Securities in a list
furnished by the Sponsor as the Trustee in its sole discretion may deem
necessary. Except as stated under "What is the First Trust Special
Situations Trust?", the acquisition by a Trust of any securities other
than the Securities initially deposited is prohibited.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds, The
First Trust GNMA, Templeton Growth and Treasury Trust, Templeton Foreign
Fund & U.S. Treasury Securities Trust and The Advantage Growth and
Treasury Securities Trust. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investments trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141. As of
December 31, 1994, the total partners' capital of Nike Securities L.P.
was $10,863,058 (audited). (This paragraph relates only to the Sponsor
and not to the Trusts or to any series thereof. The information is
included herein only for the purpose of informing investors as to the
financial responsibility of the Sponsor and its ability to carry out its
contractual obligations. More detailed financial information will be
made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank (National Association), a
national banking association with its principal executive office located
at 1 Chase Manhattan Plaza, New York, New York 10081 and its unit
investment trust offices at 770 Broadway, New York, New York 10003. Unit
holders who have questions regarding the Trusts may call the Customer
Service Help Line at 1-800-682-7520. The Trustee is subject to
supervision by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve
System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
Page 22
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and Trustee shall be under no liability to Unit holders for
taking any action or for refraining from taking any action in good faith
pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Securities. In the event of the failure of the
Sponsor to act under the Indenture, the Trustee may act thereunder and
shall not be liable for any action taken by it in good faith under the
Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or become incapable of acting or become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is Securities Evaluation Service, Inc., 531 East Roosevelt
Road, Suite 200, Wheaton, Illinois 60187. The Evaluator may resign or
may be removed by the Sponsor and the Trustee, in which event the
Sponsor and the Trustee are to use their best efforts to appoint a
satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Evaluator.
If upon resignation of the Evaluator no successor has accepted
appointment within 30 days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
Page 23
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee), provided that
the Indenture is not amended to increase the number of Units issuable
thereunder or to permit the deposit or acquisition of securities either
in addition to or in substitution for any of the Securities initially
deposited in a Trust, except for the substitution of Replacement
Securities for Failed Securities or the purchase of additional
Securities pursuant to the Indenture. In the event of any amendment, the
Trustee is obligated to notify promptly all Unit holders of the
substance of such amendment.
A Trust may be liquidated at any time by consent of 100% of the Unit
holders or by the Trustee when the principal amount of the Securities
owned by such Series as shown by any evaluation, is less than the lower
of $1,000,000 or 10% of the total principal amount of the Securities
initially deposited in such Series, or in the event that Units not yet
sold aggregating more than 60% of the Units initially deposited are
tendered for redemption by the Sponsor. If a Trust is liquidated because
of the redemption of unsold Units by the Sponsor will refund to each
purchaser of Units the entire sales charge paid by such purchaser. The
Indenture will terminate upon the redemption, sale or other disposition
of the last Security held thereunder, but in no event shall it continue
beyond with respect to the Extendible Trust or
with respect to the Short-Intermediate Trust. In the event of
termination, written notice thereof will be sent by the Trustee to all
Unit holders. Within a reasonable period after termination, the Trustee
will sell any Securities remaining in a Trust, and, after paying all
expenses and charges incurred by a Trust, will distribute to each Unit
holder (including the Sponsor if it then holds any Units), upon
surrender for cancellation of his Units, his pro rata share of the
balances remaining in the Interest and Principal Accounts, all as
provided in the Indenture.
Legal Opinions
The legality of the Units offered hereby will be passed upon by Chapman
and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as counsel
for the Sponsor. Carter, Ledyard & Milburn, 2 Wall Street, New York, New
York 10005, will act as counsel for the Trustee.
Experts
The statements of net assets, including the portfolios, of the Trusts at
the opening of business on the Initial Date of Deposit, appearing in
this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein and in the Registration Statement, and are
included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
UNDERWRITING
On the Initial Date of Deposit, the Underwriters of each Trust became
the owners of the Units of such Trust and entitled to the benefits
thereof, as well as the risks inherent therein.
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Extendible, Series 1
Name Address Units
____ _______ _____
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532
Underwriters*
_____
=====
</TABLE>
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Intermediate, Series 7
Name Address Units
____ _______ _____
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532
Underwriters*
_____
=====
</TABLE>
Page 24
[FN]
________________
* Each Underwriter has indicated an intention to purchase a total of
100,000 Units from the Sponsor either on the Initial Date of Deposit or
during the initial offering period.
The Agreement Among Underwriters provides that a public offering of the
Units will be made at the Public Offering Price described in the
Prospectus. Units may also be sold to dealers and others at prices
representing a concession or agency commission of 1.1% of the Public
Offering Price per Unit for each Trust for primary and secondary market
sales. See "Public Offering-How is the Public Offering Price
Determined?" for additional dealer concessions for volume purchases.
However, resales of Units by such dealers and others to the public will
be made at the Public Offering Price described in the Prospectus. The
Sponsor reserves the right to change the amount of the concession or
agency commission from time to time.
Certain Underwriters have agreed to underwrite additional Units of the
Short-Intermediate Trust as they become available. In addition to the
concessions described in "Public Offering-What are the Profits of the
Sponsor?", Underwriters may be eligible for additional concessions as
set forth in the following table:
<TABLE>
<CAPTION>
Dollar Amount Underwriting Concession
of Units as a Percentage of the
Trusts Underwritten Public Offering Price
_____ _____________ _______________________
<S> <C> <C>
First Trust U.S. Treasury Securities Trust,
Extendible, Series 1 $1,000,000 or more 1.20%
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 7 $1,000,000 or more 1.10%
</TABLE>
Total underwriting concession is based on the number of Units an
Underwriter has indicated its intention to purchase on the Initial Date
of Deposit.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of a Trust may receive nominal awards from the
Sponsor for each of their registered representatives who have sold a
minimum number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under which
the sales force of an Underwriter or dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such Underwriter or dealer that sponsors sales
contests or recognition programs conforming to criteria established by
the Sponsor, or participates in sales programs sponsored by the Sponsor,
an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time
pursuant to objective criteria established by the Sponsor pay fees to
qualifying Underwriters or dealers for certain services or activities
which are primarily intended to result in sales of Units of a Trust.
Such payments are made by the Sponsor out of its own assets, and not out
of the assets of a Trust. These programs will not change the price Unit
holders pay for their Units or the amount that a Trust will receive from
the Units sold.
A comparison of estimated current returns and estimated long-term
returns with the returns on various investments is one element to
consider in making an investment decision. The Sponsor may from time to
time in its advertising and sales materials compare the then current
estimated returns on a Trust and returns over specified periods on other
similar Trusts sponsored by Nike Securities L.P. with returns on other
taxable investments such as corporate bonds, bank CDs and money market
accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trusts. Bank CDs and
money market accounts, for example, are insured by an agency of the
federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics
of the Trusts are described more fully elsewhere in this Prospectus.
Page 25
First Trust U.S. Treasury Securities Trust
Extendible, Series 1
<TABLE>
<CAPTION>
Special Information
<S> <C>
Calculation of Estimated Net Annual Unit Income
Estimated Annual Interest Income per Unit $
Less: Estimated Annual Expense per Unit $
Estimated Net Annual Interest Income per Unit $
Calculation of Interest Distribution per Unit
Estimated Net Annual Interest Income per Unit $
Divided by 12 $
Estimated Daily Rate of Net Interest Accrual per Unit $
Estimated Yield to Next Extension Date Based on Public Offering Price (1) %
CUSIP
</TABLE>
Trustee's Annual Fee $ per Unit outstanding
annually, exclusive of expenses
of the Trust, commencing
, 1996.
Distributions
Estimated first distribution of $ per Unit will be paid on
, 1996 to Unit holders of record on , 1996
(The First General Record Date).
Subsequent distributions will be paid on the last day of each month to
holders of record of Units on the fifteenth day of such month.
No distributions need be made from the Principal Account if the balance
therein is less than $1.00 per 100 Units.
[FN]
___________________
(1) Estimated Yield to Next Extension Date (initially ,199 ,
shows the net annual yield to investors holding until the Next Extension
Date (i.e., the next date on which approximately 20% of the aggregate
face amount of the Portfolio matures), weighted to reflect market value
of each Security in the Portfolio (including discounts and premiums),
and taking into account estimated expenses and the sales charge as a
percentage of the Public Offering Price. Estimated Yield to Next
Extension Date is not weighted to reflect the time to maturity of the
Securities in the Portfolio. This figure will vary with the purchase
price of the Units (including the sales charge), changes in Trust income
and expenses and changes in Portfolio composition (including
dispositions and Extensions of Securities). In addition, distributions
of income on Units are generally subject to certain delays; if the
Estimated Yield to Next Extension Date took these delays into account,
it would be lower. Therefore, it can be expected that the Estimated
Yield to Next Distribution Date will fluctuate in the future. See
"Rights of Unit Holders-Extensions."
Page 26
Portfolio
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
EXTENDIBLE, SERIES 1
The First Trust Special Situations Trust, Series 144
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities Rate Maturity Sponsor (1) to Trust (2) to Sponsor
________________ ______ ________ ___________ ___________ __________
<S> <C> <C> <C> <C> <C>
$ $ $ $
____________ __________ __________ __________
$ $ $ $
============ ========== ========== ==========
</TABLE>
[FN]
__________________
(1) All Securities on the Initial Date of Deposit are represented by the
Sponsor's contracts to purchase such Securities. Such contracts were
acquired by the Sponsor on , 1996. Interest will begin
accruing to the benefit of Unit holders from , 1996,
the First Settlement Date of the Trust.
(2) The cost of the Securities to the Trust represents the offering side
evaluation of the Securities as determined by Securities Evaluation
Service, Inc. The offering side evaluation is greater than the current
bid side evaluation of the Securities which is the basis on which
Redemption Price per Unit is determined. The aggregate value based on
the bid side evaluation at the opening of business on the Initial Date
of Deposit was $ , which is $ ($ per Unit; % of the aggregate
principal amount) lower than the aggregate cost of the Securities to the
Trust based on the offering side evaluation.
Page 27
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 7
<TABLE>
<CAPTION>
Special Information
<S> <C>
Calculation of Estimated Net Annual Unit Income
Estimated Annual Interest Income per Unit $
Less: Estimated Annual Expense per Unit $
Estimated Net Annual Interest Income per Unit $
Calculation of Interest Distribution per Unit
Estimated Net Annual Interest Income per Unit $
Divided by 12 $
Estimated Daily Rate of Net Interest Accrual per Unit $
Estimated Current Return Based on Public Offering Price (1) %
Estimated Long-Term Return Based on Public Offering Price (1) %
CUSIP
</TABLE>
Trustee's Annual Fee $ per Unit outstanding
annually, exclusive of expenses
of the Trust, commencing
, 1996.
Distributions
Estimated first distribution of $ per Unit will be paid on
, 1996 to Unit holders of record on , 1996
(The First General Record Date).
Subsequent distributions will be paid on the last day of each
month to holders of record of Units on the fifteenth day
of such month.
No distributions need be made from the Principal Account if the
balance therein is less than $1.00 per 100 Units.
[FN]
___________________
(1) The Estimated Current Return is computed by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per
Unit. The Estimated Net Annual Interest Income per Unit will vary with
changes in fees and expenses of the Trustee, Sponsor and Evaluator and
with the principal prepayment, redemption, maturity, exchange or sale of
Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities; therefore, there is no
assurance that the present Estimated Current Return indicated above will
be realized in the future. The Estimated Long-Term Return is calculated
using a formula which (1) takes into consideration, and determines and
factors in the relative weightings of, the market values, yields, (which
takes into account the amortization of premiums and the accretion of
discounts) and maturity of all of the Securities in the Trust and (2)
takes into account a compounding factor and the expenses and sales
charge associated with each Unit of such Series. Since the market values
and the expenses of the Trust will change, there is no assurance that
the present Estimated Long-Term Return as indicated above will be
realized in the future. The Estimated Current Return and Estimated Long-
Term Return are expected to differ because the calculation of the
Estimated Long-Term Return reflects the date and estimated amount of
principal returned while the Estimated Current Return calculation
includes only the Net Annual Interest Income and Public Offering Price.
Neither rate reflects the true return to Unit holders which is lower
because neither includes the effect of certain delays in distributions
to Unit holders. These figures are based on per 100 Unit cash flows.
Cash flows will vary with changes in fees and expenses, with the
principal prepayment, redemption, maturity, exchange or sale of the
underlying Securities.
Page 28
Portfolio
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 7
The First Trust Special Situations Trust, Series 144
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities (1) Rate Maturity Sponsor (2) to Trust (3) to Sponsor
________________ ______ _________ ___________ ____________ __________
<S> <C> <C> <C> <C> <C>
$ $ $ $
___________ __________ __________ __________
$ $ $ $
=========== ========== ========== ==========
</TABLE>
[FN]
___________________
(1) The First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 7 consists of obligations. Each of the
Securities represents 20% of the aggregate principal amount of the
Securities in the Trust. See "What is the First Trust Special Situations
Trust?" All of the U.S. Treasury Securities in Series 7 consist of
maturities of approximately 1-3 years which are "laddered" to return 40%
of the Unit holders' principal in 199__, 40% in 199__ and 20% in 199__.
(2) All Securities on the Initial Date of Deposit are represented by the
Sponsor's contracts to purchase such Securities. Such contracts were
acquired by the Sponsor on , 1996. Interest will begin
accruing to the benefit of Unit holders from , 1996,
the First Settlement Date of the Trust.
(3) The cost of the Securities to the Trust represents the offering side
evaluation of the Securities as determined by Securities Evaluation
Service, Inc. The offering side evaluation is greater than the current
bid side evaluation of the Securities which is the basis on which
Redemption Price per Unit is determined. The aggregate value based on
the bid side evaluation at the opening of business on the Initial Date
of Deposit was $ , which is $ ($ per Unit; % of the
aggregate principal amount) lower than the aggregate cost of the
Securities to the Trust based on the offering side evaluation.
Page 29
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 144
We have audited the accompanying statements of net assets, including the
portfolios, of the First Trust Special Situations Trust, Series 144,
comprised of First Trust U.S. Treasury Securities Trust, Extendible,
Series 1 and First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 7, as of the opening of business on
, 1996. 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
letters of credit held by the Trustee and deposited in the Trusts at the
opening of business on , 1996. 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 present
fairly, in all material respects, the financial position of the First
Trust Special Situations Trust, Series 144, comprised of First Trust
U.S. Treasury Securities Trust, Extendible, Series 1 and First Trust
U.S. Treasury Securities Trust, Short-Intermediate, Series 7, at the
opening of business on , 1996 in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1996
Page 30
Statements of Net Assets
The First Trust Special Situations Trust, Series 144
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
First Trust First Trust
U.S. Treasury U.S. Treasury
Securities Trust, Securities Trust,
Extendible, Short-Intermediate,
Series 1 Series 7
________________ ___________________
NET ASSETS
<S> <C> <C>
Delivery statements relating to Sponsor's
contracts to purchase Securities (1)(2) $ $
Accrued interest on underlying Securities (2)(3) ___________ ___________
Organizational and offering costs (4)
Less distributions payable (3) ___________ ___________
Less accrued organizational and offering costs (4)
Net assets $ $
=========== ===========
Outstanding Units of fractional undivided interest
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C> <C>
Cost to investors (5) $ $
Less gross underwriting commissions (5) ( ) ( )
___________ ___________
Net assets $ $
=========== ===========
</TABLE>
[FN]
NOTES TO STATEMENTS OF NET ASSETS
(1) The aggregate offering price of the Securities each Trust listed
under "Portfolio" on the Initial Date of Deposit herein and their cost
to the applicable Trust are the same. The offering price shown above has
been determined by Securities Evaluation Service, Inc., certain
shareholders of which are officers of the Sponsor.
(2) Pursuant to delivery statements relating to contracts to purchase
Securities, an irrevocable letter of credit held by the Trustee has been
deposited in each Trust as collateral. The amount of available letter of
credit and the amount expected to be utilized as collateral for each
Trust is shown below. The amount expected to be utilized is (a) the cost
to the respective Trust of the principal amount of the Securities to be
purchased, (b) accrued interest on those Securities to the Initial Date
of Deposit and (c) accrued interest on those Securities from the Initial
Date of Deposit to the expected dates of delivery of the Securities.
<TABLE>
<CAPTION>
Accrued Accrued
Aggregate Interest to Interest to
Letter of Credit Offering Initial Expected
To be Price of Date of Dates of
Series Available Utilized Securities Deposit Delivery
_____ _________ ________ __________ ___________ ___________
<S> <C> <C> <C> <C> <C>
First Trust U.S. Treasury Securities
Trust, Extendible, Series 1 $ $ $ $ $
First Trust U.S. Treasury Securities,
Trust Short-Intermediate, Series 7 $ $ $ $ $
</TABLE>
Page 31
(3) The Trustee will advance to each Trust the amount of accrued
interest to , 1996, the First Settlement Date of each
Trust, for distribution to the Sponsor as the Unit Holder of record.
(4) Each Trust will bear all or a portion of its estimated
organizational and offering costs which will be deferred and charged off
over a period not to exceed five years from the Initial Date of Deposit.
The estimated organizational and offering costs are based on
Units of each Trust expected to be issued, respectively. To the
extent either number of Units issued is larger or smaller, the estimate
for such Trust will vary.
(5) The aggregate cost to investors (exclusive of accrued interest) and
the aggregate gross underwriting commissions of 1.95% for each Trust are
computed assuming no reduction of sales charge for quantity purchases.
DESCRIPTION OF STANDARD & POOR'S RATING*
A Standard & Poor's rating on the units of an investment trust
(hereinafter referred to collectively as "units" and "trust") is a
current assessment of creditworthiness with respect to the investments
held by such trust. This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers,
lessees or mortgagors with respect to such investments. The assessment,
however, does not take into account the extent to which trust expenses
or portfolio asset sales for less than the trust's purchase price will
reduce payment to the Unit holder of the interest and principal required
to be paid on the portfolio assets. In addition, the rating is not a
recommendation to purchase, sell, or hold units, inasmuch as the rating
does not comment as to market price of the units or suitability for a
particular investor.
Trusts rated "AAA" are composed exclusively of assets that are rated
"AAA" by Standard & Poor's or, have, in the opinion of Standard &
Poor's, credit characteristics comparable to assets rated "AAA," or
certain short-term investments. Standard & Poor's defines its "AAA"
rating for such assets as the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is very strong.
________________________
* As described by Standard & Poor's.
Page 32
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Page 33
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Page 34
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Page 35
CONTENTS:
Summary of Essential Information:
First Trust U.S. Treasury Securities
Trust, Extendible, Series 1 3
First Trust U.S. Treasury Securities
Trust, Short-Intermediate, Series 7 4
The First Trust Special Situations Trust, Series 144:
What is the First Trust Special Situations Trust? 5
Risk Factors 8
What is the Rating of the Units? 8
What are Estimated Returns? 9
How is Accrued Interest Treated? 10
What are the Expenses and Charges? 10
What is the Tax Status of Unit Holders? 11
Why are Investments in a Trust
Suitable for Retirement Plans? 15
How Can Distributions to Unit Holders be
Reinvested? 15
Public Offering:
How is the Public Offering Price Determined? 16
How are Units Distributed? 17
What are the Profits of the Sponsor? 18
Will There be a Secondary Market? 18
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 19
How are Interest and Principal Distributed? 19
What Reports Will Unit Holders Receive? 20
How May Units be Redeemed? 20
How May Units be Purchased by the Sponsor? 21
How May Securities be Removed from a Trust? 22
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 22
Who is the Trustee? 22
Limitations on Liabilities of Sponsor and Trustee 23
Who is the Evaluator? 23
Other Information:
How May the Indenture be Amended or
Terminated? 23
Legal Opinions 24
Experts 24
Underwriting 24
The Separate Trusts:
First Trust U.S. Treasury Securities
Trust, Extendible, Series 1 26
First Trust U.S. Treasury Securities
Trust, Short-Intermediate, Series 7 28
Report of Independent Auditors 30
Statements of Net Assets 31
Notes to Statements of Net Assets 31
Description of Standard & Poor's Rating 32
________________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
First Trust U.S. Treasury Securities Trust
Extendible
Series 1
First Trust U.S. Treasury Securities Trust
Short-Intermediate
Series 7
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 144
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 140, which is the
current fund, and The First Trust Special Situations Trust,
Series 144, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds 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 140 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 bonds 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 Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
144 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 February 28, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 144
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
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 Sole Director of
Nike Securities February 28, 1996
Corporation, the
General Partner of
Nike Securities L.P. Carlos E. Nardo
Attorney-in-Fact**
___________________________
* 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 24 and
subsequent Series effective January 23, 1992 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-
45093] filed on behalf of The First Trust Special
Situations Trust, Series 24).
1.1.1* Form of Trust Agreement for Series 144 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank
(National Association), as Trustee, First Trust Advisors
L.P., as Evaluator and First Trust Advisors L.P., as
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership Agreement
of Nike Securities L.P. (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporaiton, 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
