SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES 150
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title and Amount of
Securities Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee
(as required by Rule 24f-2): $500.00
H. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED MAY 31, 1996
Real Estate Trust, Series 1
The Trust. The First Trust(registered trademark) Special Situations
Trust, Series 150 (the "Trust") is a unit investment trust consisting of
a diversified portfolio of common stocks issued by publicly traded
equity real estate investment trusts, known as REITs.
The objective of the Trust is to provide for potential capital
appreciation and potential dividend income by investing the Trust's
portfolio in common stocks issued by publicly traded equity real estate
investment trusts, which the Sponsor believes have the potential for
outstanding financial performance and capital appreciation (the
"Securities"). See "Schedule of Investments." The Trust has a mandatory
termination date ("Mandatory Termination Date" or "Trust Ending Date"),
as set forth under "Summary of Essential Information." There is, of
course, no guarantee that the objective of the Trust will be achieved.
Each Unit of the Trust represents an undivided fractional interest in
all the Securities deposited in the Trust.
The Securities deposited in the Trust's portfolio have no fixed maturity
date, and the value of these underlying Securities will fluctuate with
changes in the values of stocks in general, and the real estate market
in particular. 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 or cash (including a letter of credit) with
instructions to purchase additional Securities in the Trust. Such
deposits of additional Securities or cash will be done in such a manner
that the original proportionate relationship amongst the individual
issues of the Securities shall be maintained. Any deposit by the Sponsor
of additional Securities, or the purchase of additional Securities
pursuant to a cash deposit, will duplicate, as nearly as is practicable,
the original proportionate relationship established on the Initial Date
of Deposit, 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 the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the ask prices of over-the-
counter traded 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 4.90% (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 the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the bid prices of over-the-
counter traded 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 4.90% (equivalent to 5.152% of the net amount invested)
subject to reduction beginning July 1, 1997. The minimum amount which an
investor may purchase of the Trust is $2,000 ($1,000 for Individual
Retirement Accounts or other retirement plans). The sales charge is
reduced on a graduated scale for sales involving at least 10,000 Units.
See "How is the Public Offering Price Determined?"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
J. C. BRADFORD & CO.
The date of this Prospectus is , 1996
Page 1
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trust, net of expenses of the Trust,
will be paid on the Distribution Date to Unit holders of record on the
Record Date, as set forth in the "Summary of Essential Information." On
, the Initial Distribution Date, Unit holders of
record as of will receive $ per Unit.
Beginning in , the regular estimated monthly
distribution will be $ per Unit. 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. 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 and the Underwriter intend to
maintain a market for Units of the Trust and offer to repurchase such
Units at prices which are based on the aggregate underlying value of
Securities in the Trust (generally determined by the closing sale prices
of listed Securities and the bid prices of over-the-counter traded
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 also be based upon the aggregate underlying value of the Securities
in the Trust (generally determined by the closing sale prices of listed
Securities and the ask prices of over-the-counter traded 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 through redemption at prices based upon the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the bid prices of over-the-
counter traded 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?" Unit holders electing a distribution of shares of
Securities should be aware that the transaction is subject to taxation
and Unit holders will recognize gain based on the appreciation in value
of the Securities received. See "What is the Federal Tax Status of Unit
Holders?"
Termination. Commencing on the Mandatory Termination Date, Securities
will begin to be sold as prescribed by the Sponsor. The Trustee shall
provide written notice of any termination of the Trust to Unit holders
which will specify when Unit holders may surrender their certificates
for cancellation. Unit holders electing a distribution of shares of
Securities should be aware that the transaction is subject to taxation
and Unit holders will recognize gain based on the appreciation in value
of the Securities received. Unit holders will receive a cash
distribution within a reasonable time after the Trust is terminated. See
"Rights of Unit Holders-How are Income and Capital Distributed?" and
"Other Information-How May the Indenture be Amended or Terminated?"
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 Securities or the general condition of the stock
market, changes in the real estate market, vacancy rates and
competition, volatile interest rates or economic recession. In addition,
because certain REITs may be subject to a management fee, an investment
by the Trust in such Securities may result in duplicative expenses. The
Trust's portfolio is not managed and Securities will not be sold by the
Trust regardless of market fluctuations, although some Securities may be
sold under certain limited circumstances. See "What are Securities?-Risk
Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1996
Underwriter: J. C. Bradford & Co.
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National Association)
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Securities per Unit $
Sales Charge of 4.90% of the Public Offering Price per Unit
(5.152% of the net amount invested) $
Public Offering Price per Unit (3) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate
underlying value of Securities) (4) $
Calculation of Net Annual Dividends per Unit:
Estimated Gross Annual Dividends per Unit (5) $
Less: Estimated Annual Expense per Unit $( )
Estimated Net Annual Dividends per Unit $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number
First Settlement Date
Mandatory Termination Date
Discretionary Liquidation Amount The Trust may be terminated if the value thereof is less than 40% of the total
value of Securities deposited in the Trust during the primary offering period.
Trustee's Annual Fee $.0074 per Unit outstanding.
Evaluator's Annual Fee (6) $.0017 per Unit outstanding, payable to an affiliate of the Sponsor. 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 (7) Maximum of $.0035 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Estimated Annual Organizational
and Offering Expenses (8) $.0028
Income Distribution Record Date Fifteenth day of each month commencing August 15, 1996.
Income Distribution Date (9) Last day of each month commencing August 31, 1996.
</TABLE>
[FN]
______________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) Each 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 Security is not so listed, at the closing
ask price thereof.
(3) 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 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 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.
(4) See "How May Units be Redeemed?"
(5) Estimated annual dividends are based on the most recent quarterly
dividend. Dividends will consist of ordinary income, capital gains
and/or return of capital.
(6) The minimum and maximum evaluation fee for any one calendar year will
be $1,000 and $2,500, respectively.
(7) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit.
(8) 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 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.
(9) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 3
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 150 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 (the "Trust"). This Series consists of an underlying
separate unit investment trust designated as: Real Estate Trust, Series
1. 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 common stocks issued by
publicly traded equity real estate investment trusts, known as REITs
(the "REIT" or "REITs"). The Trust includes a diversified portfolio of
REITs, 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 the Trust.
The objective of the Trust is to provide for potential capital
appreciation and potential for increasing dividend income through an
investment in securities issued by REITs. Additionally, the Trust allows
individual investors the opportunity to invest in the real estate market
in a more affordable, practical and liquid alternative to purchasing
individual properties.
The Trust was designed to provide a unique, simple way to invest in one
of the greatest wealth-producing assets in history-real estate. This
opportunity is made possible because of an exciting transformation in
the way American real estate is financed, owned and managed. Through
REITs, ownership of commercial real estate is affordable and liquid. A
REIT is a corporation or business trust which combines the capital of
many investors to acquire real estate. REITs act much like a mutual fund
for real estate. REITs make investments in a diverse array of real
estate, from shopping centers and office buildings to apartment
complexes, hotels, hospitals and healthcare facilities. Investors
receive income from the rents or mortgage payments received from the
properties and enjoy capital gains if properties are sold at a profit.
REITs do not pay federal corporate income tax and often are excluded
from state taxation. This advantaged tax treatment means there is no
double taxation of income to the shareholders. REITs are legally
required to distribute 95% of net income and dividends to investors, in
this case, the Trust. Distributions from the Trust will consist of
ordinary income, capital gains and/or return of principal. The amount of
these distributions will vary, according to the type of distribution
that is made.
All REITs selected for this Trust are listed NYSE or NASDAQ securities
and have an average capitalization of $400 million. This assures daily
liquidity of Trust Units which is a key benefit not generally available
with direct ownership of real estate.
This evolution in the real estate market, which is still largely
undiscovered by the investing public, provides superior opportunities
for above-average total returns from relatively high monthly dividend
income, capital gains, and some tax advantaged treatment. REIT share
values are likely to be propelled higher throughout the `90s, in the
opinion of the Sponsor, by improving real estate values, good operating
results, and increased demand for REIT shares as this improved vehicle
for ownership is discovered by individuals and corporations.
The Sponsor of this Trust believes that the Real Estate Trust, Series 1
offers a vehicle for investors to participate financially in the real
estate market through a diversified portfolio. The diversification of
assets in the Trust does not eliminate the risk of loss always inherent
in the ownership of securities.
Other than owning a primary residence, individual investors often have
few practical opportunities to invest in the real estate market. The
Trust seeks to offer a more affordable, practical and liquid alternative
to owning individual properties. The Trust's portfolio seeks to provide
greater diversification in several respects: each REIT in the portfolio
is operated by a different management team; various regions of the
Page 4
country, each with its own economic conditions and cycles, are
represented in the Trust's portfolio; and different REITs specialize in
different sectors, such as apartment complexes, office buildings,
shopping malls, industrial parks and hotels. The Sponsor believes that
income-oriented investors should consider a diversified portfolio of
REITs, such as the Trust, for a variety of reasons: potential for high
current yields are available providing dividend income and a degree of
protection in declining markets; solid dividend growth is possible due
to recent strength in industry earnings (funds from operations); and
REIT stock valuations are currently low relative to the yield on U.S.
Treasury securities, providing the potential for capital appreciation.
In addition, in the Sponsor's opinion, the following factors should also
be considered: REITs should rise in value as general investor skepticism
about real estate shifts to optimism; well-capitalized REITs are often
buying properties or mortgages at discounts to their book value
providing upside potential; during inflationary periods, both real
estate values and rents typically rise, benefiting the REIT investor;
and long-term capital earmarked for REITs is expected to grow separately
in coming years due to relaxed barriers for pension plan investing.
With the deposit of the Securities on the Initial Date of Deposit, the
Sponsor established a percentage relationship between the amounts of
individual 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, or cash with
instructions to purchase 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 deposit by the Sponsor of additional
Securities, or the purchase of additional Securities pursuant to a cash
deposit, 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?" The
original percentage relationship of each Security to the Trust is set
forth herein under "Schedule of Investments." Since the prices of the
underlying Securities will fluctuate daily, the ratio, on a market value
basis, will also change daily. The portion of Securities represented by
each Unit will not change as a result of the deposit of additional
Securities in the Trust. If the Sponsor deposits cash, however, existing
and new investors may experience a dilution of their investment and a
reduction in their anticipated income because of fluctuations in the
prices of the Securities between the time of the cash deposit and the
purchase of the Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Securities as close to the evaluation time or as close to the
evaluation price as possible.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Securities as set forth under
"Summary of Essential Information." 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 or cash 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 each 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., an
Page 5
affiliate of the Sponsor, will receive an annual supervisory fee, which
is not to exceed the amount set forth under "Summary of Essential
Information," for providing portfolio supervisory services for 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. The
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 the 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 set forth
in "Summary of Essential Information". Such fee will be based upon the
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
of the Trust to the extent funds are available, and then from the
Capital Account of the Trust. 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. However, the Trustee may bear from its own
resources certain expenses relating to the Trust, including organization
costs and brokerage commissions. The Trustee's and Evaluator's 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.
Since the 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 Securities will have
to be sold to meet Trust expenses. These sales may result in capital
gains or losses to Unit holders. See "What is the Federal Tax Status of
Unit Holders?"
Page 6
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, the
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.0050 per Unit. 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 Trust, which is an association taxable as a corporation under the
Internal Revenue Code, intends to qualify on a continuing basis for
special federal income tax treatment as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code"). If the
Trust so qualifies and timely distributes to Unit holders 90% or more of
its taxable income (without regard to its net capital gain, i.e., the
excess of its long-term capital gain over its net short-term capital
loss), it will not be subject to Federal income tax on the portion of
its taxable income (including any net capital gain) that it distributes
to Unit holders. In addition, to the extent the Trust distributes to
Unit holders at least 98% of its taxable income (including any net
capital gain), it will not be subject to the 4% excise tax on certain
undistributed income of "regulated investment companies." The Trust
intends to timely distribute its taxable income (including any net
capital gains) to avoid the imposition of Federal income tax or the
excise tax.
The Trust intends to file its Federal income tax returns on a calendar
year basis. In any taxable year of the Trust, the distributions of the
Trust's income, other than distributions which are designated as capital
gain dividends, will be taxable as ordinary income to the Unit holders.
To the extent that distributions to a Unit holder in any year exceed the
Trust's current and accumulated earnings and profits, they will be
treated as a return of capital and will reduce the Unit holder's basis
in his Units, and to the extent that they exceed his basis, will be
treated as a gain from the sale of his Units as discussed below.
Distributions from the Trust will not be eligible for the 70% dividends
received deduction for corporations. Although distributions generally
will be treated as distributed when paid, distributions declared in
October, November or December, payable to Unit holders of record on a
specified date in one of those months and paid during January of the
following year will be treated as having been distributed by the Trust
(and received by the Unit holders) on December 31 of the year such
distributions are declared. Under the Code, certain miscellaneous
itemized deductions, such as investment expenses, tax return preparation
fees and employee business expenses, will be deductible by individuals
only to the extent they exceed 2% of adjusted gross income.
Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Trust as long as the
Units of the Trust are held by or for 500 or more persons at all times
during the taxable year or another exception is met. In the event the
Units of the Trust are held by fewer than 500 persons, additional
taxable income will be realized by the individual and Unit holders in
excess of the distributions received from the Trust.
Distributions of the Trust's net capital gain which the Trust designates
as capital gain dividends will be taxable to Unit holders as long-term
capital gains, regardless of the length of time the Units have been held
by a Unit holder. However, if a Unit holder receives a long-term capital
gain dividend (or is allocated a portion of the Trust's undistributed
long-term capital gain) and sells his Units at a loss prior to holding
them for 6 months, such loss will be recharacterized as long-term
capital loss to the extent of such long-term capital gain received as a
dividend or allocated to a Unit holder. Distributions in partial
liquidation reflecting the proceeds of prepayments, redemptions,
maturities (including monthly mortgage payments of principal) or sales
of Securities (exclusive of net capital gain) will not be taxable to
Unit holders of such Trust to the extent that they represent a return of
capital for tax purposes. The portion of distributions which represents
a return of capital will, however, reduce a Unit holder's basis in his
Units, and to the extent they exceed the basis of his Units will be
taxable as a capital gain. A Unit holder may recognize a taxable gain or
loss when his Units are sold or redeemed. Such gain or loss will
generally constitute either a long-term or short-term capital gain or
loss depending upon the length of time the Unit holder has held his
Units. Any loss of Units held six months or less will be treated as long-
Page 7
term capital loss to the extent of any long-term capital gains dividends
received (or deemed to have been received) by the Unit holder with
respect to the Units. For taxpayers other than corporations, net capital
gains are presently subject to a maximum stated marginal tax rate of 28
percent. 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. A capital loss is long-term if the asset is held for more than
one year and short-term if held for one year or less.
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.
Each Unit holder of the Trust shall receive an annual statement
describing the tax status of the distributions paid by the Trust.
Investment in the Trust may be particularly well suited for purchase by
funds and accounts of individual investors that are exempt from Federal
income taxes such as Individual Retirement Accounts, Keogh Plans,
pension funds and other tax-deferred retirement plans. (See "Why are
Investments in the Trust Suitable for Retirement Plans?")
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 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.
As discussed in "Rights of Unit holders-How May Units be Redeemed?",
under certain circumstances a Unit holder who owns at least 2,500 Units
may request an In Kind Distribution upon the redemption of Units or the
termination of the Trust. Unit holders electing an In Kind Distribution
of shares of the Securities should be aware that the transaction is
subject to taxation and Unit holders will recognize gain based on the
value of the Securities received.
The foregoing discussion relates only to the Federal income tax status
of the Trust and to the tax treatment of distributions by the Trust to
United States Unit holders.
A Unit holder who is a foreign investor (i.e., an investor other than a
United States citizen or resident or a United States corporation,
partnership, estate or trust) should be aware that, generally, subject
to applicable tax treaties, distributions from the Trust which
constitute dividends for Federal income tax purposes (other than
dividends which the Trust designates as capital gain dividends) will be
subject to United States income taxes, including withholding taxes.
However, distributions received by a foreign investor from the Trust
that are designated by the Trust as capital gain dividends should not be
subject to United States Federal income taxes, including withholding
taxes, if all of the following conditions are met: (i) the capital gain
dividend is not effectively connected with the conduct by the foreign
investor of a trade or business within the United States, (ii) the
foreign investor (if an individual) is not present in the United States
for 183 days or more during his or her taxable year, and (iii) the
foreign investor provides all certification which may be required of his
status (foreign investors may contact the Sponsor to obtain a Form W-8
which must be filed with the Trustee and refiled every three calendar
years thereafter). Foreign investors should consult their tax advisers
with respect to United States tax consequences of ownership of Units.
Units in the Trust and Trust distributions may also be subject to state
and local taxation and Unit holders should consult their tax advisers in
this regard.
Distributions reinvested into additional Units of the Trust will be
taxed to a Unit holder in the manner described above (i.e., as ordinary
income, long-term capital gain or as a return of capital).
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
Page 8
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.
PORTFOLIO
What are the Securities?
The Trust consists of different issues of Securities issued by publicly
traded equity real estate investment trusts, known as REITs, and which
are listed on a national securities exchange or the NASDAQ National
Market System or traded in the over-the-counter market. See "What are
the Securities Selected for Real Estate Trust, Series 1?" for a general
description of the companies.
Risk Factors. The Trust consists of such of the 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 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 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 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). See "How May Securities be Removed from the Trust?"
Securities, however, will not be sold by the Trust to take advantage of
market fluctuations or changes in anticipated rates of appreciation or
depreciation.
Whether or not the Securities are listed on a national securities
exchange, the principal trading market for the Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading
market for the Securities may depend on whether dealers will make a
market in the Securities. There can be no assurance that a market will
be made for any of the Securities, that any market for the Securities
will be maintained or of the liquidity of the Securities in any markets
made. In addition, the Trust may be restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor. The price at
which the Securities may be sold to meet redemptions and the value of
the Trust will be adversely affected if trading markets for the
Securities are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Securities or the general
condition of the common stock market may worsen, and the value of the
Securities and therefore the value of the Units may decline. Common
stocks are especially susceptible to general stock market movements and
to volatile increases and decreases of value as market confidence in and
perceptions of the issuers change. These perceptions are based on
unpredictable factors, including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, and global or regional political,
economic or banking crises. 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
Page 9
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 they 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 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.
Real Estate Investment Trusts. An investment in the Trust should be made
with an understanding of the risks inherent in an investment in REITs
specifically and in real estate generally (in addition to securities
market risks). REITs are financial vehicles that have as their objective
the pooling of capital from a number of investors in order to
participate directly in real estate ownership or financing. REITs are
generally fully integrated operating companies that have interests in
income-producing real estate. REITs are differentiated by the types of
real estate properties held and the actual geographic location of
properties and fall into two major categories: equity REITs emphasize
direct property investment, holding their invested assets primarily in
the ownership of real estate or other equity interests, while mortgage
REITs concentrate on real estate financing, holding their assets
primarily in mortgages secured by real estate. As of the Initial Date of
Deposit, the Trust contains only equity REITs. REITs obtain capital
funds for investment in underlying real estate assets by selling debt or
equity securities on the public or institutional capital markets or by
bank borrowing. Thus, the returns on common equities of the REITs in
which the Trust invests will be significantly affected by changes in
costs of capital and, particularly in the case of highly "leveraged"
REITs (i.e., those with large amounts of borrowings outstanding), by
changes in the level of interest rates. The objective of an equity REIT
is to purchase income-producing real estate properties in order to
generate high levels of cash flow from rental income and a gradual asset
appreciation, and they typically invest in properties such as office,
retail, industrial, hotel and apartment buildings and healthcare
facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
The underlying value of the Securities and the Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
Page 10
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in the Trust.
The value of the REITs may at times be particularly sensitive to
devaluation in the event of rising interest rates. Equity REITs are less
likely to be affected by interest rate fluctuations than mortgage REITs
and the nature of the underlying assets of an equity REIT may be
considered more tangible than that of a mortgage REIT. Equity REITs are
more likely to be adversely affected by changes in the value of the
underlying property it owns than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in the Trust may
be adversely affected by increases or decreases in property tax rates
and assessments or reassessments of the properties underlying the REITs
by taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary. In an effort to reduce the impact of the
risks discussed above, the Underwriter has selected REITs that are
diversified among various real estate sectors and geographic locations.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in the Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in the Trust.
Unit holders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. As the
holder of the 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.
The Underwriter has acquired or will acquire the Securities for the
Sponsor and thereby may benefit. The Underwriter in its general
securities business acts as agent or principal in connection with the
purchase and sale of securities, including the Securities in the Trust,
and may act as a market maker in certain of the Securities. The
Underwriter also from time to time may issue reports on and make
recommendations relating to securities, which may include the
Securities. The Underwriter has performed investment banking services
for certain of the issuers of the Securities.
Page 11
What are the Securities Selected for Real Estate Trust, Series 1?
RETAIL
CBL & Associates Properties, Inc., headquartered in Chattanooga,
Tennessee, is a real estate investment trust which owns regional malls
and community shopping centers, primarily in the Southeast and select
markets in the Northeastern United States. The company owns more than
100 properties totaling almost 20 million square feet, manages an
additional 2.8 million square feet of non-owned shopping centers, and
currently has under construction eight new shopping centers and one mall
redevelopment and expansion project totaling 1.6 million square feet.
Glimcher Realty Trust, a business operated as the Trust since 1994 and
as The Glimcher Company since 1959, is a fully integrated, self-
administered and self-managed real estate investment trust headquartered
in Columbus, Ohio. The company owns and manages a total of 92
properties, in excess of 14.7 million square feet of gross leasable
area, located in 22 states. The company's focus is to own, lease,
manage, acquire and develop enclosed regional malls, community shopping
centers and single tenant retail properties.
HGI Realty, Inc., of Norton Shores, Michigan, is one of the largest
developers, owners and operators of outlet centers in the United States.
The company is a self-administered real estate investment trust which
operates as a fully integrated real estate company that owns 35 outlet
centers with 8.5 million square feet of gross leasable area, in 19 states.
JDN Realty Corporation, headquartered in Atlanta, Georgia, is a real
estate development company specializing in the development and asset
management of retail shopping centers anchored by value-oriented
retailers. The company owns and operates 41 properties containing
approximately 4.9 million square feet of gross leasable area, located in
9 states, primarily in the Southeastern United States.
Simon Property Group, of Indianapolis, Indiana, owns, develops, manages,
leases, expands and acquires regional malls, community shopping centers
and specialty and mixed-use properties throughout the United States. It
currently owns or has an interest in 122 properties which consist of
existing properties in 28 states containing a total of 62 million square
feet, of which approximately 37 million square feet is owned by the
company. Simon Property Group, together with its affiliated management
company, currently manages more than 75 million square feet of gross
leasable area in retail and mixed-use properties.
MULTIFAMILY
Associated Estates Realty Corporation, headquartered in Richmond
Heights, Ohio, is a self-administered and self-managed real estate
investment trust specializing in the development, acquisition, ownership
and management of multifamily properties in the Midwest. The company
currently owns or is a joint venture partner in more than 15,000 suites
in 81 multifamily properties in Ohio, Michigan and Western Pennsylvania.
Camden Property Trust, headquartered in Houston, Texas, owns and
operates 49 apartment properties containing more than 16,000 units in
Houston, Dallas, Austin, Corpus Christi and El Paso, Texas and Tucson,
Arizona. The company currently has four properties containing 1,552
units under construction and three properties containing more than 1,000
units in its development schedule. Upon completion of those properties,
the company's portfolio will increase to almost 20,000 units in 56
properties.
Essex Property Trust, Inc., of Palo Alto, California, is a fully
integrated real estate operating company. Self-administered and self-
managed, the company focuses on multifamily residential properties in
the San Francisco, Seattle and Portland metropolitan areas and in
selected Southern California markets. Essex currently has ownership
interests in 23 multifamily properties, totaling 4,924 units, accounting
for approximately 89% of its revenue.
Gables Residential Trust, headquartered in Atlanta, Georgia, is a
vertically integrated real estate operating company known for its
experienced capabilities in the management, development, acquisition and
construction of Class A multifamily apartment communities in the
Southeastern and Southwestern United States. Focusing its interests on
the principal cities of Georgia, Texas and Tennessee, the company
currently owns more than 11,000 completed and stabilized apartment
buildings and has an additional dozen communities with more than 3,000
apartment homes under development and/or lease-up.
Page 12
Walden Residential Properties, Inc., of Dallas, Texas, is a self-
administered and self-managed real estate investment trust which owns
garden apartment communities serving middle-income apartment residents.
With regional offices in Texas, Arizona, Oklahoma, and Georgia, Walden
currently owns and operates 54 properties with 16,821 apartment units
located principally in Texas, Oklahoma, Florida, Arizona and Utah.
Wellsford Residential Property Trust, headquartered in New York, New
York, is a fully integrated, self-administered equity REIT that owns and
operates 75 multifamily communities containing more than 18,000
apartment units located in the Southwest and Pacific Northwest regions
of the United States.
OFFICE/INDUSTRIAL
First Industrial Realty Trust, headquartered in Chicago, Illinois, has
acquired, expanded and developed an aggregate of 95 in-service
properties comprising 10.5 million square feet of industrial space since
becoming a public company in June 1994. The company has a significant
presence in the Midwest where it owns, manages, acquires and develops
bulk warehouse and light industrial properties. It currently owns 316 in-
service properties totaling more than 27.6 million square feet and is
landlord to more than 800 tenants.
Liberty Property Trust, headquartered in Malvern, Pennsylvania, is a
self-administered real estate investment trust which owns and manages
one of the largest portfolios of quality suburban industrial and office
properties in the United States. A fully-integrated real estate firm,
the company currently owns and operates 216 properties with more than
700 tenants in over 17 million square feet of space and develops,
acquires, leases and manages a growing portfolio of properties in the
Southeastern and MidAtlantic states.
HEALTHCARE
Capstone Capital Corp., headquartered in Birmingham, Alabama, is a self-
administered real estate investment trust which currently owns, leases
and provides mortgage financing for 48 healthcare related properties
located in 13 states that are diversified as to operator, facility type
and healthcare segment.
Health and Retirement Properties Trust, headquartered in Newton,
Massachusetts, is a real estate investment trust which has more than $1
billion in real estate investments, principally in nursing homes,
retirement centers and medical office buildings.
Healthcare Realty Trust, headquartered in Nashville, Tennessee, provides
real estate solutions to the healthcare industry through property
management, leasing and development services, construction capital and
the acquisition of existing healthcare properties. The current portfolio
of this equity real estate investment trust consists of 65 properties,
comprised of seven facility types, leased to 14 healthcare providers in
35 markets throughout the United States. The company currently manages
or is developing 42 properties nationwide.
National Health Investors, Inc., of Murfreesboro, Tennessee, specializes
in the purchase and leaseback of healthcare real estate and in making
mortgage loans to healthcare operators. The company currently has
approximately $629.0 million in investments in 233 healthcare facilities
located in 24 states.
Omega Healthcare Investors, Inc., headquartered in Ann Arbor, Michigan,
is a real estate investment trust investing in and providing financing
to the long-term care industry. Its portfolio includes almost 200
healthcare facilities, located in 20 states and operated by 25
independent healthcare operating companies. Omega is also an owner of
and provides advisory services to Principal Healthcare Finance Limited,
a company which owns and leases 23 nursing home facilities located in
the United Kingdom.
HOTEL
Equity Inns, Inc., headquartered in Memphis, Tennessee, is a real estate
investment trust which focuses on acquiring leading brands in the
premium limited-service and extended-stay hotel sectors as well as
selected full-service hotels. In addition to 30 Hampton Inns, the
company owns or has under contract 3 Residence Inns, 3 Holiday Inns, 3
Comfort Inns, 5 Homewood Suites, and 1 Holiday Inn Express.
Hospitality Properties Trust, of Newton, Massachusetts, is a real estate
investment trust which provides sale-leaseback financing to unaffiliated
hotel operating companies. The company has investments totaling
approximately $814 million in 82 hotels located in 26 states.
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DIVERSIFIED
Eastgroup Properties, headquartered in Jackson, Mississippi, is an
equity real estate investment trust which owns industrial facilities and
apartment complexes as well as selected office buildings. The trust
concentrates on the major markets in the Southeastern and Southwestern
states, with special emphasis on Florida and Texas.
TRIPLE NET LEASE
Commercial Net Lease Realty, of Orlando, Florida, is an equity real
estate investment trust that invests in high-quality, freestanding
retail properties subject to long-term, net leases with major retail
tenants such as Barnes & Noble, Eckerd and OfficeMax. The company
currently owns 167 properties in 27 states.
TriNet Corporate Realty Trust, Inc., headquartered in San Francisco,
California, is a real estate investment trust specializing in the
acquisition and management of predominantly office and industrial
properties net leased to corporations nationwide, including
strategically important distribution and headquarters locations. All of
TriNet's 101 properties, totaling approximately 12 million square feet
in 25 states, are leased by a diverse group of U.S. corporations. The
company's triple net leases typically provide that its tenants pay for
most or all property operating expenses while the contractual rental
income escalates.
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 Securities 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 Securities may appreciate or depreciate in value (or pay
dividends), depending on the full range of economic and market
influences affecting these securities.
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 Security will not be delivered ("Failed Contract Obligations")
to the Trust, the Sponsor is authorized under the Indenture to direct
the Trustee to acquire other Securities ("Replacement Securities"). Any
Replacement Security will 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
paragraphs 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 the 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, or cash (including a letter of credit) with instructions to
purchase additional Securities, in the Trust and the issuance of a
corresponding number of additional Units. If the Sponsor deposits cash,
existing and new investors could experience a dilution of their
investments and a reduction in anticipated income because of
fluctuations in the prices of the Securities between the time of the
cash deposit and the actual purchase of the Securities and because the
Trust will pay the brokerage fees associated therewith.
The Trust consists of the Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) that 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
Page 14
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 with respect to 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.
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
underlying value of the Securities in the Trust, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust, plus a sales
charge of 4.90% (equivalent to 5.152% of the net amount invested)
subject to reduction beginning July 1, 1997, divided by the amount of
Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Securities in the Trust,
plus or minus cash, if any, in the Income and Capital Accounts of the
Trust 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 also based on the aggregate
underlying value of the Securities in the Trust, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust, plus a maximum
sales charge of 4.90% of the Public Offering Price (equivalent to 5.152%
of the net amount invested) divided by the number of outstanding Units
of the Trust.
The minimum amount which an investor may purchase of the Trust is $2,000
($1,000 for Individual Retirement Accounts and other retirement plans).
The applicable sales charge for both primary and secondary market sales
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>
Underwriter
Number of Units Discount Sales Charge Concession
_______________ ________ ___________ ___________
<S> <C> <C> <C>
10,000 to 24,999 0.90% 4.00% 2.85%
25,000 to 49,999 1.90% 3.00% 1.85%
50,000 to 99,999 2.90% 2.00% .85%
100,000 or more 3.65% 1.25% .50%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
Underwriter, 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 the Underwriter or 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 Underwriter, 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, siblings,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law, and
trustees, custodians or fiduciaries for the benefit of such persons) of
the Sponsor, Underwriter and broker/dealers, banks or other selling
agents and their subsidiaries, the sales charge is reduced by 3.75% of
the Public Offering Price for purchases of Units during the primary and
secondary public offering periods. In addition, unit holders of any
utility trusts or any other trusts of similar objectives can exchange
any units they hold of such trusts for Units of the Trust subject only
to a sales charge of 3.9%.
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or
Page 15
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 may purchase Units in the primary or
secondary market at the Public Offering Price less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
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 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 on the
basis of the aggregate underlying value of the Securities therein plus
or minus cash, if any, in the Income and Capital Accounts of the Trust.
The aggregate underlying value of the Securities will be determined in
the following manner: if the 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
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 prices 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 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 aggregate underlying
value of the Securities therein, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. The aggregate underlying value of the Securities for secondary
market sales is calculated in the same manner as described above for
sales made during the initial offering period with the exception that
bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. 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 or cash 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 or cash in
the Trust and create additional Units. Units reacquired by the Sponsor
during the initial offering period (at prices based upon the aggregate
underlying value of the Securities in the Trust plus or minus a pro rata
share of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon the
termination of the initial offering period, unsold Units created or
reacquired during the initial offering period will be sold or resold at
the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this Prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales initially will be made to dealers and
other selling agents at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price for primary and
secondary market sales (or 65% of the then current maximum sales charge
after July 1, 1997). Effective on each July 1, commencing July 1, 1997,
such sales charge 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 dealers and
Page 16
other selling agents to the public will be made at the Public Offering
Price described in the Prospectus. The Sponsor reserves the right to
change the amount of the concession or agency commission from time to
time. Certain 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 above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are not
permitted under such Act. In Texas and in certain other states, any
banks making Units available must be registered as broker/dealers under
state law.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission equal
to 4.90% 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 "Underwriting" for information regarding the
receipt of the excess gross sales commissions by the Sponsor from the
Underwriter and additional concessions available to the Underwriter,
dealers and others. 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 such Trust on the Initial
Date of Deposit as well as subsequent deposits) and the cost of such
Securities to the Sponsor. See "Underwriting" and Note (2) of "Schedule
of Investments." During the initial offering period, the Underwriter
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 the Underwriter upon the sale of Units.
In maintaining a market for the Units, the Sponsor and Underwriter 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 4.90% subject
to reduction beginning July 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 or the Underwriter.
Will There be a Secondary Market?
After the initial offering period, although not obligated to do so, both
the Sponsor and the Underwriter intend 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 underlying value of the
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 or Underwriter may discontinue
purchases of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE
OF HIS UNITS, HE SHOULD INQUIRE OF THE UNDERWRITER OR 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,
Page 17
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority.
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
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 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." Persons who purchase Units will
commence receiving distributions only after such person becomes a record
owner. 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 such 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. 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
will, upon surrender of his Units for redemption, receive: (i) the pro
rata share of the amounts realized upon the disposition of Securities,
unless he elects an In-Kind Distribution as described below and (ii) a
pro rata share of any other assets of the Trust, less expenses of the
Trust. Not less than 60 days prior to the Mandatory Termination Date of
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
Page 18
to elect a distribution of shares of Securities (i.e., 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 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 Mandatory Termination Date of the Trust. Unit holders
electing a distribution of shares of Securities should be aware that the
transaction is subject to taxation and Unit holders will recognize gain
based on the appreciation in value of the Securities received. See "What
is the Federal Tax Status of Unit holders?" A Unit holder may, of
course, at any time after the 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 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 tendering to
the Trustee, at its corporate trust office in the City of New York, the
certificates representing the Units to be redeemed, or in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
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.
Any Unit holder tendering 2,500 Units or more for redemption may request
by written notice submitted at the time of tender from the Trustee, in
lieu of a cash redemption, a distribution of shares of Securities in an
amount and value of Securities per Unit equal to the Redemption Price
Per Unit as determined as of the evaluation next following tender. To
the extent possible, In-Kind Distributions shall be made by the Trustee
through the distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker/dealer at the Depository
Trust Company. An In-Kind Distribution will be reduced by customary
transfer and registration charges. The tendering Unit holder will
receive his pro rata number of whole shares of each of the Securities
comprising the portfolio and cash from the Capital Account equal to the
fractional shares to which the tendering Unit holder is entitled. Unit
holders electing a distribution of shares of Securities should be aware
that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. See "What is the Federal Tax Status of Unit Holders?" The
Page 19
Trustee may adjust the number of shares of any issue of Securities
included in a Unit holder's In-Kind Distribution to facilitate the
distribution of whole shares, such adjustment to be made on the basis of
the value of Securities on the date of tender. If funds in the Capital
Account are insufficient to cover the required cash distribution to the
tendering Unit holder, the Trustee may sell Securities in the manner
described above.
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 Securities are
sold, the size and diversity of the Trust will be reduced. Such sales
may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate
underlying value of the Securities in the Trust plus or minus cash, if
any, in the Income and Capital Accounts of the Trust. The Redemption
Price per Unit 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
held in the Trust, as determined by the Evaluator on the basis of the
aggregate underlying value of the Securities in the Trust next computed;
and (3) dividends receivable on the 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) any amounts owing to the Trustee for its advances; (3) 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; (4) cash
held for distribution to Unit holders of record of the Trust as of the
business day prior to the evaluation being made; and (5) 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 Securities will be determined in the
following manner: if the 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 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 prices 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 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
Page 20
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 or Underwriter?
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
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 a 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 Security, that the issuer of the 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 Security, that the issuer has defaulted on the payment
on any other of its outstanding obligations, or that the price of the
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
Securities would be detrimental to the Trust. Except as stated under
"Portfolio-What are Some Additional Considerations for Investors?" for
Failed Obligations, the acquisition by the Trust of any securities or
other property 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 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 (or any
securities or other property received by the Trust in exchange for
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.
The Sponsor, in designating 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 Securities. To the extent this is not
practicable, the composition and diversity of the 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 Securities are to be sold.
Page 21
INFORMATION AS TO Underwriter, SPONSOR,
TRUSTEE AND EVALUATOR
Who is the Underwriter?
J.C. Bradford & Co., the Underwriter, is one of America's top ten
investment firms located outside New York City. Founded in 1927, J.C.
Bradford & Co. is headquartered in Nashville, Tennessee and currently
has over 80 offices, primarily across the Southeast. A major strength of
the firm is its primary research and national correspondence network
which provides coverage of REITs.
J.C. Bradford & Co. is a member of the New York Stock Exchange and the
National Association of Securities Dealers Automated Quotation System,
Inc. (NASDAQ).
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 and
The First Trust GNMA. 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
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 Trusts may call the Customer
Service Help Line at 1-800-682-7520. The Trustee is subject to
supervision by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve
System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
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.
Page 22
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 Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
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 or 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 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 when the value of the
Securities owned by the Trust as shown by any evaluation, is less than
40% of the total value of Securities deposited in such Trust during the
primary offering period, or 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 and the transaction fees paid by such
purchaser. In the event of termination, written notice thereof will be
Page 23
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 Mandatory Termination Date, 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
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 Maturity Date of 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 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 Securities. 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 Mandatory Termination Date of the Trust. Unit
holders electing a distribution of shares of Securities should be aware
that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. See "What is the Federal Tax Status of Unit holders?" Unit
holders not electing a distribution of shares of 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
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.
UNDERWRITING
The Underwriter named below has purchased Units in the following amount:
<TABLE>
<CAPTION>
Number
Name Address of Units
______ __________ ________
<S> <C> <C>
Underwriter
J. C. Bradford & Co. 330 Commerce Street, Nashville, Tennessee 37201
======
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became the
owner of the Units of the Trust and entitled to the benefits thereof, as
well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the Units
of the Trust will be made at the Public Offering Price described in the
Prospectus. Units may also be sold to or through dealers and other
selling agents during the initial offering period and in the secondary
market at prices representing a concession or agency commission as
described in "Public Offering-How are Units Distributed?"
Page 24
The Underwriter has agreed to underwrite additional Units of the Trust
as they become available. The Sponsor will receive from the Underwriter
the difference between the gross sales commission and the Underwriter
concession of 3.75% of the Public Offering Price. Volume concessions or
agency commissions of an additional 0.05%, 0.15% and 0.25% of the Public
Offering Price will be given to the Underwriter for purchases from the
Sponsor of at least $10,000,000, $15,000,000 and $20,000,000 of the
Trust, respectively.
From time to time the Sponsor may implement programs under which
underwriters and dealers 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 an underwriter or dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such underwriter or dealer that sponsors sales
contests or recognition programs conforming to criteria established by
the Sponsor, or participates in sales programs sponsored by the Sponsor,
an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time
pursuant to objective criteria established by the Sponsor pay fees to
qualifying underwriters or dealers for certain services or activities
which are primarily intended to result in sales of Units of 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 the Trust are
described more fully elsewhere in this Prospectus.
Trust performance may be compared to performance on a total return basis
with the Dow Jones Industrial Average, the S&P 500 Composite Stock Price
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.
Page 25
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 150, comprised of Real Estate Trust, Series 1, at the opening of
business on , 1996. This statement of net assets is the
responsibility of the Trust's Sponsor. Our responsibility is to express
an opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on ,
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 150, comprised of Real Estate
Trust, Series 1, at the opening of business on , 1996 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1996
Page 26
Statement of Net Assets
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase contracts (1) (2) $
Organizational and offering costs (3) 35,000
_________
Less accrued organizational and offering costs (3) (35,000)
_________
Net assets $
=========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (4) $
Less sales charge (4) ( )
__________
Net assets $
=========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $ issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Securities
pursuant to purchase contracts for 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 2,500,000 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 maximum total sales charge
computed at the rate of 4.90% 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
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150
At the Opening of Business on the Initial Date of Deposit
, 1996
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ ______________________________________ ___________ __________ __________
<S> <C> <C> <C> <C>
RETAIL
CBL CBL & Associates Properties, Inc. 3-3.5% $ $
GRT Glimcher Realty Trust 3-3.5%
HGI HGI Realty, Inc. 3-3.5%
JDN JDN Realty Corporation 3-3.5%
SPG Simon Property Group 3-3.5%
MULTIFAMILY
AEC Associated Estates Realty Corporation 3-3.5%
CPT Camden Property Trust 3-3.5%
ESS Essex Property Trust, Inc. 3-3.5%
GBP Gables Residential Trust 3-3.5%
WDN Walden Residential Properties, Inc. 3-3.5%
WRP Wellsford Residential Property Trust 3-3.5%
OFFICE/INDUSTRIAL
FR First Industrial Realty Trust 3-3.5%
LRY Liberty Property Trust 3-3.5%
HEALTHCARE
CCT Capstone Capital Corp. 3-3.5%
HRP Health and Retirement Properties Trust 3-3.5%
HR Healthcare Realty Trust 3-3.5%
NHI National Health Investors, Inc. 3-3.5%
OHI Omega Healthcare Investors, Inc. 3-3.5%
HOTEL
ENNS Equity Inns, Inc. 3-3.5%
HPT Hospitality Properties Trust 3-3.5%
DIVERSIFIED
EGP Eastgroup Properties 3-3.5%
TRIPLE NET LEASE
NNN Commercial Net Lease Realty 3-3.5%
TRI TriNet Corporate Realty Trust, Inc. 3-3.5%
__________ _______
Total Investments 100% $
======== ========
</TABLE>
[FN]
______________
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. The contracts to purchase
Securities were entered into by the Sponsor on , 1996.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Securities on the Initial Date of
Deposit was $ . Cost and loss to Sponsor relating to the Securities sold
to the Trust were $ and $ , respectively.
(3) The portfolio may contain additional Securities each of which will
not exceed approximately 3.5% of the Aggregate Offering Price. Although
it is not the Sponsor's intention, certain of the Securities listed
above may not be included in the final portfolio. Also, the percentages
of the Aggregate Offering Price for the Securities are approximate
amounts and may vary in the final portfolio.
Page 28
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Page 29
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Page 30
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Page 31
CONTENTS:
Summary of Essential Information 3
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 7
Why are Investments in the Trust Suitable for
Retirement Plans? 8
Portfolio:
What are the Securities? 9
Risk Factors 9
Real Estate Investment Trusts 10
What are the Securities Selected for
Real Estate 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 and Underwriter's Profits? 17
Will There be a Secondary Market? 17
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 17
How are Income and Capital Distributed? 18
What Reports will Unit Holders Receive? 19
How May Units be Redeemed? 19
How May Units be Purchased by the Sponsor
or Underwriter? 21
How May Securities be Removed from the Trust? 21
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 22
Who is the Sponsor? 22
Who is the Trustee? 22
Limitations on Liabilities of Sponsor and Trustee 23
Who is the Evaluator? 23
Other Information:
How May the Indenture be Amended or Terminated? 23
Legal Opinions 24
Experts 24
Underwriting 24
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.
J. C. Bradford & Co.
Real Estate Trust
Series 1
Underwriter:
J. C. Bradford & Co.
330 Commerce Street
Nashville, Tennessee 37201
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 32
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 150
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 148, which is the
current fund, and The First Trust Special Situations Trust,
Series 150, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds comprising
the Fund, the evaluation, record and distribution dates and other
changes pertaining specifically to the new series, such as size
and number of Units in the Fund and the statement of condition of
the new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 148 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
150 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Village of Lisle and State of Illinois on May 31, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 150
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director of
Nike Securities May 31, 1996
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 150 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank
(National Association), as Trustee, First Trust Advisors
L.P., as Evaluator, and First Trust Advisors L.P., as
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership Agreement
of Nike Securities L.P. (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5
