Registration No. 333-01457
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 146
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
NIKE SECURITIES L.P.
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agent for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title 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 Aggregate 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 public:
|XXX|Check box if it is proposed that this filing will become
effective on March 19, 1996 at 2:00 p.m. pursuant to Rule
487.
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 146
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 ITEM NUMBER FORM S-6 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 depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
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 Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment 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 certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
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 Rights of Unit Holders
disposition of income
(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 Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to 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 employees of
depositor 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 Public Offering
securities by states
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
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
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 in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to 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 OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights 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.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Statement of Net
Assets
Form S-6 Auditors
* Inapplicable, answer negative or not required.
First Trust (registered trademark)
Kansas Growth & Treasury Securities Trust, Series 1
The Trust. The First Trust(registered trademark) Special Situations
Trust, Series 146 consists of the underlying separate unit investment
trusts set forth above. The trust is sometimes referred to herein as the
"Trust."
The Kansas Growth & Treasury Securities Trust, Series 1 is a unit
investment trust consisting of a portfolio containing zero coupon U.S.
Treasury bonds and common stocks issued by companies which are
incorporated or headquartered in the State of Kansas, except up to 10%
of the portfolio may consist of Equity Securities of issuers
incorporated or headquartered outside of the State of Kansas.
The objective of the Kansas Growth & Treasury Securities Trust, Series 1
is to protect Unit holders' capital and provide potential capital
appreciation by investing a portion of its portfolio in zero coupon U.S.
Treasury bonds ("Treasury Obligations") and the remainder of the Trust's
portfolio in common stocks ("Equity Securities"). Collectively, the
Treasury Obligations and the Equity Securities are referred to herein as
the "Securities." The Treasury Obligations 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. The guarantee of
the U.S. Government does not apply to the market value of the Treasury
Obligations or the Units of the Trust, whose net asset value will
fluctuate and, prior to maturity, may be worth more or less than a
purchaser's acquisition cost. The Trust is intended to achieve its
objective over the life of the Trust and as such, is best suited for
those investors capable of holding such Units to maturity. See "Schedule
of Investments" for the Trust. There is, of course, no guarantee that
the objective of the Trust will be achieved. The Trust has a mandatory
termination date (the "Mandatory Termination Date") as set forth under
"Summary of Essential Information."
Each Unit of the Trust represents an undivided fractional interest in
all the Securities deposited in the Trust. The Trust has been organized
so that purchasers of Units should receive, at the termination of the
Trust, an amount per Unit at least equal to $10.00 (which is equal to
the per Unit value upon maturity of the Treasury Obligations), even if
the Trust never paid a dividend and the value of the Equity Securities
were to decrease to zero, which the Sponsor considers highly unlikely.
This feature of the Trust provides Unit holders who purchase Units at a
price of $10.00 or less per Unit with total principal protection,
including any sales charges paid, although they might forego any
earnings on the amount invested. To the extent that Units are purchased
at a price less than $10.00 per Unit, this feature may also provide a
potential for capital appreciation. As a result of the volatile nature
of the market for zero coupon U.S. Treasury bonds, Units sold or
redeemed prior to maturity will fluctuate in price and the underlying
Treasury Obligations may be valued at a price greater or less than their
value as of the Initial Date of Deposit. UNIT HOLDERS DISPOSING OF THEIR
UNITS PRIOR TO THE MATURITY OF THE TRUST MAY RECEIVE MORE OR LESS THAN
$10.00 PER UNIT, DEPENDING ON MARKET CONDITIONS ON THE DATE UNITS ARE
SOLD OR REDEEMED.
UNITS OF THE TRUST 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.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is March 19, 1996
Page 1
The Treasury Obligations deposited in the Trust on the Initial Date of
Deposit will mature on November 15, 2008 (the "Treasury Obligations
Maturity Date"). The Treasury Obligations in the Trust have a maturity
value equal to or greater than the aggregate Public Offering Price
(which includes the sales charge) of the Units of the Trust on the
Initial Date of Deposit. The Equity Securities deposited in the Trust's
portfolio have no fixed maturity date and the value of these underlying
Equity Securities will fluctuate with changes in the values of stocks in
general and with changes in the conditions and performance of the
specific Equity Securities owned by the Trust. See "Portfolio."
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Securities in the Trust, provided it maintains the original
percentage relationship between the Treasury Obligations and Equity
Securities in the Trust's portfolio. Such deposits of additional
Securities will, therefore, be done in such a manner that the maturity
value of each Unit should always be an amount at least equal to $10.00,
and that the original proportionate relationship amongst the individual
issues of the Equity Securities in the Trust shall be maintained. Any
deposit by the Sponsor of additional Securities will duplicate, as
nearly as is practicable, the original proportionate relationship
established on the Initial Date of Deposit, and not the actual
proportionate relationship on the subsequent date of deposit, since the
two may differ. Any such difference may be due to the sale, redemption
or liquidation of any Securities deposited in the Trust on the Initial,
or any subsequent, Date of Deposit. See "What is the First Trust Special
Situations Trust?" and "How May Securities be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
during the initial offering period is equal to a pro rata share of the
offering prices of the Treasury Obligations and the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust,
plus a maximum sales charge of 4.9% (equivalent to 5.152% of the net
amount invested). A pro rata share of accumulated dividends, if any, in
the Income Account is included in the Public Offering Price. The
secondary market Public Offering Price per Unit will be based upon a pro
rata share of the bid prices of the Treasury Obligations and the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust plus a maximum sales charge of
4.9% (equivalent to 5.152% of the net amount invested), subject to a
reduction beginning April 1, 1997.
The minimum purchase for the Trust is $1,000 ($250 for Individual
Retirement Accounts or other retirement plans). The sales charge for the
Trust is reduced on a graduated scale for sales involving at least 5,000
Units of the Trust. See "How is the Public Offering Price Determined?"
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trust will be paid in cash on the
Distribution Date to Unit holders of record on the Record Date as set
forth in the "Summary of Essential Information." Distributions of funds
in the Capital Account, if any, will be made at least annually in
December of each year. Any distribution of income and/or capital will be
net of the expenses of the Trust. INCOME WITH RESPECT TO THE ACCRUAL OF
ORIGINAL ISSUE DISCOUNT ON THE TREASURY OBLIGATIONS IN THE TRUST WILL
NOT BE DISTRIBUTED CURRENTLY, ALTHOUGH UNIT HOLDERS OF THE TRUST WILL BE
SUBJECT TO INCOME TAX AT ORDINARY INCOME RATES AS IF A DISTRIBUTION HAD
OCCURRED. See "What is the Federal Tax Status of Unit Holders?"
Additionally, upon termination of the Trust, the Trustee will
distribute, upon surrender of Units for redemption, to each Unit holder
his pro rata share of the Trust's assets, less expenses, in the manner
set forth under "Rights of Unit Holders-How are Income and Capital
Distributed?"
Secondary Market for Units. After the initial offering period, while
under no obligation to do so, the Sponsor may maintain a market for
Units of the Trust and offer to repurchase such Units at prices which
are based on the aggregate bid side evaluation of the Treasury
Obligations and the aggregate underlying value of Equity Securities in
the Trust (generally determined by the closing sale prices of listed
Equity Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of the Trust. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will be based upon the aggregate offering side evaluation of the
Treasury Obligations and the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices
Page 2
of listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the Capital and
Income Accounts of the Trust. If a secondary market is not maintained, a
Unit holder may redeem Units of the Trust through redemption at prices
based upon the aggregate bid price of the Treasury Obligations plus the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust. See "How May Units be Redeemed?"
Termination. Commencing on the Treasury Obligations Maturity Date for
the Trust, Equity Securities will begin to be sold in connection with
the termination of the Trust. The Sponsor will determine the manner,
timing and execution of the sale of the Equity Securities. Written
notice of any termination of the Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by the
Trustee. At least 60 days prior to the Treasury Obligations Maturity
Date for the Trust, the Trustee will provide written notice thereof to
all Unit holders and will include with such notice a form to enable Unit
holders to elect a distribution of shares of Equity Securities (reduced
by customary transfer and registration charges) if such Unit holder owns
at least 2,500 Units of the Trust, rather than to receive payment in
cash for such Unit holder's pro rata share of the amounts realized upon
the disposition by the Trustee of Equity Securities. All Unit holders of
the Trust will receive their pro rata portion of the Treasury
Obligations in cash upon the termination of the Trust. To be effective,
the election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the Trustee
at least five business days prior to the Treasury Obligations Maturity
Date for the Trust. Unit holders not electing a distribution of shares
of Equity Securities will receive a cash distribution from the sale of
the remaining Securities within a reasonable time after the Trust is
terminated. See "Rights of Unit Holders-How are Income and Capital
Distributed?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities which make up the Trust or the
general condition of the stock market, volatile interest rates and
economic recession. Volatility in the market prices of Securities in the
Trust also changes the value of Units of the Trust. Unit holders
tendering Units for redemption during periods of market volatility may
receive redemption proceeds which are more or less than they paid for
the Units. The Trust is not actively managed and Securities will not be
sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. See "What are Equity Securities?-Risk
Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-March 19, 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Kansas Growth & Treasury Securities Trust, Series 1
General Information
<S> <C>
Aggregate Maturity Value of Treasury Obligations Initially Deposited $ 150,000
Initial Number of Units 15,000
Fractional Undivided Interest in the Trust per Unit 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $ 132,760
Aggregate Offering Price Evaluation of Securities per Unit $ 8.8507
Sales Charge of 4.9% of the Public Offering Price per Unit,
(5.152% of the net amount invested) $ .4560
Public Offering Price per Unit (2) $ 9.3067
Sponsor's Initial Repurchase Price per Unit $ 8.8507
Redemption Price per Unit (based on bid price evaluation of underlying
Treasury Obligations and aggregate underlying value of Equity Securities)
($.4717 less than Public Offering Price per Unit;
$.0157 less than Sponsor's Initial Repurchase Price per Unit) (3) $ 8.8350
</TABLE>
CUSIP Number 33718R 419
First Settlement Date March 22, 1996
Treasury Obligations Maturity Date November 15, 2008
Mandatory Termination Date November 15, 2008
Trustee's Annual Fee $.0100 per Unit outstanding.
Evaluator's Annual Fee $.0030 per Unit outstanding.
Evaluations for purposes of
sale, purchase or redemption of
Units are made as of the close
of trading (generally 4:00
p.m. Eastern time) on the New
York Stock Exchange on each day
on which it is open.
Supervisory Fee (4) Maximum of $.0035 per Unit
outstanding annually payable to
an affiliate of the Sponsor.
Estimated Annual Organizational
and Offering Costs (5) $.0080 per Unit.
Income Distribution Record Date Fifteenth day of each June and
December, commencing June 15,
1996.
Income Distribution Date (6) Last day of each June and
December, commencing June 30,
1996.
[FN]
______________
(1) Each Equity Security listed on a national securities exchange or the
NASDAQ National Market System is valued at the last closing sale price,
or if no such price exists or if the Equity Security is not so listed,
at the closing ask price thereof. The Treasury Obligations are valued at
their aggregate offering side evaluation.
(2) On the Initial Date of Deposit there will be no accumulated dividends
in the Income Account. Anyone ordering Units after such date will pay a
pro rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Equity
Securities at the opening of business on the Initial Date of Deposit and
establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will also be reimbursed for bookkeeping and
other administrative expenses currently at a maximum annual rate of
$.0028 per Unit.
(5) The Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio and the initial fees
and expenses of the Trustee 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.
(6) Distributions from the Capital Account, if any, will be made monthly
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 4
Kansas Growth & Treasury Securities Trust, Series 1
The First Trust Special Situations Trust, Series 146
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 146 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 underlying separate unit investment
trust designated as: Kansas Growth & Treasury Securities Trust, Series
1(the "Trust"). The 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 and First Trust
Advisors L.P., as Portfolio Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of zero coupon U.S. Treasury
bonds and common stocks, together with an irrevocable letter or letters
of credit of a financial institution in an amount at least equal to the
purchase price of such securities. In exchange for the deposit of
securities or contracts to purchase securities in the Trust, the Trustee
delivered to the Sponsor documents evidencing the entire ownership of
such Trust.
The objective of the Trust is to protect Unit holders' capital and
provide potential capital appreciation by investing a portion of its
portfolio in zero coupon U.S. Treasury bonds ("Treasury Obligations")
and the remainder of the Trust's portfolio in common stocks issued by
companies that are incorporated or headquartered in the State of Kansas,
except up to 10% of the portfolio may consist of Equity Securities of
issuers incorporated or headquartered outside of the State of Kansas
("Equity Securities"). Collectively, the Treasury Obligations and the
Equity Securities are referred to herein as the "Securities." See
"Schedule of Investments." The Trust has a Mandatory Termination Date as
set forth under "Summary of Essential Information." The Treasury
Obligations 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. The guarantee of the U.S. Government does
not apply to the market value of the Treasury Obligations or the Units
of the Trust, whose net asset values will fluctuate and, prior to
maturity, may be worth more or less than a purchaser's acquisition cost.
There is, of course, no guarantee that the objective of the Trust will
be achieved.
With the deposit of the Securities in the Trust on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
principal amounts of Treasury Obligations and Equity Securities in the
Trust's portfolio. From time to time following the Initial Date of
Deposit, the Sponsor, pursuant to the Indenture, may deposit additional
Securities in the Trust 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 the Trust. Any additional
Securities deposited in the Trust will maintain, as nearly as is
practicable, the original proportionate relationship of the Treasury
Obligations and Equity Securities in the Trust's portfolio. Such
deposits of additional Securities in the Trust will, therefore, be done
in such a manner that the maturity value of the Treasury Obligations
represented by each Unit should always be an amount at least equal to
$10.00, and that the original proportionate relationship amongst the
individual issues of the Equity Securities shall be maintained. Any
deposit by the Sponsor of additional Securities in the Trust will
duplicate, as nearly as is practicable, the original proportionate
relationship and not the actual proportionate relationship on the
subsequent date of deposit, since the two may differ. Any such
difference may be due to the sale, redemption or liquidation of any of
the Securities deposited in the Trust on the Initial or any subsequent
Date of Deposit. See "How May Securities be Removed from the Trust?" On
a cost basis to the Trust, the original percentage relationship on the
Initial Date of Deposit was approximately 48.23% Treasury Obligations
and approximately 51.77% Equity Securities. The original percentage
relationship of each Equity Security in the Trust is set forth herein
under "Schedule of Investments." The prices of the underlying Treasury
Obligations and Equity Securities in the Trust will fluctuate daily and
the ratio, on a market value basis, will also change daily. The maturity
value of the Treasury Obligations and the portion of Equity Securities
represented by each Unit of the Trust will not change as a result of the
deposit of additional Securities in the Trust.
On the Initial Date of Deposit, each Unit of the Trust represented the
Page 5
undivided fractional interest in the Securities deposited in the Trust
set forth under "Summary of Essential Information." The Trust has been
organized so that purchasers of Units should receive, at the termination
of the Trust, an amount per Unit at least equal to $10.00 per Unit
(which is equal to the per Unit value upon maturity of the Treasury
Obligations), even if the Equity Securities never paid a dividend and
the value of the Equity Securities in the Trust were to decrease to
zero, which the Sponsor considers highly unlikely. Furthermore, the
Sponsor will take such steps in connection with the deposit of
additional Securities in the Trust as are necessary to maintain a
maturity value of the Units of the Trust at least equal to $10.00 per
Unit. The receipt of only $10.00 per Unit upon the termination of the
Trust (an event which the Sponsor believes is unlikely) represents a
substantial loss on a present value basis. At current interest rates,
the present value of receiving $10.00 per Unit as of the termination of
the Trust would be approximately $4.2689 per Unit (the present value is
indicated by the amount per Unit which is invested in Treasury
Obligations). Furthermore, the $10.00 per Unit in no respect protects
investors against diminution in the purchasing power of their investment
due to inflation (although expectations concerning inflation are a
component in determining prevailing interest rates, which in turn
determine present values). If inflation were to occur at the rate of 5%
per annum during the period ending at the termination of the Trust, the
present dollar value of $10.00 per Unit at the termination of the Trust
would be approximately $5.3152 per Unit. To the extent that Units of the
Trust are redeemed, the aggregate value of the Securities in the Trust
will be reduced and the undivided fractional interest represented by
each outstanding Unit of the Trust will increase. However, if additional
Units are issued by the Trust in connection with the deposit of
additional Securities by the Sponsor, the aggregate value of the
Securities in the Trust will be increased by amounts allocable to
additional Units, and the fractional undivided interest represented by
each Unit of the Trust will be decreased proportionately. See "How May
Units be Redeemed?"
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trust, 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 Trust. 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 this
Trust, 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 actual cost to the Sponsor
of supplying such services in such year. First Trust Advisors L.P. 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 the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. This fee may exceed the actual costs of providing
such supervisory services for this Trust, 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 Trust.
Subsequent to the initial offering period, the Evaluator, an affiliate
of the Sponsor, will receive a fee as indicated in the "Summary of
Essential Information." The fee may exceed the actual costs of providing
such evaluation services for this Trust, but at no time will the total
amount received for evaluation 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. The Trustee pays certain expenses of the Trust
for which it is reimbursed by the Trust. The Trustee will receive for
its ordinary recurring services to the Trust an annual fee as indicated
in "Summary of Essential Information." Such fee will be based upon the
Page 6
largest aggregate number of Units of the Trust outstanding at any time
during the year. 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 from the Income Account
to the extent funds are available and then from the Capital Account.
Since the Trustee has the use of the funds being held in the Capital and
Income Accounts for payment of expenses and redemptions and since such
Accounts are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to the
Trust 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 Trust, including costs of
preparing the registration statement, the trust indenture and other
closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of the Trust portfolio and the
initial fees and expenses of the Trustee and any other out-of-pocket
expenses, will be paid by the Trust and charged off over a period not to
exceed five years from the Initial Date of Deposit. The following
additional charges are or may be incurred by the Trust: all legal and
annual auditing 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 the 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 the 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 the Trust; all taxes and other government charges
imposed upon the Securities or any part of the 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 the Trust. In
addition, the Trustee is empowered to sell Securities in the Trust in
order to make funds available to pay all these amounts if funds are not
otherwise available in the Income and Capital Accounts of the Trust
except that the Trustee shall not sell Treasury Obligations to pay Trust
expenses. Since the Equity Securities are all common stocks and the
income stream produced by dividend payments is unpredictable, the
Sponsor cannot provide any assurance that dividends will be sufficient
to meet any or all expenses of the Trust. As described above, if
dividends are insufficient to cover expenses, it is likely that Equity
Securities will have to be sold to meet the Trust's expenses. These
sales may result in capital gains or losses to Unit holders. See "What
is the Federal Tax Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. So
long as the Sponsor is making a secondary market for the Units of the
Trust, the Sponsor is required to bear the cost of such annual audit to
the extent such cost exceeds $0.0050 per Unit for the Trust. Unit
holders of the Trust covered by an audit may obtain a copy of the
audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the
"Code"). Unit holders should consult their tax advisers in determining
the Federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of the assets of the Trust under the Code;
and the income of the Trust will be treated as income of the Unit
holders thereof under the Code. Each Unit holder will be considered to
have received his pro rata share of income derived from each Trust asset
when such income is received by the Trust.
2. Each Unit holder will have a taxable event when the Trust disposes
of an Equity Security (whether by sale, exchange, liquidation,
Page 7
redemption, or payment at maturity) or upon the sale or redemption of
Units by such Unit holder. The price a Unit holder pays for his Units,
including sales charges, is allocated among his pro rata portion of each
Security held by the Trust (in proportion to the fair market values
thereof on the date the Unit holder purchases his Units) in order to
determine his tax basis for his pro rata portion of each Security held
by such Trust. The Treasury Obligations held by the Trust are treated as
stripped bonds and may be treated as bonds issued at an original issue
discount as of the date a Unit holder purchases his Units. Because the
Treasury Obligations represent interests in "stripped" U.S. Treasury
bonds, a Unit holder's tax basis for his pro rata portion of each
Treasury Obligation held by the Trust 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 of the Trust 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 Treasury Obligations held by the 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 a Treasury
Regulation issued on December 28, 1992 relating to stripped bonds. To
the extent 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 Treasury Obligations, this method will
generally result in an increasing amount of income to the Unit holders
of the Trust each year. Unit holders of the Trust should consult their
tax advisers regarding the Federal income tax consequences and accretion
of original issue discount under the stripped bond rules. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by the Trust are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings
and profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceed such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, any such capital gain will be short-term unless a Unit
holder has held his Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust
will generally be considered a capital gain except in the case of a
dealer or a financial institution and, in general, will be long-term if
the Unit holder has held his Units for more than one year (the date on
which the Units are acquired (i.e., the trade date) is excluded for
purposes of determining whether the Units have been held for more than
one year). A Unit holder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust
will generally be considered a capital loss except in the case of a
dealer or a financial institution and will be long-term if the Unit
holder has held his Units for more than one year (the date on which
Units are acquired (i.e., the trade date) is excluded for purposes of
determining whether the Units have been held for more than one year).
Unit holders should consult their tax advisers regarding the recognition
of such capital gains and losses for Federal income tax purposes.
Dividends Received Deduction. A Unit holder will be considered to have
received all of the dividends paid on his pro rata portion of each
Equity Security when such dividends are received by the Trust. Unit
holders will be taxed in this manner regardless of whether distributions
from the Trust are actually received by the Unit holder or are
automatically reinvested.
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unit holder's pro rata
portion of dividends received by the Trust (to the extent such dividends
Page 8
are taxable as ordinary income, as discussed above) in the same manner
as if such corporation directly owned the Equity Securities paying such
dividends (other than corporate shareholders, such as "S" corporations,
which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax).
However, a corporation owning Units should be aware that Sections 246
and 246A of the Code impose additional limitations on the eligibility of
dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally be
held at least 46 days (as determined under Section 246(c) of the Code).
Final regulations have been recently issued which address special rules
that must be considered in determining whether the 46-day holding
requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unit holder owns certain stock
(or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation. It should be noted that
various legislative proposals that would affect the dividends received
deduction have been introduced. Unit holders should consult with their
tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by the Trust or if the Unit holder disposes of a Unit. For taxpayers
other than corporations, net capital gains are subject to a maximum
marginal tax rate of 28%. However, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and
could affect relative differences at which ordinary income and capital
gains are taxed.
Limitations on Deductibility of Trust Expenses by Unit holders. Each
Unit holder's pro rata share of each expense paid by the Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by him, subject to the following limitation. It
should be noted that as a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of such
individual's adjusted gross income. Unit holders may be required to
treat some or all of the expenses of the Trust as miscellaneous itemized
deductions subject to this limitation.
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. If the Unit holder disposes of a Unit, he
is deemed thereby to have disposed of his entire pro rata interest in
all assets of the Trust involved including his pro rata portion of all
the Securities represented by the Unit.
Special Tax Consequences of In-Kind Distributions Upon Termination of
the Trust. As discussed in "Rights of Unit Holders-How are Income and
Capital Distributed?", under certain circumstances a Unit holder who
owns at least 2,500 Units of a Trust may request an In-Kind Distribution
upon the termination of the Trust. The Unit holder requesting an In-Kind
Distribution will be liable for expenses related thereto (the
"Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See "Rights
of Unit Holders-How are Income and Capital Distributed?" Treasury
Obligations held by the Trust will not be distributed to a Unit holder
as part of an In-Kind Distribution. The tax consequences relating to the
sale of Treasury Obligations are discussed above. As previously
discussed, prior to the termination of the Trust, a Unit holder is
considered as owning a pro rata portion of each of the Trust assets for
Federal income tax purposes. The receipt of an In-Kind Distribution upon
the termination of the Trust would be deemed an exchange of such Unit
holder's pro rata portion of each of the shares of stock and other
assets held by the Trust in exchange for an undivided interest in whole
shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether the Unit holder receives cash in
addition to Equity Securities. A "Security" for this purpose is a
particular class of stock issued by a particular corporation (and does
Page 9
not include the Treasury Obligations). A Unit holder will not recognize
gain or loss if a Unit holder only receives Equity Securities in
exchange for his or her pro rata portion in the Equity Securities held
by the Trust. However, if a Unit holder also receives cash in exchange
for a fractional share of an Equity Security held by the Trust, such
Unit holder will generally recognize gain or loss based upon the
difference between the amount of cash received by the Unit holder and
his tax basis in such fractional share of an Equity Security held by the
Trust.
Because the Trust will own many Securities, a Unit holder who requests
an In-Kind Distribution will have to analyze the tax consequences with
respect to each Security owned by the Trust. The amount of taxable gain
(or loss) recognized upon such exchange will generally equal the sum of
the gain (or loss) recognized under the rules described above by such
Unit holder with respect to each Security owned by the Trust. Unit
holders who request an In-Kind Distribution are advised to consult their
tax advisers in this regard.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among the
Equity Securities held in the Trust in accordance with the proportion of
the fair market values of such Equity Securities on the date the Units
are purchased in order to determine such Unit holder's tax basis for his
pro rata portion of each Equity Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by the Trust will be reduced to the extent
dividends paid with respect to such Equity Security are received by the
Trust which are not taxable as ordinary income as described above.
General. Each Unit holder 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 by the Internal Revenue Service 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 Trust to such Unit
holder (including amounts received upon the redemption of Units) will be
subject to back-up withholding. Distributions by the Trust will
generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign
corporations or other non-United States persons (accrual of original
issue discount on the Treasury Obligations in the Trust may not be
subject to taxation or withholding provided certain requirements are
met). Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of original issue
discount and income dividends includable in the Unit holder's gross
income and amounts of Trust expenses which may be claimed as itemized
deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trust Suitable for
Retirement Plans?"
The foregoing discussion relates only to United States federal income
taxes. Unit holders may be subject to state and local taxation in other
jurisdictions. Unit holders should consult their tax advisors regarding
potential state or local taxation with respect to the Units.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the 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.
Fees and charges with respect to such plans may vary.
Page 10
PORTFOLIO
What are Treasury Obligations?
The Treasury Obligations deposited in the Trust consist of U.S. Treasury
bonds which have been stripped of their unmatured interest coupons. The
Treasury Obligations 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. Treasury Obligations 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 Treasury Obligations) 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 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 Treasury
Obligations 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 effect of
being able to acquire the Treasury Obligations at a lower price is to
permit more of the Trust's portfolio to be invested in Equity Securities.
What are Equity Securities?
The Trust consists of different issues of Equity Securities, all of
which are listed on a national securities exchange, the NASDAQ National
Market System or are traded in the over-the-counter market.
The Equity Securities of the Kansas Growth & Treasury Securities Trust,
Series 1 consist of common stocks issued by companies that are
incorporated or headquartered in the State of Kansas, except that up to
10% of the portfolio may consist of Equity Securities of issuers
incorporated or headquartered outside of the State of Kansas.
See "What are the Equity Securities Selected for Kansas Growth &
Treasury Securities Trust, Series 1?" for a general description of the
companies.
Risk Factors. An investment in Units of the Trust should be made with an
understanding of the risks such an investment may entail.
The Trust consists of such Securities listed under "Schedule of
Investments" as may continue to be held from time to time in the Trust
and any additional Securities acquired and held by the Trust pursuant to
the provisions of the Trust Agreement together with cash held in the
Income and Capital Accounts. Neither the Sponsor nor the Trustee shall
be liable in any way for any failure in any of the Securities. However,
should any contract for the purchase of any of the Securities initially
deposited hereunder fail, the Sponsor will, unless substantially all of
the moneys held in the Trust to cover such purchase are reinvested in
substitute Securities in accordance with the Trust Agreement, refund the
cash and sales charge attributable to such failed contract to all Unit
holders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Equity
Securities under certain limited circumstances. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities or
property are nonetheless acquired by the Trust, they may be accepted for
deposit in the Trust and either sold by the Trustee or held in such
Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Securities be Removed
from the Trust?" Equity Securities, however, will not be sold by the
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the
Page 11
general condition of the common stock market may worsen and the value of
the Equity Securities and therefore the value of the Units may decline.
Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding
government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common
stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or
holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, the Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of the Trust,
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in the Trust and will
vote such stocks in accordance with the instructions of the Sponsor.
What are the Equity Securities Selected for Kansas Growth & Treasury
Securities Trust, Series 1?
Kansas Companies
Amvestors Financial Corporation, headquartered in Topeka, Kansas, is the
holding company for American Investors Life Insurance Company. The
company sells single-premium deferred annuities through independent
insurance agents.
Applebee's International, Inc., headquartered in Overland Park, Kansas,
develops, franchises and operates a chain of restaurants under the name
"Applebee's Neighborhood Grill and Bar," as well as restaurants in the
Rio Bravo group. The restaurants offer a selection of moderately priced
food and beverage items targeted to both family and adult groups.
Page 12
Atchison Casting Corporation, headquartered in Atchison, Kansas,
manufactures steel castings. The company sells its products to customers
in the locomotive, mass transit, construction equipment, mining,
military, compressor, turbine, valve and pump industries.
Brite Voice Systems, Inc., headquartered in Wichita, Kansas, designs,
manufactures and markets voice processing systems which incorporate
audiotext, voice recognition, interactive voice response, voice
facsimile messaging and computer/telephone integration. These products
are used by telephone companies, government agencies, financial
institutions, utility companies, newspapers and mobile telephone carriers.
Lone Star Steakhouse & Saloon, headquartered in Wichita, Kansas, owns
and operates a chain of mid-priced, full service restaurants in numerous
states as well as Australia. The restaurants embrace a Texas-style
concept featuring Texas artifacts, free buckets of roasted peanuts and
country music.
Mueller Industries, Inc., headquartered in Wichita, Kansas, manufactures
and sells brass, copper, bronze, plastic and aluminum products through
its subsidiary, Mueller Brass Company. The company also operates natural
resource businesses consisting of coal mining and placer gold mining,
and runs a short-line railroad.
Republic Group, Inc., headquartered in Hutchinson, Kansas, manufactures
and sells paperboard and Gypsum wallboard. Gysum wallboard is a primary
building material used in the residential and commercial construction
industries. The company uses its paperboard in the production of Gypsum
wallboard and also sells paperboard to other manufacturers of Gysum
wallboard and to the packaging industry.
Sprint Corporation, headquartered in Westwood, Kansas, through its
wholly-owned and majority-held subsidiaries, including the wholly-owned
Sprint Communications Company L.P., provides domestic voice and data
communications services across specified geographic boundaries, as well
as international communications services.
Western Resources, Inc., headquartered in Topeka, Kansas, is an electric
and natural gas utility company which supplies electricity to customers
in central and eastern Kansas. The company supplies natural gas to
customers in the states of Kansas, Oklahoma and Missouri.
Out-of-State Companies
Boatmen's Bancshares. Inc., headquartered in St. Louis, Missouri,
directly owns substantially all the capital stock of subsidiary banks, a
mortgage banking company, a trust company, a life insurance company and
an insurance agency. The subsidiary banks operate from numerous offices
in nine states. Boatmen's business consists primarily of owning,
supervising and controlling its subsidiary companies.
Boeing Company, headquartered in Seattle, Washington, is a major
aerospace firm involved in production in the fields of commercial and
military transportation, missiles and space. The company manufactures
commercial jets, military aircraft and missiles for commercial customers
as well as the United States government and international governments.
Coleman Company, Inc., headquartered in Golden, Colorado, manufactures
and markets brand name consumer products for camping and related outdoor
recreational markets. Products include stoves, lanterns, coolers, tents,
jugs, sleeping bags and portable spas. The company also makes power
washers, portable generators and air compressors.
Informix Corporation, headquartered in Menlo Park, California, develops
and markets computer software. The company produces database management
programs and combination database management, word processor and
spreadsheet packages which run on minicomputers, microcomputers and
personal computers.
Kansas City Power and Light Company, headquartered in Kansas City,
Missouri, is a public utility which generates, transmits, distributes
and sells electricity. The company serves almost half a million
customers in numerous counties in western Missouri and eastern Kansas.
KLT, Inc., a wholly-owned subsidiary, pursues opportunities in non-
regulated, energy-related ventures.
Nellcor Puritan-Bennett, Inc. is headquartered in Pleasanton, California.
The company designs, manufactures and markets patient monitoring, diagnostic
and therapeutic products used in hospital critical care units, operating
rooms and anesthesia care units. The company also produces a variety of
disposables and reusable sensors and airway adaptors used in conjunction
with the monitors. The instruments measure blood oxygen saturation,
arterial pulses and respiratory gas.
Page 13
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Equity Securities, like the value of the Treasury
Obligations, will fluctuate over the life of the Trust and may be more
or less than the price at which they were deposited in the Trust. The
Equity Securities may appreciate or depreciate in value (or pay
dividends) depending on the full range of economic and market influences
affecting these securities. However, the Sponsor believes that, upon
termination of the Trust, even if the Equity Securities deposited in the
Trust are worthless, an event which the Sponsor considers highly
unlikely, the Treasury Obligations will provide sufficient principal to
at least equal $10.00 per Unit (which is equal to the per Unit value
upon maturity of the Treasury Obligations). This feature of the Trust
provides Unit holders with principal protection, although they might
forego any earnings on the amount invested. To the extent that Units are
purchased at a price less than $10.00 per Unit, this feature may also
provide a potential for capital appreciation.
Unless a Unit holder purchases Units of the Trust on the Initial Date of
Deposit (or another date when the value of the Units is $10.00 or less),
total distributions, including distributions made upon termination of
the Trust, may be less than the amount paid for a Unit.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Treasury Obligations or Equity Securities will not be delivered
("Failed Contract Obligations") to the Trust, the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other Treasury
Obligations or Equity Securities ("Replacement Securities"). Any
Replacement Security deposited in the Trust will, in the case of
Treasury Obligations have the same maturity value and, as closely as can
be reasonably acquired by the Sponsor, the same maturity date or, in the
case of Equity Securities, be identical to those which were the subject
of the failed contract. The Replacement Securities must be purchased
within 20 days after delivery of the notice of a failed contract and the
purchase price may not exceed the amount of funds reserved for the
purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraph is not utilized to acquire Replacement Securities in the event
of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
the Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in such Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Securities in the Trust and the issuance of a corresponding number of
additional Units.
The Trust consists of the Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) as may continue
to be held from time to time in the Trust and any additional Securities
acquired and held by the Trust pursuant to the provisions of the
Indenture (including provisions with respect to deposits into the Trust
of Securities in connection with the issuance of additional Units).
Once all of the Securities in the Trust are acquired, the Trustee will
have no power to vary the investments of the Trust, i.e., the Trustee
will have no managerial power to take advantage of market variations to
improve a Unit holder's investment, and may dispose of Securities only
under limited circumstances. See "How May Securities be Removed from the
Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Security which might
reasonably be expected to have a material adverse effect on the Trust.
At any time after the Initial Date of Deposit, litigation may be
instituted on a variety of grounds with respect to the Securities. The
Sponsor is unable to predict whether any such litigation will be
instituted, or if instituted, whether such litigation might have a
material adverse effect on the Trust.
Page 14
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 based on the aggregate of
the offering side evaluation of the Treasury Obligations in the Trust
and the aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the ask prices of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a sales charge of 4.9% (equivalent to 5.152%
of the net amount invested) divided by the number of Units of the Trust
outstanding.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate of the offering side evaluation of the Treasury
Obligations in the Trust and the aggregate underlying value of the
Equity Securities in the Trust (generally determined by the closing sale
prices of listed Equity Securities and the ask prices of over-the-
counter traded Equity Securities), plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
of the Trust outstanding. For secondary market sales after the
completion of the initial offering period, the Public Offering Price is
based on the aggregate bid side evaluation of the Treasury Obligations
in the Trust and the aggregate underlying value of the Equity Securities
in the Trust (generally determined by the closing sale prices of listed
Equity Securities and bid prices of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a maximum sales charge of 4.9% of the Public
Offering Price (equivalent to 5.152% of the net amount invested),
subject to reduction beginning April 1, 1997, divided by the number of
outstanding Units of the Trust.
The minimum purchase of the Trust is $1,000 ($250 for Individual
Retirement Accounts or other retirement plans). The applicable sales
charge 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):
<TABLE>
<CAPTION>
Primary and Secondary
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
__________________ ________ ________
<S> <C> <C>
5,000 but less than 10,000 0.25% 0.2506%
10,000 but less than 25,000 0.50% 0.5025%
25,000 but less than 50,000 1.00% 1.0101%
50,000 or more 2.00% 2.0408%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. The reduced sales charge
structure will apply on all purchases of Units in the Trust by the same
person on any one day from any one broker/dealer, bank or other selling
agent. 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 estate or single fiduciary
account. The purchaser must inform the broker/dealer, bank or other
selling agent of any such combined purchase prior to the sale in order
to obtain the indicated discount. In addition, with respect to the
employees, officers and directors (including their immediate family
members, defined as spouses, children, grandchildren, parents,
grandparents, mothers-in-law, fathers-in-law, sons-in-law and daughters-
in-law, and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor, broker/dealers, banks or other selling agents
and their affiliates, 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.
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
Page 15
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.
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price for the
Trust would have been as indicated in "Summary of Essential
Information." The Public Offering Price of Units on the date of the
prospectus or during the initial offering period may vary from the
amount stated under "Summary of Essential Information" in accordance
with fluctuations in the prices of the underlying Securities. During the
initial offering period, the aggregate value of the Units of the Trust
shall be determined (a) on the basis of the offering prices of the
Treasury Obligations and the aggregate underlying value of the Equity
Securities therein plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, (b) if offering prices are not available for the
Treasury Obligations, on the basis of offering prices for comparable
securities, (c) by determining the value of the Treasury Obligations on
the offer side of the market by appraisal, or (d) by any combination of
the above. The aggregate underlying value of the Equity Securities will
be determined in the following manner: If the Equity Securities are
listed on a national securities exchange or the NASDAQ National Market
System, this evaluation is generally based on the closing sale prices on
that exchange or that system (unless it is determined that these prices
are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange or system, at the closing ask prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange, the evaluation shall
generally be based on the current ask price on the over-the-counter
market (unless it is determined that these prices are inappropriate as a
basis for evaluation). If current ask prices are unavailable, the
evaluation is generally determined (a) on the basis of current ask
prices for comparable securities, (b) by appraising the value of the
Equity Securities on the ask side of the market or (c) by any
combination of the above.
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 Treasury Obligations in the Trust and the aggregate underlying value
of the Equity Securities therein, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. The offering price of the Treasury Obligations may be expected
to be greater than the bid price of the Treasury Obligations by less
than 2%.
Although payment is normally made three business days following the
order for purchase (the date of settlement), 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. 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 the Trust and
create additional Units. Units reacquired by the Sponsor during the
initial offering period (at prices based upon aggregate offering price
of the Treasury Obligations and the aggregate underlying value of the
Equity Securities in the 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.
Page 16
It is the intention of the Sponsor to qualify Units of the 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
3.2% of the Public Offering Price and secondary market sales (or 65% of
the then current maximum sales charge after April 1, 1997). Volume
concessions or agency commissions of an additional .40% of the Public
Offering Price will be given to any broker/dealer or bank, who purchases
from the Sponsor at least $100,000 of the Trust on the Initial Date of
Deposit or $250,000 on any other day thereafter. Volume concessions or
agency commissions of an additional .55% of the Public Offering Price
will be given to any broker/dealer or bank, who purchases from the
Sponsor at least $1,000,000 on the Initial Date of Deposit. The Sponsor
reserves the right to change the amount of the concession or agency
commission from time to time. Effective on each April, commencing April
1, 1997, the sales charge of the Trust will be reduced by 1/2 of 1% to a
minimum sales charge of 3.0%. However, resales of Units of the Trust by
such broker/dealers, banks and other selling agents to the public will
be made at the Public Offering Price described in the prospectus.
Certain commercial banks may be making Units of the Trust available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is retained by or remitted to the banks in the
amounts indicated in the second preceding sentence. Under the Glass-
Steagall Act, banks are prohibited from underwriting Units of the Trust;
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.
From time to time the Sponsor may implement programs under which
broker/dealers, banks or other selling agents of the 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 a broker/dealer,
bank or other selling agent may be eligible to win other nominal awards
for certain sales efforts, or under which the Sponsor will reallow to
any such broker/dealer, bank or other selling agent 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 broker/dealers, banks or other selling agents for certain
services or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out of its
own assets, and not out of the assets of the Trust. These programs will
not change the price Unit holders pay for their Units or the amount that
the Trust will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the 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 or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trust. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts 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 each Trust are
described more fully elsewhere in this Prospectus.
The Trust's performance may be compared to performance on a total return
basis of the Dow Jones Industrial Average, the S&P 500 Composite Price
Stock Index, or performance data from Lipper Analytical Services, Inc.
and Morningstar Publications, Inc. or from publications such as Money,
The New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
What are the Sponsor's Profits?
The Sponsor of the Trust will receive a gross sales commission equal to
4.9% of the Public Offering Price of the Units (equivalent to 5.152% of
the net amount invested), less any reduced sales charge for quantity
purchases as described under "Public Offering-How is the Public Offering
Price Determined?" See "Public Offering-How are Units Distributed?" for
Page 17
information regarding the receipt of additional concessions available to
broker/dealers, banks and other selling agents. In addition, the Sponsor
may be considered to have realized a profit or to have sustained a loss,
as the case may be, in the amount of any difference between the cost of
the Securities to the Trust (which is based on the Evaluator's
determination of the aggregate offering price of the underlying
Securities of the Trust on the Initial Date of Deposit as well as on
subsequent deposits) and the cost of such Securities to the Sponsor. See
Note (2) of "Schedule of Investments" for the Trust. During the initial
offering period, the broker/dealers, banks and other selling agents also
may realize profits or sustain losses as a result of fluctuations after
the Initial Date of Deposit in the Public Offering Price received by
such dealers and others 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 and the price at which Units are
resold (which price includes a sales charge of 4.9%, subject to
reduction beginning April 1, 1997) 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 offer to purchase Units at prices, subject to change at any
time, based upon the aggregate bid price of the Treasury Obligations in
the Trust and the aggregate underlying value of the Equity Securities in
the Trust plus or minus cash, if any, in the Income and Capital Accounts
of the Trust. 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 issuer
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
Page 18
presented to the Trustee and no certificate will be issued upon the
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 Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted interest
on the Treasury Obligations) received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unit holders of record on the preceding Income Record Date. See "Summary
of Essential Information." Because dividends are not received by the
Trust at a constant rate throughout the year, such distributions to Unit
holders may be more or less than the amount credited to the Income
Account as of the Record Date. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling broker-
dealer. The pro rata share of cash in the Capital Account of the Trust
will be computed as of the fifteenth day of each month. Proceeds
received on the sale of any Securities in the Trust, to the extent not
used to meet redemptions of Units or pay expenses, will, however, be
distributed on the last day of each month to Unit holders of record on
the fifteenth day of each month if the amount available for distribution
equals at least $1.00 per 100 Units. The Trustee is not required to pay
interest on funds held in the Capital Account of the Trust (but may
itself earn interest thereon and therefore benefit from the use of such
funds). Notwithstanding, distributions of funds in the Capital Account,
if any, will be made on the last day of each December to Unit holders of
record as of December 15. Income with respect to the original issue
discount on the Treasury Obligations in the Trust will not be
distributed currently, although Unit holders will be subject to Federal
income tax as if a distribution had occurred. See "What is the Federal
Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
the Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
of the Trust will, upon surrender of his Units for redemption, receive:
(i) the pro rata share of the amounts realized upon the disposition of
Equity Securities, unless he elects an In-Kind Distribution as described
below, (ii) a pro rata share of the amounts realized upon the
disposition of the Treasury Obligations and (iii) a pro rata share of
any other assets of the Trust, less expenses of the Trust, subject to
the limitation that Treasury Obligations may not be sold to pay for
Trust expenses. Not less than 60 days prior to the Treasury Obligations
Maturity Date, the Trustee will provide written notice thereof to all
Unit holders and will include with such notice a form to enable Unit
holders to elect a distribution of shares of Equity Securities (an "In-
Kind Distribution"), if such Unit holder owns at least 2,500 Units of
the Trust, rather than to receive payment in cash for such Unit holder's
pro rata share of the amounts realized upon the disposition by the
Trustee of Equity Securities. An In-Kind Distribution will be reduced by
customary transfer and registration charges. To be effective, the
election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the Trustee
at least five business days prior to the Treasury Obligations Maturity
Date. Not less than 60 days prior to the termination of the Trust, those
Unit holders owning at least 2,500 Units will be offered the option of
having the proceeds from the Equity Securities distributed "In-Kind," or
Page 19
they will be paid in cash, as indicated above. A Unit holder may, of
course, at any time after the Equity Securities are distributed, sell
all or a portion of the shares.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.,
return of capital, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, 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 period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Securities
sold during the year and the Securities held at the end of such year by
the Trust; (3) the redemption price per Unit based upon a computation
thereof on the 31st day of December of such year (or the last business
day prior thereto); and (4) amounts of income and capital distributed
during such year.
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 in the Trust 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 the
signature guaranteed as explained above (or by providing satisfactory
indemnity, 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 4:00 p.m. Eastern
time, the date of tender is the next day on which the New York Stock
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 cancelled.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. Any amount so withheld is transmitted to the Internal
Revenue Service and may be recovered by the Unit holder only when filing
a tax return. Under normal circumstances, the Trustee obtains the Unit
holder's tax identification number from the selling broker. However, any
time a Unit holder elects to tender Units for redemption, such Unit
holder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of the Trust.
The Trustee is empowered to sell Securities of the Trust in order to
make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of the Trust will be
reduced. Such sales may be required at a time when Equity Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized. Equity Securities will be sold to meet
redemptions of Units before Treasury Obligations, although Treasury
Obligations may be sold if the Trust is assured of retaining a
sufficient principal amount of Treasury Obligations to provide funds
upon maturity of such Trust at least equal to $10.00 per Unit.
Page 20
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
Treasury Obligations and the aggregate underlying value of the Equity
Securities in the Trust plus or minus cash, if any, in the Income and
Capital Accounts of the Trust, while the Public Offering Price per Unit
during the initial offering period will be determined on the basis of
the offering price of such Treasury Obligations, as of the close of
trading on the New York Stock Exchange on the date any such
determination is made and the aggregate underlying value of the Equity
Securities in the Trust, plus or minus cash, if any, in the Income and
Capital Accounts of the Trust. On the Initial Date of Deposit the Public
Offering Price per Unit (which is based on the OFFERING prices of the
Treasury Obligations and the aggregate underlying value of the Equity
Securities in the 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 Treasury Obligations and the aggregate underlying value
of the Equity Securities in the Trust) by the amount shown under
"Summary of Essential Information." The Redemption Price per Unit of the
Trust is the pro rata share of each Unit determined by the Trustee by
adding: (1) the cash on hand in the Trust other than cash deposited in
the Trust to purchase Securities not applied to the purchase of such
Securities; (2) the aggregate value of the Securities (including "when
issued" contracts, if any) held in the Trust, as determined by the
Evaluator on the basis of bid prices of the Treasury Obligations and the
aggregate underlying value of the Equity Securities in the Trust next
computed; and (3) dividends receivable on the Equity Securities trading
ex-dividend as of the date of computation; and deducting therefrom: (1)
amounts representing any applicable taxes or governmental charges
payable out of the Trust; (2) an amount representing estimated accrued
expenses of the Trust, including but not limited to fees and expenses of
the Trustee (including legal and auditing fees), the Evaluator and
supervisory fees, if any; (3) cash held for distribution to Unit holders
of record of the Trust as of the business day prior to the evaluation
being made; and (4) other liabilities incurred by the Trust; and finally
dividing the results of such computation by the number of Units of the
Trust outstanding as of the date thereof.
The aggregate value of the Equity Securities will be determined in the
following manner: if the Equity Securities are listed on a national
securities exchange or the NASDAQ National Market System, this
evaluation is generally based on the closing sale prices on that
exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale
price on that exchange or system, at the closing bid prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange, the evaluation shall
generally be based on the current bid price on the over-the-counter
market (unless these prices are inappropriate as a basis for
evaluation). If current bid prices are unavailable, the evaluation is
generally determined (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Equity
Securities on the bid side of the market or (c) by any combination of
the above.
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 the New
York Stock Exchange is restricted or any 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. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
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 1:00 p.m. Eastern time on the same
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. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
Page 21
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then 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 the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to the
Trust. Treasury Obligations may be sold by the Trustee only pursuant to
the liquidation of the Trust or to meet redemption requests. Except as
stated under "Portfolio-What are Some Additional Considerations for
Investors?" for Failed Contract Obligations, the acquisition by the
Trust of any securities other than the Securities is prohibited.
Pursuant to the Indenture and with limited exceptions, the Trustee may
sell any securities or other property acquired in exchange for Equity
Securities such as those acquired in connection with a merger or other
transaction. If offered such new or exchanged securities or property,
the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the Trust, they may
be accepted for deposit in the Trust and either sold by the Trustee or
held in the Trust pursuant to the direction of the Sponsor (who may rely
on the advice of the Portfolio Supervisor). Proceeds from the sale of
Securities by the Trustee are credited to the Capital Account of the
Trust for distribution to Unit holders or to meet redemptions.
The Trustee may also sell Securities designated by the Sponsor, or if
not so directed, in its own discretion, for the purpose of redeeming
Units of the Trust tendered for redemption and the payment of expenses;
provided, however, that in the case of Securities sold to meet
redemption requests, Treasury Obligations may only be sold if the Trust
is assured of retaining a sufficient principal amount of Treasury
Obligations to provide funds upon maturity of the Trust at least equal
to $10.00 per Unit. Treasury Obligations may not be sold by the Trustee
to meet Trust expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
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 investment 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
Page 22
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, 1995 the total partners' capital of Nike Securities L.P.
was $9,033,760 (audited). (This paragraph relates only to the Sponsor
and not to the Trust or to any series thereof or to any other
Underwriter. 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 office at 770 Broadway, New York, New York 10003. Unit
holders who have questions regarding the Trust 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
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 the 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 the 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 becomes incapable of acting or becomes 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 Trusts as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Page 23
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
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 an 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
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).
The Indenture provides that the Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Treasury Obligations
held in such Trust, but in no event beyond the Mandatory Termination
Date indicated herein under "Summary of Essential Information." The
Trust may be liquidated at any time by consent of 100% of the Unit
holders of the Trust, or by the Trustee in the event that Units of the
Trust not yet sold aggregating more than 60% of the Units of the Trust
are tendered for redemption by the Underwriter, including the Sponsor.
If the Trust is liquidated because of the redemption of unsold Units of
the Trust by the Underwriter, the Sponsor will refund to each purchaser
of Units of the Trust the entire sales charge paid by such purchaser. In
the event of termination, written notice thereof will be sent by the
Trustee to all Unit holders of the Trust. Within a reasonable period
after termination, the Trustee will follow the procedures set forth
under "How are Income and Capital Distributed?"
Commencing on the Treasury Obligations Maturity Date, Equity Securities
will begin to be sold in connection with the termination of the Trust.
The Sponsor will determine the manner, timing and execution of the sale
of the Equity Securities. Written notice of any termination of the Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his address appearing on the registration books of the Trust
maintained by the Trustee. At least 60 days prior to the Treasury
Obligations Maturity Date, the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of the Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. All Unit holders of the Trust will receive their pro rata
portion of the Treasury Obligations in cash upon the termination of the
Trust. To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee, must be
returned to the Trustee at least five business days prior to the
Treasury Obligations Maturity Date. Unit holders not electing a
distribution of shares of Equity Securities will receive a cash
distribution from the sale of the remaining Securities within a
reasonable time after the Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the funds of the
Trust any accrued costs, expenses, advances or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to provide
for payment of any applicable taxes or other governmental charges. Any
sale of Securities in the Trust upon termination may result in a lower
Page 24
amount than might otherwise be realized if such sale were not required
at such time. The Trustee will then distribute to each Unit holder his
pro rata share of the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
Page 25
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 146
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 146, comprised of Kansas Growth & Treasury Securities Trust,
Series 1 as of the opening of business on March 19, 1996. The statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on the statement of net assets
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on March 19, 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 statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 146, comprised of Kansas Growth &
Treasury Securities Trust, Series 1 at the opening of business on March
19, 1996 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 19, 1996
Page 26
Statement of Net Assets
Kansas Growth & Treasury Securities Trust, Series 1
The First Trust Special Situations Trust, Series 146
At the Opening of Business on the Initial Date of Deposit
March 19, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase contracts (1) (2) $ 132,760
Organizational and offering costs (3) 20,000
__________
152,760
Less accrued organizational and offering costs (3) (20,000)
__________
Net assets $ 132,760
==========
Units outstanding 15,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $ 139,600
Less sales charge (4) (6,840)
__________
Net assets $ 132,760
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for Kansas Growth & Treasury Securities Trust, Series 1 is
based on the offering side evaluations of the Treasury Obligations and
the aggregate underlying value of the Equity Securities.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral covering
the monies necessary for the purchase of the Securities in the Kansas
Growth & Treasury Securities Trust, Series 1 pursuant to contracts for
the purchase of such Securities.
(3) The 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 500,000 Units of the
Trust expected to be issued. To the extent the number of Units issued is
larger or smaller, the estimate will vary.
(4) The aggregate cost to investors includes a sales charge computed at
the rate of 4.9% of the Public Offering Price (equivalent to 5.152% of
the net amount invested), assuming no reduction of sales charge for
quantity purchases.
Page 27
Schedule of Investments
Kansas Growth & Treasury Securities Trust, Series 1
The First Trust Special Situations Trust, Series 146
At the Opening of Business on the Initial Date of Deposit
March 19, 1996
<TABLE>
<CAPTION>
Percentage of Market Value
Aggregate per Share Cost of
Maturity Offering of Equity Securities
Value Name of Issuer and Title of Security (1) Price Securities to Trust (2)
_________ ________________________________________ _____________ ____________ ____________
<C> <S> <C> <C> <C>
$150,000 Zero coupon U.S. Treasury bonds 48.23% $ 64,033
maturing November 15, 2008
</TABLE>
<TABLE>
<CAPTION>
Number Ticker Symbol and
of Shares Name of Issuer of Equity Securities (1)
________ _______________________________________
<C> <S> <C> <C> <C>
Kansas Companies
_________________
536 AMV Amvestors Financial Corporation 4.64% $11.500 6,164
242 APPB Applebee's International, Inc. 4.67% 25.625 6,201
493 ACCX Atchison Casting Corporation 4.92% 13.250 6,532
338 BVSI Brite Voice Systems, Inc. 4.77% 18.750 6,338
151 STAR Lone Star Steakhouse & Saloon 4.62% 40.625 6,134
185 MLI Mueller Industries, Inc. 4.74% 34.000 6,290
457 RGC Republic Group, Inc. 4.65% 13.500 6,169
174 FON Sprint Corporation 4.65% 35.500 6,177
205 WR Western Resources, Inc. 4.63% 30.000 6,150
Out-of-State Companies
______________________
54 BOAT Boatmen's Bancshares. Inc. 1.58% 38.750 2,093
25 BA Boeing Company 1.61% 85.625 2,141
48 CLN Coleman Company, Inc. 1.59% 44.000 2,112
61 IFMX Informix Corporation 1.60% 34.750 2,120
82 KLT Kansas City Power and Light Company 1.57% 25.375 2,081
30 NELL Nellcor Puritan-Bennett, Inc. 1.53% 67.500 2,025
_____ ________
Total Equity Securities 51.77% 68,727
______ ________
Total Investments 100% $132,760
====== ========
</TABLE>
[FN]
______________
(1) The Treasury Obligations were purchased at a discount from their par
value because there is no stated interest income thereon (such
securities are often referred to as zero coupon U.S. Treasury bonds).
Over the life of the Treasury Obligations the value increases, so that
upon maturity the holders will receive 100% of the principal amount
thereof. All Securities are represented by regular way contracts to
purchase such Securities for the performance of which an irrevocable
letter of credit has been deposited with the Trustee. The contracts to
purchase Securities were entered into by the Sponsor on March 18, 1996
and March 19, 1996.
(2) The cost of the Securities to the Trust represents the offering side
evaluation as determined by the Evaluator, an affiliate of the Sponsor,
with respect to the Treasury Obligations and the aggregate underlying
value with respect to the Equity Securities acquired (generally
determined by the closing sale prices of the listed Equity Securities
and the ask prices of the over-the-counter traded Equity Securities on
the business day preceding the Initial Date of Deposit). The offering
side evaluation of the Treasury Obligations is greater than the bid side
evaluation of such Treasury Obligations which is the basis on which the
Redemption Price per Unit will be determined after the initial offering
Page 28
period. The aggregate value, based on the bid side evaluation of the
Treasury Obligations and the aggregate underlying value of the Equity
Securities on the Initial Date of Deposit, was $132,525. Cost and profit
to the Sponsor relating to the Treasury Obligations sold to the Trust
were $63,876 and $157, respectively. Cost and loss to Sponsor relating
to the Equity Securities sold to the Trust were $68,921 and $194,
respectively.
Page 29
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Page 30
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Page 31
CONTENTS:
Summary of Essential Information 4
The First Trust Special Situations Trust, Series 146:
What is The First Trust Special Situations Trust? 5
What are the Expenses and Charges? 6
What is the Federal Tax Status of Unit Holders? 7
Why are Investments in the Trusts Suitable for
Retirement Plans? 10
Portfolios:
What are Treasury Obligations? 11
What are Equity Securities? 11
Risk Factors 11
What are the Equity Securities Selected for
Kansas Growth & Treasury Securities Trust, Series 1? 12
What are Some Additional Considerations for
Investors? 14
Public Offering:
How is the Public Offering Price Determined? 15
How are Units Distributed? 16
What are the Sponsor's Profits? 17
Will There be a Secondary Market? 18
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 18
How are Income and Capital 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 the Trust? 22
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 22
Who is the Trustee? 23
Limitations on Liabilities of Sponsor and Trustee 23
Who is the Evaluator? 24
Other Information:
How May the Indenture be Amended or Terminated? 24
Legal Opinions 25
Experts 25
Report of Independent Auditors 26
Statement of Net Assets 27
Notes to Statement of Net Assets 27
Schedule of Investments 28
______________________
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)
Kansas Growth & Treasury Securities Trust
Series 1
Nike Securities, L.P.
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
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
March 19, 1996
Page 32
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. THIS REGISTRATION STATEMENT ON FORM S-6 COMPRISES
THE FOLLOWING PAPERS AND DOCUMENTS:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 146, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1,
The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1 and The First
Trust Combined Series 248, for purposes of the representations
required by Rule 487 and represents the following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
146, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
March 19, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 146
By NIKE SECURITIES L.P.
Depositor
By Carlos E. Nardo
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) March 19, 1996
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.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated March 19, 1996 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-01457) and related Prospectus of The First Trust Special
Situations Trust, Series 146.
ERNST & YOUNG LLP
Chicago, Illinois
March 19, 1996
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 18 and
subsequent Series effective October 15, 1991 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and Nike Financial Advisory
Services L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.1.1 Form of Trust Agreement for Series 146 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 Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 146
TRUST AGREEMENT
Dated: March 19, 1996
This Trust Agreement 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, sets
forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Standard
Terms and Conditions of Trust for The First Trust Special
Situations Trust, Series 18 and subsequent Series, Effective
October 15, 1991" (herein called the "Standard Terms and
Conditions of Trust"), and such provisions as are
incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to
Articles and Sections of the Standard Terms and Conditions
of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III
hereof, all the provisions contained in the Standard Terms
and Conditions of Trust are herein incorporated by reference
in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as tough said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Securities initially deposited in the
Trust pursuant to Section 2.01 of the Standard Terms
and Conditions of Trust are set forth in the Schedules
hereto.
B. (1) The aggregate number of Units
outstanding for the Trust on the Initial Date of
Deposit is 15,000 Units.
(2) The initial fractional undivided
interest in and ownership of the Trust represented by
each Unit thereof shall be 1/15,000.
Documents representing this number of Units for
the Trust are being delivered by the Trustee to the
Depositor pursuant to Section 2.03 of the Standard
Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the
Initial Date of Deposit:
4.64% Amvestors Financial Corporation, 4.67%
Applebee's International, Inc., 4.92% Atchison
Casting Corporation, 4.77% Brite Voice Systems,
Inc., 4.62% Lone Star Steakhouse & Saloon,
4.74% Mueller Industries, Inc., 4.65% Republic
Group, Inc., 4.65% Sprint Corporation, 4.63%
Western Resources, Inc., 1.58% Boatmen's
Bancshares, Inc., 1.61% Boeing Company, 1.59%
Coleman Company, Inc., 1.60% Informix
Corporation, 1.57% Kansas City Power and Light
Company, 1.53% Nellcor Puritan-Bennett, Inc.
D. The Record Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
E. The Distribution Dates shall be as set forth
in the Prospectus under "Summary of Essential
Information."
F. The Mandatory Termination Date for the Trust
shall be November 15, 2008.
G. The Treasury Obligations Maturity Date for
the Trust shall be November 15, 2008.
H. The Evaluator's compensation as referred to
in Section 4.03 of the Standard Terms and Conditions of
Trust shall be an annual fee of $.0030 per Unit
calculated on the largest number of Units outstanding
during each period in respect of which a payment is
made pursuant to Section 3.05, payable on a
Distribution Date.
I. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of
Trust shall be an annual fee of $.0100 per Unit,
calculated on the largest number of Units outstanding
during each period in respect of which a payment is
made pursuant to Section 3.05. However, in no event,
except as may be otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of
less than $2,000 for such annual compensation.
J. The Initial Date of Deposit for the Trust is
March 19, 1996.
K. The minimum amount of Equity Securities to be
sold by the Trustee pursuant to Section 5.02 of the
Indenture for the redemption of Units shall be 100
shares.
PART III
A. Section 1.01(2) shall be amended to read as
follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank
(National Association), or any successor trustee
appointed as hereinafter provided."
All references to United States Trust Company of New
York in the Standard Terms and Conditions of Trust shall be
amended to refer to The Chase Manhattan Bank (National
Association).
B. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal
Account."
C. Paragraph (b) of Section 2.01 of the Standard
Terms and Conditions of Trust is amended by substituting the
following sentences for the third and fourth sentences of
such paragraph:
"The Trustee shall not accept any deposit pursuant
to this Section 2.01(b) unless the Depositor and
Trustee have each determined that the maturity value of
the Zero Coupon Obligations included in the deposit,
divided by the number of Units created by reason of the
deposit, shall equal $1.00; written certifications of
such determinations shall be executed by the Depositor
and Trustee and preserved in the Trust records with a
copy of each such written certification to Standard &
Poor's Corporation so long as Units of the Trust are
rated by them. The Depositor shall, at its expense,
cause independent public accountants to review the
Trust's holdings (i) at such time as the Depositor
determines no further deposits shall be made pursuant
to this paragraph and (ii), if earlier, as of the 90th
day following the initial deposit, for the purpose of
certifying whether the face value of the Zero Coupon
Obligations then held by the Trust divided by the Units
then outstanding equals $1.00. A copy of each written
report from the independent public accountants based on
their review will be provided to Standard & Poor's
Corporation so long as Units of the Trust are rated by
them."
D. The last sentence of the first paragraph of
Section 5.02 of the Standard Terms and Conditions of Trust
is amended by substituting "4:00 p.m. Eastern time" for
"12:00 p.m in the City of New York."
E. The second paragraph of Section 5.02 of the
Standard Terms and Conditions of Trust is amended by
substituting the following sentence for the third sentence
of the second paragraph of such Section:
"If such available funds shall be insufficient,
the Trustee shall sell such Securities as have been
designated on the current list for such purpose by the
Portfolio Supervisor, as hereinafter in this Section
5.02 provided, in amounts as the Trustee in its
discretion shall deem advisable or necessary in order
to fund the Principal Account for purposes of such
redemption, provided however, that Zero Coupon
Obligations may not be sold unless the Depositor and
Trustee, which may rely on the advice of the Portfolio
Supervisor, have determined that the face value of the
Zero Coupon Obligations remaining after such proposed
sale, divided by the number of Units outstanding after
the tendered Units are redeemed, shall equal or exceed
$1.00; a written certification as to such
determination shall be executed by the Depositor and
Trustee and preserved in the Trust records with a copy
of each such written certification to Standard & Poor's
Corporation so long as Units of the Trust are rated by
them. Within 90 days of the fiscal year end of the
Trust, the Depositor shall obtain, at its expense, an
annual written certification from the independent
public accountants as to such determination which will
also be provided to Standard & Poor's Corporation so
long as Units of the Trust are rated by them."
F. The third sentence of the seventh paragraph of
Section 5.02 of the Standard Terms and Conditions of Trust
is amended by deleting "a certification from the independent
public accountants to the effect described in the second
paragraph of this Section 5.02" and in its place inserting
"a certification from the Depositor and Trustee to the
effect described in the second paragraph of this Section
5.02."
G. Paragraph (a) of subsection II of Section 3.05 of
the Standard Terms and Conditions of Trust is hereby amended
to substitute the following sentence for the first sentence
of such paragraph:
"On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close
of business on the Record Date immediately preceding
such Distribution Date an amount per Unit equal to such
Unit holder's Income Distribution (as defined below),
plus such Unit holder's pro rata share of the balance
of the Principal Account (except for monies on deposit
therein required to purchase Contract Obligations)
computed as of the close of business on such Record
Date after deduction of any amounts provided in
Subsection I, provided, however, that with respect to
distributions other than the distribution occurring in
the month of December of each year, the Trustee shall
not be required to make a distribution from the
Principal Account unless the amount available for
distribution shall equal $1.00 per 1000 Units in the
case of Units initially offered at approximately $1.00
per Unit, or, $1.00 per 100 Units in the case of Units
initially offered at approximately $10.00 per Unit."
H. Section 3.12 of the Standard Terms and Conditions
of Trust is hereby deleted in its entirety and replaced with
the following language:
"Section 3.12. Notice to Depositor. In the event
that the Trustee shall have been notified at any time
of any action to be taken or proposed to be taken by at
least a legally required number of holders of any Zero
Coupon Obligation, if any, (including but not limited
to the making of any demand, direction, request, giving
of any notice, consent or waiver or the voting with
respect to any amendment or supplement to any
indenture, resolution, agreement or other instrument
under or pursuant to which the Zero Coupon Obligations,
if any, have been issued) the Trustee shall promptly
notify the Depositor and shall thereupon take such
action or refrain from taking any action as the
Depositor shall in writing direct; provided, however,
that if the Depositor shall not within five Business
Days of the giving of such notice to the Depositor
direct the Trustee to take or refrain from taking any
action, the Trustee shall take such action as it, in
its sole discretion, shall deem advisable.
In the event that the Trustee shall have been
notified at any time of any action to be taken or
proposed to be taken by at least a legally required
number of holders of any Equity Securities deposited in
a Trust, the Trustee shall take such action or omit
from taking any action, as appropriate, so as to insure
that the Equity Securities are voted as closely as
possible in the same manner and the same general
proportion as are the Equity Securities held by owners
other than the Trust.
In the event that an offer by the issuer of any of
the Securities or any other party shall be made to
issue new securities, or to exchange securities, for
Trust Securities, the Trustee shall reject such offer.
However, should any exchange or substitution be
effected notwithstanding such rejection or without an
initial offer, any Securities, cash and/or property
received in exchange shall be deposited hereunder and
shall be promptly sold, if securities or property, by
the Trustee pursuant to the Depositor's direction,
unless the Depositor advises the Trustee to keep such
securities or property. The Depositor may rely on the
Portfolio Supervisor in so advising the Trustee. The
cash received in such exchange and cash proceeds of any
such sales shall be distributed to Unit holders on the
next distribution date in the manner set forth in
Section 3.05 regarding distributions from the Principal
Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss
incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be
liable to any person for any action or failure to take
action pursuant to the terms of this Section 3.12 other
than failure to notify the Depositor.
Whenever new securities or property is received
and retained by the Trust pursuant to this Section
3.12, the Trustee shall, within 5 days thereafter, mail
to all Unit holders of the Trust notices of such
acquisition unless legal counsel for the Trust
determines that such notice is not required by The
Investment Company Act of 1940, as amended."
I. Section 1.01(4) shall be amended to read as
follows:
"(4)"Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
J. Article III of the Standard Terms and Conditions
of Trust is hereby amended by inserting the following
paragraphs which shall be entitled Section 3.16.:
"Section 3.16. Bookkeeping and Administrative
Expenses. As compensation for providing bookkeeping
and other administrative services of a character
described in Section 26(a)(2)(C) of the Investment
Company Act of 1940 to the extent such services are in
addition to, and do not duplicate, the services to be
provided hereunder by the Trustee or the Portfolio
Supervisor, the Depositor shall receive against a
statement or statements therefor submitted to the
Trustee monthly or annually an aggregate annual fee in
an amount which shall not exceed that dollar amount set
forth in the Prospectus times the number of Units
outstanding as of January 1 of such year except for a
year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number
of Units outstanding at the end of such month (such
annual fee to be pro rated for any calendar year in
which the Depositor provides service during less than
the whole of such year), but in no event shall such
compensation when combined with all compensation
received from other unit investment trusts for which
the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services
in any calendar year exceed the aggregate cost to the
Depositor providing services to such unit investment
trusts. Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does
not, at the time of such adjustment, exceed the
percentage of the total increase, after the date
hereof, in consumer prices for services as measured by
the United States Department of Labor Consumer Price
Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be
published. The consent or concurrence of any Unit
holder hereunder shall not be required for any such
adjustment or increase. Such compensation shall be
paid by the Trustee, upon receipt of invoice therefor
from the Depositor, upon which, as to the cost incurred
by the Depositor of providing services hereunder the
Trustee may rely, and shall be charged against the
Income and Principal Accounts on or before the
Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have
no liability to any Certificateholder or other person
for any payment made in good faith pursuant to this
Section.
If the cash balance in the Income and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.16, the Trustee
shall have the power to sell (i) Securities from the
current list of Securities designated to be sold
pursuant to Section 5.02 hereof, or (ii) if no such
Securities have been so designated, such Securities as
the Trustee may see fit to sell in its own discretion,
and to apply the proceeds of any such sale in payment
of the amounts payable pursuant to this Section 3.16,
provided, however, that Zero Coupon Obligations may not
be sold to pay for amounts payable pursuant to this
Section 3.16.
Any moneys payable to the Depositor pursuant to
this Section 3.16 shall be secured by a prior lien on
the Trust Fund except that no such lien shall be prior
to any lien in favor of the Trustee under the
provisions of Section 6.04 herein.
K. Section 1.01(3) shall be amended to read as
follows:
"(3) "Evaluator" shall mean First Trust Advisors
L.P. and its successors in interest, or any successor
evaluator appointed as hereinafter provided."
L. The first sentence of Section 3.14. shall be
amended to read as follows:
"Subject to Section 3.15 hereof, as compensation
for providing supervisory portfolio services under this
Indenture, the Portfolio Supervisor shall receive, in
arrears, against a statement or statements therefor
submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not
exceed the amount set forth under "Summary of Essential
Information-Supervisory Fee" in the Prospectus times
the number of Units outstanding as of January 1 of such
year except for a Trust during the year or years in
which an initial offering period as determined in
Section 4.01 of this Indenture occurs, in which case
the fee for a month is based on the number of Units
outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the
Portfolio Supervisor provides services during less than
the whole of such year), but in no event shall such
compensation when combined with all compensation
received from other series of the Trust for providing
such supervisory services in any calendar year exceed
the aggregate cost to the Portfolio Supervisor for
providing such services.
M. Section 3.01 of the Standard Terms and Conditions
of Trust shall be replaced in its entirety with the
following:
"Section 3.01. Initial Cost. The expenses
incurred in establishing a Trust, including the cost of
the preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture and other documents
relating to the Trust, printing of Certificates,
Securities and Exchange Commission and state blue sky
registration fees, the costs of the initial valuation
of the portfolio and audit of the Trust, the initial
fees and expenses of the Trustee, and legal and other
out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses
incurred in the preparation and printing of brochures
and other advertising materials and any other selling
expenses, to the extent not borne by the Depositor,
shall be borne by the Trust. To the extent the funds
in the Income and Principal Accounts of the Trust shall
be insufficient to pay the expenses borne by the Trust
specified in this Section 3.01, the Trustee shall
advance out of its own funds and cause to be deposited
and credited to the Income Account such amount as may
be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each
Record Date from funds on hand in the Income Account
or, to the extent funds are not available in such
Account, from the Principal Account, in the amount
deemed to have accrued as of such Record Date as
provided in the following sentence (less prior payments
on account of such advances, if any), and the
provisions of Section 6.04 with respect to the
reimbursement of disbursements for Trust expenses,
including, without limitation, the lien in favor of the
Trustee therefor and the authority to sell Securities
as needed to fund such reimbursement, shall apply to
the payment of expenses and the amounts advanced
pursuant to this Section. For the purposes of the
preceding sentence and the addition provided in clause
(4) of the first sentence of Section 5.01, the expenses
borne by the Trust pursuant to this Section shall be
deemed to have been paid on the date of the Trust
Agreement and to accrue at a daily rate over the time
period specified for their amortization provided in the
Prospectus; provided, however, that nothing herein
shall be deemed to prevent, and the Trustee shall be
entitled to, full reimbursement for any advances made
pursuant to this Section no later than the termination
of the Trust. For purposes of calculating the accrual
of organizational expenses under this Section 3.01, the
Trustee shall rely on the written estimates of such
expenses provided by the Depositor pursuant to Section
5.01."
N. Section 5.01 of the Standard Terms and Conditions
of Trust shall be amended as follows:
(i) The second sentence of the first paragraph of
Section 5.01 shall be amended by adding the following
at the conclusion thereof: ", plus (4) amounts
representing organizational expenses paid from the
Trust less amounts representing accrued organizational
expenses of the Trust, plus (5) all other assets of the
Trust"
(ii) The following shall be added at the end of
the first paragraph of Section 5.01:
Until the Depositor has informed the Trustee
that there will be no further deposits of
Additional Securities pursuant to section 2.01(b),
the Depositor shall provide the Trustee with
written estimates of (i) the total organizational
expenses to be borne by the Trust pursuant to
Section 3.01 and (ii) the total number of Units to
be issued in connection with the initial deposit
and all anticipated deposits of additional
Securities. For purposes of calculating the Trust
Fund Evaluation and Unit Value, the Trustee shall
treat all such anticipated expenses as having been
paid and all liabilities therefor as having been
incurred, and all Units as having been issued, in
each case on the date of the Trust Agreement, and,
in connection with each such calculation, shall
take into account a pro rata portion of such
expense and liability based on the actual number
of Units issued as of the date of such
calculation. In the event the Trustee is informed
by the Depositor of a revision in its estimate of
total expenses or total Units and upon the
conclusion of the deposit of additional
Securities, the Trustee shall base calculations
made thereafter on such revised estimates or
actual expenses, respectively, but such adjustment
shall not affect calculations made prior thereto
and no adjustment shall be made in respect
thereof.
O. For purposes of this Trust, Units of the Trust
will not be rated by Standard & Poor's Ratings Services and
any reference to such rating or any requirement that
information be forwarded to Standard & Poor's Ratings
Services in the Standard Terms and Conditions of Trust shall
be inapplicable.
P. For purposes of this Trust, any reference in the
Standard Terms and Conditions of Trust to "140%" shall be
replaced with "110%" in relation to the amount of cash or a
Letter of Credit needed to acquire Treasury Obligations.
Q. The second paragraph of Section 3.02 of the
Standard Terms and Conditions of Trust is hereby deleted and
replaced with the following sentence:
"Any non-cash distributions (other than a non-
taxable distribution of the shares of the distributing
corporation which shall be retained by the Trust)
received by the Trust shall be dealt with in the manner
described at Section 3.12, herein, and shall by
retained or disposed of by the Trust according to those
provisions. The proceeds of any disposition shall be
credited to the Income Account of the Trust. Neither
the Trustee nor the Depositor shall be liable or
responsible in any way for depreciation or loss
incurred by reason of any such sale."
R. The title of Section 3.15 of the Standard Terms
and Conditions of Trust shall be replaced with "Abatement of
Compensation of the Trustee, Evaluator, Portfolio Supervisor
and Sponsor," and sub-section (v) of the first sentence of
such Section 3.15 shall be amended by inserting the
following immediately after the phrase "Portfolio
Supervisor":
", the Sponsor for Bookkeeping and Administrative
Expenses"
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank (National Association) and First Trust
Advisors L.P. have each caused this Trust Agreement to be
executed and the respective corporate seal to be hereto
affixed and attested (if applicable) by authorized officers;
all as of the day, month and year first above written.
NIKE SECURITIES L.P.,Depositor
By Carlos E. Nardo
Senior Vice President
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
Trustee
(SEAL) By Thomas Porrazzo
Vice President
Attest:
Rosalia A. Raviele
Second Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Carlos E. Nardo
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Carlos E. Nardo
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 146
(Note: Incorporated herein and made a part hereof
for the Trust is the "Schedule of Investments" for the
Trust as set forth in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 19, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 146
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 146 in connection with the preparation, execution
and delivery of a Trust Agreement dated March 19, 1996 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, pursuant to which the Depositor has delivered to and
deposited the Securities listed in Schedule A to the Trust
Agreement with the Trustee and pursuant to which the Trustee has
issued to or on the order of the Depositor a certificate or
certificates representing units of fractional undivided interest
in and ownership of the Fund created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-01457)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 19, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 146
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 146 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trust of said Fund (the "Trust"),
under a Trust Agreement, dated March 19, 1996 (the "Indenture"),
between 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.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds both Treasury Obligations and Equity Securities
(collectively, the "Securities") as such terms are defined in the
Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit
holder will be treated as the owner of a pro rata portion of
the assets of the Trust under the Internal Revenue Code of
1986 (the "Code"); the income of the Trust will be treated
as income of the Unit holders thereof under the Code; and an
item of Trust income will have the same character in the
hands of a Unit holder as it would have in the hands of each
Trustee. Each Unit holder will be considered to have
received his pro rata share of income derived from the Trust
asset when such income is received by the Trust.
II. Each Unit holder will have a taxable event when
the Trust disposes of a Security (whether by sale, exchange,
liquidation, redemption, or payment at maturity) or upon the
sale or redemption of Units by such Unit holder. The price
a Unit holder pays for his Units is allocated among his pro
rata portion of each Security held by the Trust (in
proportion to the fair market values thereof on the date the
Unit holder purchases his Units) in order to determine his
tax basis for his pro rata portion of each Security held by
the Trust. The Treasury Obligations are treated as bonds
that were originally issued at an original issue discount.
Because the Treasury Obligations represent interest in
"stripped" U.S. Treasury bonds, a Unit holder's initial cost
for his pro rata portion of each Treasury Obligation held by
the 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. Under the special
rules relating to stripped bonds, 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 Treasury Obligations held by
the 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 greater than or equal to a "de minimis" amount
determined under a Treasury Regulation (the "Regulation")
issued on December 28, 1992 as described below. To the
extent 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 Treasury Obligations, this
method will generally result in an increasing amount of
income to the Unit holders each year. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends
as defined by Section 316 of the Code paid by a corporation
with respect to an Equity Security held by the Trust is
taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends
paid on such Equity Security which exceeds such current and
accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Security, and to the extent that
such dividends exceed a Unit holder's tax basis in such
Security shall be treated as capital gain. In general, any
such capital gain will be short term unless a Unit holder
has held his units for more than one year.
III. A Unit holder's portion of gain, if any, upon the
sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital
gain except in the case of a dealer or a financial
institution and will be generally long-term if the Unit
holder has held his Units for more than one year. A Unit
holder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by
a Trust will generally be considered a capital loss except
in the case of a dealer or a financial institution and will
be generally long-term if the Unit holder has held his Units
for more than one year.
The Code provides a complex set of rules governing the
accrual of original issue discount, including special rules
relating to "stripped" debt instruments such as the Treasury
Obligations. These rules provide that original issue discount
generally accrues on the basis of a constant compound interest
rate. Special rules apply if the purchase price of a Treasury
Obligation exceeds its original issue price plus the amount of
original issue discount which would have previously accrued,
based upon its issue price (its "adjusted issue price").
Similarly, these special rules would apply to a Unit holder if
the tax basis of his pro rata portion of a Treasury Obligation
issued with original issue discount exceeds his pro rata portion
of its adjusted issue price. The application of these rules will
also vary depending on the value of the Treasury Obligations on
the date a Unit holder acquires his Units, and the price a Unit
holder pays for his Units. In addition, as discussed above, the
Regulation provides that the amount of original issue discount on
a stripped bond is considered zero if the actual amount of
original issue discount on such stripped bond as determined under
Section 1286 of the Code is less than a "de minimis" amount,
which, the Regulation provides, is the product of (i) 0.25
percent of the stated redemption price at maturity and (ii) the
number of full years from the date the stripped bond is purchased
(determined separately for each new purchaser thereof) to the
final maturity date of the bond.
Each Unit holder's pro rata share of each expense paid by
the Trust is deductible by the Unit holder to the same extent as
though the expense had been paid directly by him, subject to the
following limitation. It should be noted that as a result of the
Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation
fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's
adjusted gross income. Unit holders may be required to treat
some or all of the expenses of the Trust as miscellaneous
itemized deductions subject to this limitation.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-01457)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
March 19, 1996
The Chase Manhattan Bank
(National Association), as Trustee of
The First Trust Special
Situations Trust, Series 146
Kansas Growth & Treasury Securities
Trust, Series 1
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 146
Kansas Growth & Treasury Securities Trust, Series 1
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
146,consisting of Kansas Growth & Treasury Securities Trust,
Series 1 (the "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated October 15, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture"), among Nike Securities L.P., as Depositor (the
"Depositor"); First Trust Advisors L.P., as Evaluator; First
Trust Advisors L.P., as Portfolio Supervisor and The Chase
Manhattan Bank (National Association), as Trustee (the
"Trustee"). Pursuant to the terms of the Indenture, units of
fractional undivided interest in the Trusts (the "Units") will be
issued in the aggregate number set forth in the Indenture.
We have examined and are familiar with originals or certified
copies, or copies otherwise identified to our satisfaction, of
such documents as we have deemed necessary or appropriate for the
purpose of this opinion. In giving this opinion, we have relied
upon the two opinions, each dated today and addressed to the
Trustee, of Chapman and Cutler, counsel for the Depositor, with
respect to the matters of law set forth therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as a
corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New York,
the income of the Trust will be considered the income of the
holders of the Units.
We consent to the filing of this opinion as an exhibit to the
Registration Statement (No. 333-01457) filed with the Securities
and Exchange Commission with respect to the registration of the
sale of the Units and to the references to our name under the
captions "What is the Federal Tax Status of Unit Holders?" and
"Legal Opinions" in such Registration Statement and the
preliminary prospectus included therein.
Very truly yours,
Carter, Ledyard & Milburn
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
March 19, 1996
The Chase Manhattan Bank
(National Association), as Trustee of
The First Trust Special Situations
Trust, Series 146
Kansas Growth & Treasury Securities
Trust, Series 1
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 146
Kansas Growth & Treasury Securities Trust, Series 1
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
(National Association) ("Chase") in connection with the execution
and delivery of a Trust Agreement ("the Trust Agreement") dated
today's date (which Trust Agreement incorporates by reference
certain Standard Terms and Conditions of Trust dated October 15,
1991, and the same are collectively referred to herein as the
"Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator; First
Trust Advisors L.P., as Portfolio Supervisor; and Chase, as
Trustee (the "Trustee"), establishing The First Trust Special
Situations Trust, Series 146, consisting of Kansas Growth &
Treasury Securities Trust, Series 1 (the "Trusts"), and the
execution by Chase, as Trustee under the Indenture, of a
certificate or certificates evidencing ownership of units (such
certificate or certificates and such aggregate units being herein
called "Certificates" and "Units"), each of which represents an
undivided interest in the respective Trust which consists of
"zero coupon" U.S. Treasury Bonds and common stocks (including,
confirmations of contracts for the purchase of certain stocks and
bonds not delivered and cash, cash equivalents or an irrevocable
letter of credit or a combination thereof, in the amount required
for such purchase upon the receipt of such stocks and bonds),
such stocks and bonds being defined in the Indenture as
Securities and listed in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing national banking
association authorized to exercise trust powers.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has duly executed and delivered to
or upon the order of the Depositor a Certificate or Certificates
evidencing ownership of the Units, registered in the name of the
Depositor. Upon receipt of confirmation of the effectiveness of
the registration statement for the sale of the Units filed with
the Securities and Exchange Commission under the Securities Act
of 1933, the Trustee may deliver such other Certificates, in such
names and denominations as the Depositor may request, to or upon
the order of the Depositor as provided in the Closing Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and be reimbursed,
without interest, for any such advances from funds in the
interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
March 19, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 146
Gentlemen:
We have examined the Registration Statement File No.
333-01457 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Vice President
<TABLE> <S> <C>
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