Registration No. 333-07825
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 153
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on August 1, 1996 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 153
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
periodic payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors
Statement of Net
Assets
* Inapplicable, answer negative or not required.
Part I of II
First Trust (registered trademark)
Target 5 Trust, August 1996 Series
Target 10 Trust, August 1996 Series
(The First Trust Special Situations Trust, Series 153)
THIS PART I OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED
BY THE PART II OF THE PROSPECTUS DATED JUNE 3, 1996. BOTH PARTS I AND II
OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
The Trusts. The First Trust Special Situations Trust, Series 153
consists of the underlying separate unit investment trusts set forth
above. The various trusts are sometimes collectively referred to herein
as the "Trusts" and each as a "Trust." Each Trust consists of a
portfolio containing common stocks issued by companies which provide
income and are considered to have the potential for capital appreciation
(the "Equity Securities").
Target 5 Trust, August 1996 Series consists of common stock of the five
companies with the lowest per share stock price of the ten companies in
the Dow Jones Industrial Average (the "DJIA") that have the highest
dividend yield as of the close of business on the date prior to this
Prospectus. Target 10 Trust, August 1996 Series consists of common stock
of the ten companies in the DJIA that have the highest dividend yield as
of the close of business on the date prior to this Prospectus. See
"Schedule of Investments" for each Trust. The objective of each Trust is
to provide an above-average total return through a combination of
dividend income and capital appreciation. Units are not designed for
their prices to parallel or correlate with movements in the DJIA, and it
is expected that their prices will not do so. Each Trust has a mandatory
termination date (the "Mandatory Termination Date") of approximately one
year from the date of this Prospectus as set forth under "Summary of
Essential Information." There is, of course, no guarantee that the
objective of either Trust will be achieved.
The DJIA is not affiliated with the Sponsor and is the property of Dow
Jones & Company, Inc. Dow Jones & Company, Inc. has not granted the
Trusts or the Sponsor a license to use the DJIA, participated in the
creation of the Trusts or in the selection of stocks therein, and has
not approved any information herein related thereto.
Each Unit of a Trust represents an undivided interest in all Equity
Securities deposited therein. The Sponsor may deposit additional Equity
Securities or cash to create new Units after the Initial Date of Deposit
in the manner described in "What is the First Trust Special Situations
Trust?" in Part II of this Prospectus.
Public Offering Price. The Public Offering Price per Unit of the Target
5 Trust, August 1996 Series and the Target 10 Trust, August 1996 Series,
respectively, is equal to the aggregate underlying value of the Equity
Securities in such Trust (generally determined by their closing sale
prices) plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of such Trust, plus an initial sales charge for each
Trust equal to the difference between the maximum sales charge for each
Trust (2.70% and 2.90% of the
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Nike Securities, L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is August 1, 1996
Page 1
Public Offering Price, respectively) and the maximum remaining deferred sales
charge (initially $.190 per Unit for each Trust). Subsequent to the
Initial Date of Deposit, the amount of the initial sales charge will
vary with changes in the aggregate value of the Equity Securities.
Commencing September 30, 1996, and on the last business day of each
month thereafter, through June 30, 1997, a deferred sales charge of
$.0190 also will be assessed per Unit. Units purchased subsequent to the
initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments. The
deferred sales charge will be paid from funds in the Capital Account, if
sufficient, or from the periodic sale of Equity Securities. The total
maximum sales charge assessed to Unit holders on a per Unit basis will
be 2.70% and 2.90% of the Public Offering Price (equivalent to 2.721%
and 2.929% of the net amount invested, exclusive of the deferred sales
charge) for the Target 5 Trust, August 1996 Series and the Target 10
Trust, August 1996 Series, respectively. A pro rata share of accumulated
dividends, if any, in the Income Account is included in the Public
Offering Price. The minimum purchase for each Trust is $1,000 ($250 for
an Individual Retirement Account or other retirement plans). The sales
charge for each Trust is reduced on a graduated scale for sales
involving at least $50,000. See "How is the Public Offering Price
Determined?" in Part II of this Prospectus.
Estimated Net Annual Distributions. The estimated net annual dividend
distributions to Unit holders (based on the most recent quarterly or
semi-annual ordinary dividend declared with respect to the Equity
Securities) at the opening of business on the Initial Date of Deposit
for the Target 5 Trust, August 1996 Series was $.2791 per Unit, and for
the Target 10 Trust, August 1996 Series was $.3119 per Unit. This
estimate will vary with changes in a Trust's fees and expenses, in
dividends received, and with the sale of Equity Securities. There is no
assurance that the estimated net annual dividend distributions will be
realized in the future.
Dividend and Capital Distributions. Cash dividends received by a Trust
will be paid on December 31, 1996 and June 30, 1997 to Unit holders of
record on December 15, 1996 and June 15, 1997, respectively, and again
as part of the final liquidation distribution. Distributions of funds in
the Capital Account, if any, will be made as part of the final
liquidation distribution, and in certain circumstances, earlier. Any
distribution of income and/or capital will be net of expenses of a
Trust. See "What is the Federal Tax Status of Unit Holders?" in Part II
of this Prospectus. Additionally, upon termination of a Trust, the
Trustee will distribute, upon surrender of Units, to each remaining Unit
holder (other than a Rollover Unit holder as defined below) his pro rata
share of such Trust's assets, less expenses, in the manner set forth
under "Rights of Unit Holders-How are Income and Capital Distributed?"
in Part II of this Prospectus. For distributions to Rollover Unit
holders, see "Special Redemption, Liquidation and Investment in New
Trusts." Any Unit holder may elect to have each distribution of income
or capital on his Units, other than the final liquidating distribution,
automatically reinvested in additional Units of such Trust subject only
to remaining deferred sales charge payments. See "Rights of Unit Holders-
How are Income and Capital Distributed?" in Part II of this Prospectus.
Secondary Market for Units. Although not obligated to do so, the Sponsor
may maintain a market for Units and offer to repurchase the Units at
prices based on the aggregate value of the Equity Securities, plus or
minus cash, if any, in the Capital and Income Accounts of such Trust. If
a secondary market is not maintained, a Unit holder may still redeem his
Units through the Trustee. A Unit holder tendering 2,500 Units or more
may request a distribution of shares of Equity Securities (reduced by
customary transfer and registration charges) in lieu of payment in cash
(an "In-Kind Distribution"). See "Will There be a Secondary Market?" and
"How May Units be Redeemed?" in Part II of this Prospectus. Any deferred
sales charge remaining on Units at the time of their sale or redemption
will be collected at that time.
Special Redemption, Liquidation and Investment in New Trusts. The
Sponsor intends to create a separate 1997 trust (the "New Trust") in
conjunction with the termination of each Trust. The portfolio of the New
Trust of the Target 5 Trust, August Series will contain the common stock
of the five companies with the lowest per share stock price of the ten
companies in the DJIA that have the highest dividend yield as of the
business day prior to the Initial Date of Deposit of the New Trust. The
portfolio of the New Trust of the Target 10 Trust, August Series will
contain the ten common stocks in the DJIA that have the highest dividend
yield as of the business day prior to the Initial Date of Deposit. Unit
holders who hold their Units in book entry form may specify by August 1,
1997 to have their Units redeemed In-Kind, the distributed securities
sold, and the proceeds invested in a New Trust at a reduced sales
charge, provided such New Trust is offered and Units are available. Cash
not invested in a New Trust will be distributed. (Such Unit holders are
"Rollover Unit holders"). Rollover Unit holders therefore will not
receive a final liquidation distribution, but will receive Units in
either New Trust. This exchange option may be modified, terminated or
suspended. See "Special Redemption, Liquidation and Investment in a New
Trust" in Part II of this Prospectus.
Page 2
Termination. Commencing on the Mandatory Termination Date, the Equity
Securities will begin to be sold as prescribed by the Sponsor. The
Trustee will provide written notice of the termination to Unit holders
which will specify when certificates may be surrendered and include a
form to enable a Unit holder to elect an In-Kind Distribution, if such
Unit holder owns at least 2,500 Units of a Trust. Unit holders not
electing the "Rollover Option" or an In-Kind Distribution will receive a
cash distribution within a reasonable time after the Trust's
termination. See "How are Income and Capital Distributed?" and "Other
Information" in Part II of this Prospectus.
Risk Factors. An investment in a 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 or the general condition of the stock market, volatile
interest rates or an economic recession. An investment in the Target 5
Trust, August 1996 Series may subject a Unit holder to additional risk
due to the relative lack of diversity in its portfolio since the
portfolio contains only five stocks. Therefore, Units of the Target 5
Trust, August 1996 Series may be subject to greater market risk than
other trusts which contain a more diversified portfolio of securities.
Each Trust is not actively managed and Equity Securities will not be
sold to take advantage of market fluctuations or changes in anticipated
rates of appreciation. See "What are Equity Securities?-Risk Factors" in
Part II of this Prospectus.
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-August 1, 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Target 5 Trust
August 1996
Series
______________
General Information
<S> <C>
Initial Number of Units (1) 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 148,598
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.9065
Maximum Sales Charge 2.70% of the Public Offering Price per Unit
(2.721% of the net amount invested, exclusive of the deferred sales charge) (3) $ .2696
Less Deferred Sales Charge per Unit $ (.1900)
Public Offering Price per Unit (3) $ 9.9861
Sponsor's Initial Repurchase Price per Unit $ 9.7165
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.7165
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number 33718R 542
First Settlement Date August 6, 1996
Rollover Notification Date August 1, 1997
Special Redemption and Liquidation
Period August 20, 1997 to September 2, 1997
Mandatory Termination Date September 2, 1997
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is less than the
lower of $2,000,000 or 20% of the total value of Equity Securities deposited in
a Trust during the primary offering period.
Trustee's Annual Fee $.0085 per Unit outstanding.
Evaluator's Annual Fee $.0025 per Unit outstanding. Evaluations for purposes of sale, purchase or
redemption of Units are made as of the close of trading (4:00 p.m. Eastern time)
on the New York Stock Exchange on each day on which it is open.
Supervisory Fee (5) Maximum of $.0025 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 1996.
Income Distribution Date (6) Last day of June and December, commencing December 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 Equity Security listed on a national securities exchange is
valued at the last closing sale price on the New York Stock Exchange, or
if no such price exists at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" contained herein and "Public
Offering" in Part II for additional information regarding these charges.
On the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay a pro
rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Equity
Securities at the opening of business on the Initial Date of Deposit and
establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(4) See "How May Units be Redeemed?" in Part II of this Prospectus.
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per
Unit. The Trustee may retain and pay compensation to the Sponsor to act as
agent for the Trust with respect to acquiring or selling Equity Securities
for the Trust.
(6) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
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 as part of the final liquidation
distribution.
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-August 1, 1996
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Target 10 Trust
August 1996
Series
______________
General Information
<S> <C>
Initial Number of Units (1) 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 148,492
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.8995
Maximum Sales Charge 2.90% of the Public Offering Price per Unit
(2.929% of the net amount invested, exclusive of the deferred sales charge) (3) $ .2900
Less Deferred Sales Charge per Unit $ (.1900)
Public Offering Price per Unit (3) $ 9.9995
Sponsor's Initial Repurchase Price per Unit $ 9.7095
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.7095
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number 33718R 559
First Settlement Date August 6, 1996
Rollover Notification Date August 1, 1997
Special Redemption and Liquidation
Period August 20, 1997 to September 2, 1997
Mandatory Termination Date September 2, 1997
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is less than the
lower of $2,000,000 or 20% of the total value of Equity Securities deposited in
a Trust during the primary offering period.
Trustee's Annual Fee $.0085 per Unit outstanding.
Evaluator's Annual Fee $.0025 per Unit outstanding. Evaluations for purposes of sale, purchase or
redemption of Units are made as of the close of trading (4:00 p.m. Eastern time)
on the New York Stock Exchange on each day on which it is open.
Supervisory Fee (5) Maximum of $.0025 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 1996.
Income Distribution Date (6) Last day of June and December, commencing December 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 Equity Security listed on a national securities exchange is
valued at the last closing sale price on the New York Stock Exchange, or
if no such price exists at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" contained herein and "Public
Offering" in Part II for additional information regarding these charges.
On the Initial Date of Deposit there will be no accumulated dividends in
the Income Account. Anyone ordering Units after such date will pay a pro
rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Equity
Securities at the opening of business on the Initial Date of Deposit and
establishes the original proportionate relationship amongst the
individual securities. No sales to investors will be executed at this
price. Additional Equity Securities will be deposited during the day of
the Initial Date of Deposit which will be valued as of 4:00 p.m. Eastern
time and sold to investors at a Public Offering Price per Unit based on
this valuation.
(4) See "How May Units be Redeemed?" in Part II of this Prospectus.
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per
Unit. The Trustee may retain and pay compensation to the Sponsor to act as
agent for the Trust with respect to acquiring or selling Equity Securities
for the Trust.
(6) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
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 as part of the final liquidation
distribution.
Page 5
FEE TABLE-Target 5 Trust, August 1996 Series
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" in Part II of this
Prospectus. Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 0.80%(a) $ .080
Deferred sales charge per year
(as a percentage of original purchase price) 1.90%(b) .190
________ ________
2.70% $ .270
======== ========
Maximum sales charge per year imposed on
Reinvested Dividends 1.90%(c) 0.190
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .085% $ .0085
Portfolio supervision, bookkeeping, administrative and
evaluation fees .060% .0060
Other operating expenses .022% .0022
________ ________
Total .167% $ .0167
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Target 5 Trust, August 1996 Series
estimated operating expense ratio of .167% and a 5% annual
return on the investment throughout the periods $ 29 $ 72 $ 117 $ 243
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
_____________
(a) The Initial Sales Charge would exceed 0.8% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $.0190 per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period for each one-year
Trust. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.90% for the Trust. If the Unit price is less
than $10.00 per Unit, the deferred sales charge will exceed 1.90% for
the Trust. Units purchased subsequent to the initial deferred sales
charge payment will also be subject to the remaining deferred sales
charge payments.
(c)Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "How are Income and
Capital Distributed?" in Part II of this Prospectus.
Page 6
FEE TABLE-Target 10 Trust, August 1996 Series
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" in Part II of this
Prospectus. Although the Trust has a term of only one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of offering price) 1.00%(a) $ .100
Deferred sales charge per year
(as a percentage of original purchase price) 1.90%(b) .190
________ ________
2.90% $ .290
======== ========
Maximum sales charge per year imposed on
Reinvested Dividends 1.90%(c) 0.190
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .085% $ .0085
Portfolio supervision, bookkeeping, administrative and
evaluation fees .060% .0060
Other operating expenses .022% .0022
________ ________
Total .167% $ .0167
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
________ ________ ________ _________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Target 10 Trust, August 1996 Series
estimated operating expense ratio of .167% and a 5% annual
return on the investment throughout the periods $ 31 $ 73 $ 119 $ 244
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
___________
(a) The Initial Sales Charge would exceed 1.0% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $.0190 per month per Unit, irrespective of purchase
or redemption price deducted over a ten-month period for each one-year
Trust. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.90% for the Trust. If the Unit price is less
than $10.00 per Unit, the deferred sales charge will exceed 1.90% for
the Trust. Units purchased subsequent to the initial deferred sales
charge payment will also be subject to the remaining deferred sales
charge payments.
(c) Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "How are Income and
Capital Distributed?" in Part II of this Prospectus.
Page 7
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 153
We have audited the accompanying statements of net assets, including the
schedules of investments, of The First Trust Special Situations Trust,
Series 153, comprised of the Target 5 Trust, August 1996 Series and
Target 10 Trust, August 1996 Series, as of the opening of business on
August 1, 1996. These statements of net assets are the responsibility of
the Trusts' Sponsor. Our responsibility is to express an opinion on
these statements of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letters of credit held by the Trustee and deposited in the Trusts on
August 1, 1996. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well
as evaluating the overall presentation of the statements of net assets.
We believe that our audit of the statements of net assets provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 153, comprised of the Target 5
Trust, August 1996 Series and Target 10 Trust, August 1996 Series, at
the opening of business on August 1, 1996 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
August 1, 1996
Page 8
Statement of Net Assets
TARGET 5 TRUST, AUGUST 1996 SERIES
The First Trust Special Situations Trust, Series 153
At the Opening of Business on the Initial Date of Deposit
August 1, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $148,598
Less liability for deferred sales charge (3) (2,850)
__________
Net assets $145,748
==========
Units outstanding 15,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $149,792
Less sales charge (4) (4,044)
__________
Net assets $145,748
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) Represents the amount of mandatory distributions from the Trust
($.190 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on September 30, 1996 and on the last business
day of each month thereafter through June 30, 1997. If Units are
redeemed prior to June 30, 1997 the remaining amount of the deferred
sales charge applicable to such Units will be payable at the time of
redemption.
(4) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.70% of the Public Offering Price (equivalent
to 2.721% of the net amount invested, exclusive of the deferred sales
charge), assuming no reduction of sales charge for quantity purchases.
Page 9
Statement of Net Assets
TARGET 10 TRUST, AUGUST 1996 SERIES
The First Trust Special Situations Trust, Series 153
At the Opening of Business on the Initial Date of Deposit
August 1, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $148,492
Less liability for deferred sales charge (3) (2,850)
__________
Net assets $145,642
==========
Units outstanding 15,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $149,992
Less sales charge (4) (4,350)
__________
Net assets $145,642
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) Represents the amount of mandatory distributions from the Trust
($.190 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on September 30, 1996 and on the last business
day of each month thereafter through June 30, 1997. If Units are
redeemed prior to June 30, 1997 the remaining amount of the deferred
sales charge applicable to such Units will be payable at the time of
redemption.
(4) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.90% of the Public Offering Price (equivalent
to 2.929% of the net amount invested, exclusive of the deferred sales
charge), assuming no reduction of sales charge for quantity purchases.
Page 10
Schedule of Investments
TARGET 5 TRUST, AUGUST 1996 SERIES
The First Trust Special Situations Trust, Series 153
At the Opening of Business on the Initial Date of Deposit
August 1, 1996
<TABLE>
<CAPTION>
Percentage Market Cost of
Number of Aggregate Value Equity Current
of Ticker Symbol and Name of Offering per Securities Dividend
Shares Issuer of Equity Securities (1) Price Share Trust (2) Yield (3)
______ ______________________________ ____________ ______ __________ _________
<C> <S> <C> <C> <C> <C>
568 T AT&T Corporation 20% $52.125 $ 29,607 2.53%
515 CHV Chevron Corporation 20% 57.875 29,806 3.46%
612 GM General Motors Corporation 20% 48.750 29,835 3.28%
781 IP International Paper Company 20% 37.875 29,580 2.64%
458 MMM Minnesota Mining & Manufacturing
Company 20% 65.000 29,770 3.02%
_______ _________
Total Investments 100% $148,598
======= =========
</TABLE>
[FN]
______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
purchase contracts for the Equity Securities were entered into by the
Sponsor on July 31, 1996. The Trust has a mandatory termination date of
September 2, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the Equity
Securities on the business day preceding the Initial Date of Deposit).
The valuation of the Equity Securities has been determined by the
Evaluator, an affiliate of the Sponsor. The aggregate underlying value
of the Equity Securities on the Initial Date of Deposit was $148,598.
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $148,660 and $62, respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend declared
on that Equity Security and dividing the result by that Equity
Security's closing sale price on the business day preceding the Initial
Date of Deposit.
Page 11
Schedule of Investments
TARGET 10 TRUST, AUGUST 1996 SERIES
The First Trust Special Situations Trust, Series 153
At the Opening of Business on the Initial Date of Deposit
August 1, 1996
<TABLE>
<CAPTION>
Percentage Market Cost of
Number of Aggregate Value Equity Current
of Ticker Symbol and Name of Offering per Securities Dividend
Shares Issuer of Equity Securities (1) Price Share to Trust (2) Yield (3)
______ _______________________________ ____________ ________ ____________ _________
<C> <S> <C> <C> <C> <C>
284 T AT&T Corporation 10% $52.125 $ 14,803 2.53%
257 CHV Chevron Corporation 10% 57.875 14,874 3.46%
184 DD E.I. du Pont de Nemours
& Company 10% 80.750 14,858 2.82%
181 XON Exxon Corporation 10% 82.250 14,887 3.84%
305 GM General Motors Corporation 10% 48.750 14,869 3.28%
390 IP International Paper Company 10% 37.875 14,771 2.64%
228 MMM Minnesota Mining & Manufacturing
Company 10% 65.000 14,820 3.02%
173 JPM J.P. Morgan & Company, Inc. 10% 86.000 14,878 3.77%
142 MO Philip Morris Companies, Inc. 10% 104.625 14,857 3.82%
175 TX Texaco, Inc. 10% 85.000 14,875 4.00%
_______ _________
Total Investments 100% $148,492
======= ========
</TABLE>
[FN]
______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
purchase contracts for the Equity Securities were entered into by the
Sponsor on July 31, 1996. The Trust has a mandatory termination date of
September 2, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the Equity
Securities on the business day preceding the Initial Date of Deposit).
The valuation of the Equity Securities has been determined by the
Evaluator, an affiliate of the Sponsor. The aggregate underlying value
of the Equity Securities on the Initial Date of Deposit was $148,492.
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $148,543 and $51, respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend declared
on that Equity Security and dividing the result by that Equity
Security's closing sale price on the business day preceding the Initial
Date of Deposit.
Page 12
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Page 13
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Page 14
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Page 15
FIRST TRUST (registered trademark)
TARGET 5 TRUST, AUGUST 1996 SERIES
TARGET 10 TRUST, AUGUST 1996 SERIES
Prospectus
Part I
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART ONE MUST BE
ACCOMPANIED BY PART TWO.
August 1, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 16
Prospectus Part II
Dated June 3, 1996
THIS PART II OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED
BY PART I. BOTH PARTS OF THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE
REFERENCE.
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust Series is one of a series of
investment companies created by the Sponsor, all of which are generally
similar, but each of which is separate and is designated by a different
series number. This Series consists of underlying separate unit
investment trusts set forth in Part I of this Prospectus. These
underlying trusts are designated herein as the "Target 5 Trust" and
"Target 10 Trust" and may sometimes be referred to individually as a
"Trust" and collectively as the "Trusts." Each Trust was created under
the laws of the State of New York pursuant to a Trust Agreement (the
"Indenture"), dated the Initial Date of Deposit, with Nike Securities
L.P., as Sponsor, The Chase Manhattan Bank (National Association), as
Trustee 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
companies which provide income and are considered to have the potential
for capital appreciation (the "Equity Securities"), 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 Equity Securities.
In exchange for the deposit of securities or contracts to purchase
securities in a Trust, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of such Trust.
The objective of the Target 5 Trust is to provide an above-average total
return through a combination of dividend income and capital appreciation
by investing in Equity Securities of the five companies with the lowest
per share stock price of the ten companies in the Dow Jones Industrial
Average ("DJIA") that have the highest dividend yield as of the close of
business on the date prior to the date of Part I of this Prospectus.
The objective of the Target 10 Trust is to provide an above-average
total return through a combination of dividend income and capital
appreciation by investing in Equity Securities of the ten companies
which are in the DJIA that have the highest dividend yield as of the
close of business on the date prior to the date of Part I of this
Prospectus. The DJIA is not affiliated with the Sponsor and is the
property of Dow Jones & Company, Inc. There is, of course, no guarantee
that the objective of either Trust will be achieved.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
Page 1
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in a Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Equity Securities in a Trust or cash
(including a letter of credit) with instructions to purchase additional
Equity Securities in a Trust. 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 such Trust. Any deposit
by the Sponsor of additional Equity Securities or the purchase of
additional Equity 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 Equity Securities
deposited in a Trust on the Initial, or any subsequent, Date of Deposit.
See "How May Equity Securities be Removed from a Trust?" The original
percentage relationship of each Equity Security to a Trust is set forth
in Part I of this Prospectus under "Schedule of Investments" for such
Trust. Since the prices of the underlying Equity Securities will
fluctuate daily, the ratio, on a market value basis, will also change
daily. The portion of Equity Securities represented by each Unit will
not change as a result of the deposit of additional Equity Securities in
a 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
Equity Securities between the time of the cash deposit and the purchase
of the Equity Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Equity 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 a Trust represented the
undivided fractional interest in the Equity Securities deposited in such
Trust, as set forth under "Summary of Essential Information" appearing
in Part I of this Prospectus. To the extent that Units of a Trust are
redeemed, the aggregate value of the Equity Securities in such Trust
will be reduced, and the undivided fractional interest represented by
each outstanding Unit of such Trust will increase. However, if
additional Units are issued by a Trust in connection with the deposit of
additional Equity Securities or cash by the Sponsor, the aggregate value
of the Equity Securities in such Trust will be increased by amounts
allocable to additional Units, and the fractional undivided interest
represented by each Unit of such Trust will be decreased
proportionately. See "How May Units be Redeemed?" Each Trust has a
Mandatory Termination Date as set forth under "Summary of Essential
Information" in Part I of this Prospectus.
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trusts, for which the Sponsor will be reimbursed in
amounts as set forth under "Summary of Essential Information" in Part I,
the Sponsor will not receive any fees in connection with its activities
relating to the Trusts. Such bookkeeping and administrative charges may
be increased without approval of the Unit holders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor. The fees payable to the Sponsor for such
services may exceed the actual costs of providing such services for
these Trusts, but at no time will the total amount received for such
services rendered to all unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the actual cost to the
Sponsor of supplying such services in such year. First Trust Advisors
L.P. will receive an annual supervisory fee, which is not to exceed the
amount set forth under "Summary of Essential Information" in Part I of
this Prospectus, for providing portfolio supervisory services for the
Trusts. Such fee is based on the number of Units outstanding in a Trust
on January 1 of each year, except for the year or years in which an
initial offering period occurs in which case the fee for a month is
based on the number of Units outstanding at the end of such month. This
fee may exceed the actual costs of providing such supervisory services
for these Trusts, but at no time will the total amount received for
portfolio supervisory services rendered to all unit investment trusts of
which Nike Securities L.P. is the Sponsor in any calendar year exceed
the aggregate cost to First Trust Advisors L.P. of supplying such
services in such year. In providing such supervisory services, the
Portfolio Supervisor may purchase research services from a variety of
sources which may include underwriters or dealers of the Trusts.
Subsequent to the initial offering period, First Trust Advisors L.P.,
the Evaluator and an affiliate of the Sponsor, will receive a fee as
Page 2
indicated in the "Summary of Essential Information" in Part I of this
Prospectus. The fee may exceed the actual costs of providing such
evaluation services for these Trusts, 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 a Trust for
which it is reimbursed by such Trust. The Trustee will receive for its
ordinary recurring services to a Trust an annual fee as indicated in the
"Summary of Essential Information" in Part I. The fee is computed per
Unit in such Trust outstanding based upon the largest aggregate number
of Units of such Trust outstanding at any time during the calendar 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 a Trust to the extent funds are available, and then from the Capital
Account of such 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 a 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.
The following additional charges are or may be incurred by a Trust: all
legal expenses of the Trustee incurred by or in connection with its
responsibilities under the Indenture; the expenses and costs of any
action undertaken by the Trustee to protect such Trust and the rights
and interests of the Unit holders; fees of the Trustee for any
extraordinary services performed under the Indenture; indemnification of
the Trustee for any loss, liability or expense incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with its acceptance or administration of such Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of such Trust; all taxes and other government
charges imposed upon the Securities or any part of such Trust (no such
taxes or charges are being levied or made or, to the knowledge of the
Sponsor, contemplated). The above expenses and the Trustee's annual fee,
when paid or owing to the Trustee, are secured by a lien on a Trust. In
addition, the Trustee is empowered to sell Equity Securities in a 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 such
Trust. Since the Equity Securities are all common stocks and the income
stream produced by dividend payments is unpredictable, the Sponsor
cannot provide any assurance that dividends will be sufficient to meet
any or all expenses of a Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity 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?"
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the
"Code"). Unit holders should consult their tax advisers in determining
the Federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in a Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of the assets of a Trust under the Code; and
the income of such Trust will be treated as income of the Unit holders
thereof under the Code. Each Unit holder will be considered to have
received his pro rata share of the income derived from each Equity
Security when such income is received by a Trust.
2. Each Unit holder will have a taxable event when a Trust disposes
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder. The price a Unit holder pays for his or her Units,
Page 3
including sales charges, is allocated among his or her pro rata portion
of each Equity Security held by a Trust (in proportion to the fair
market values thereof on the date the Unit holder purchases his or her
Units) in order to determine his or her tax basis for his or her pro
rata portion of each Equity Security held by such Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by a Trust is taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceeds such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, any such capital gain will be short-term unless a Unit
holder has held his or her Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by a
Trust will generally be considered a capital gain (except in the case of
a dealer) and will be long-term if the Unit holder has held his or her
Units for more than one year (the date on which the Units are acquired
(i.e., the "trade date") is excluded for purposes of determining whether
the Units have been held for more than one year). A Unit holder's
portion of loss, if any, upon the sale or redemption of Units or the
disposition of Equity Securities held by a Trust will generally be
considered a capital loss (except in the case of a dealer) and, in
general, will be long-term if the Unit holder has held his or her Units
for more than one year. In particular, a Rollover Unit holder should be
aware that a Rollover Unit holder's loss, if any, incurred in connection
with the exchange of Units for Units in the next new series of the
Target 5 Trust or Target 10 Trust (the "New Trusts"), (the Sponsor
intends to create a separate New Trust in conjunction with the
termination of each of the Trusts) will generally be disallowed with
respect to the disposition of any Equity Securities pursuant to such
exchange to the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions of the
Code taking into account such Unit holder's deemed ownership of the
securities underlying the Units in a New Trust in the manner described
above, if such substantially identical securities are acquired within a
period beginning 30 days before and ending 30 days after such
disposition. However, any gains incurred in connection with such an
exchange by a Rollover Unit holder would be recognized. Unit holders
should consult their tax advisers regarding the recognition of gains and
losses for Federal income tax purposes.
4. Generally, the tax basis of a Unit holder includes sales
charges, and such charges are not deductible. A portion of the sales
charge is deferred. It is possible that for federal income tax purposes,
a portion of the deferred sales charge may be treated as interest which
would be deductible by a Unit holder subject to limitations on the
deduction of investment interest. In such case, the non-interest portion
of the deferred sales charge should be added to the Unit holder's tax
basis in his or her Units. The deferred sales charge could cause the
Unit holder's Units to be considered to be debt-financed under Section
264A of the Code which would result in a small reduction of the
dividends-received deduction. In any case, the income (or proceeds from
redemption) a Unit holder must take into account for federal income tax
purposes is not reduced by amounts deducted to pay the deferred sales
charge. Unit holders should consult their own tax advisers as to the
income tax consequences of the deferred sales charge.
Dividends Received Deduction. A Unit holder will be considered to have
received all of the dividends paid on his or her pro rata portion of
each Equity Security when such dividends are received by a Trust
regardless of whether such dividends are used to pay a portion of the
deferred sales charge. Unit holders will be taxed in this manner
regardless of whether distributions from a Trust are actually received
by the Unit holder or are automatically reinvested. See "How are Income
and Capital Distributed?-Distribution Reinvestment Option."
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unit holder's pro rata
portion of dividends received by a Trust (to the extent such dividends
are taxable as ordinary income, as discussed above) in the same manner
as if such corporation directly owned the Equity Securities paying such
Page 4
dividends (other than corporate Unit holders, such as "S" corporations
which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax).
However, a corporation owning Units should be aware that Sections 246
and 246A of the Code impose additional limitations on the eligibility of
dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally be
held at least 46 days (as determined under Section 246(c) of the Code).
Final regulations have recently been issued which address special rules
that must be considered in determining whether the 46-day holding period
requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unit holder owns certain stock
(or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unit holders. Each
Unit holder's pro rata share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by him or her, subject to the following
limitation. It should be noted that as a result of the Tax Reform Act of
1986, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses
will be deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be required to
treat some or all of the expenses of the Trust as miscellaneous itemized
deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by a Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). For taxpayers other than corporations, net capital
gains are subject to a maximum stated marginal tax rate of 28%. However,
it should be noted that legislative proposals are introduced from time
to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to a 28%
maximum stated rate for taxpayers other than corporations. Because some
or all capital gains are taxed at a comparatively lower rate under the
Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of
the Trust involved including his or her pro rata portion of all the
Equity Securities represented by the Unit.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units, Termination of a Trust and Investment in a New Trust. As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns at
least 2,500 Units of a Trust may request an In-Kind Distribution upon
the redemption of Units or the termination of such Trust. The Unit
holder requesting an In-Kind Distribution will be liable for expenses
related thereto (the "Distribution Expenses") and the amount of such In-
Kind Distribution will be reduced by the amount of the Distribution
Expenses. See "Rights of Unit Holders-How are Income and Capital
Distributed?" As previously discussed, prior to the redemption of Units
or the termination of a Trust, a Unit holder is considered as owning a
pro rata portion of each of such Trust's assets for Federal income tax
purposes. The receipt of an In-Kind Distribution upon the redemption of
Units or the termination of a Trust would be deemed an exchange of such
Unit holder's pro rata portion of each of the shares of stock and other
assets held by such Trust in exchange for an undivided interest in whole
shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this purpose
Page 5
is a particular class of stock issued by a particular corporation. A
Unit holder will not recognize gain or loss if a Unit holder only
receives Equity Securities in exchange for his or her pro rata portion
in the Equity Securities held by a Trust. However, if a Unit holder also
receives cash in exchange for a fractional share of an Equity Security
held by a Trust, such Unit holder will generally recognize gain or loss
based upon the difference between the amount of cash received by the
Unit holder and his or her tax basis in such fractional share of an
Equity Security held by a Trust.
Because a Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by such Trust.
The amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by a Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
As discussed in "Rights of Unit Holders-Special Redemption, Liquidation
and Investment in a New Trust," a Unit holder may elect to become a
Rollover Unit holder. To the extent a Rollover Unit holder exchanges his
or her Units for Units of either New Trust in a taxable transaction,
such Unit holder will recognize gains, if any, but generally will not be
entitled to a deduction for any losses recognized upon the disposition
of any Equity Securities pursuant to such exchange to the extent that
such Unit holder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into
account such Unit holder's deemed ownership of the securities underlying
the Units in such New Trust in the manner described above, if such
substantially identical securities were acquired within a period
beginning 30 days before and ending 30 days after such disposition under
the wash sale provisions contained in Section 1091 of the Code. In the
event a loss is disallowed under the wash sale provisions, special rules
contained in Section 1091(d) of the Code apply to determine the Unit
holder's tax basis in the securities acquired. Rollover Unit holders are
advised to consult their tax advisers.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in the Trust in accordance
with the proportion of the fair market values of such Equity Securities
on the date the Units are purchased in order to determine such Unit
holder's tax basis for his or her pro rata portion of each Equity Security.
A Unit holder's tax basis in his or her Units and his or her pro rata
portion of an Equity Security held by a Trust will be reduced to the
extent dividends paid with respect to such Equity Security are received
by a Trust which are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified 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 a Trust to such Unit holder (including amounts received
upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust will generally be subject to United States
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of income
dividends includable in the Unit holder's gross income and amounts of
Trust expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trusts Suitable for
Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trusts for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of each Trust will be treated as the income
of the Unit holders thereof.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
Page 6
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 Equity Securities?
Target 5 Trust consists of the five companies with the lowest per share
stock price of the ten companies in the DJIA that have the highest
dividend yield as of the close of business on the date prior to the date
of Part I of this Prospectus. Target 10 Trust consists of the ten common
stocks in the DJIA that have the highest dividend yield as of the close
of business on the date prior to the date of Part I of this Prospectus.
The yield for each Equity Security was calculated by annualizing the
last quarterly or semi-annual ordinary dividend declared and dividing
the result by the market value of the Equity Security as of the opening
of business on the date of Part I of this Prospectus. An investment in a
Trust involves the purchase of a quality portfolio of attractive
equities with high dividend yields in one convenient purchase. Investing
in the DJIA stocks with the highest dividend yields may be effective in
achieving the Trusts' investment objectives, because regular dividends
are common for established companies, and dividends have accounted for a
substantial portion of the total return on DJIA stocks as a group. Due
to the short duration of the Trusts, there is no guarantee that either
Trust's objective will be achieved or that a Trust will provide for
capital appreciation in excess of the Trust's expenses.
The DJIA is comprised of 30 common stocks chosen by the editors of The
Wall Street Journal as representative of the broad market and of
American industry. The companies are major factors in their industries
and their stocks are widely held by individuals and institutional
investors. Changes in the components of the DJIA are made entirely by
the editors of The Wall Street Journal without consultation with the
companies, the stock exchange or any official agency. For the sake of
continuity, changes are made rarely. Most substitutions have been the
result of mergers, but from time to time, changes may be made to achieve
a better representation. The components of the DJIA may be changed at
any time for any reason. Any changes in the components of the DJIA made
after the date of Part I of this Prospectus will not cause a change in
the identity of the common stocks included in the Trust Portfolios,
including any additional Equity Securities deposited in a Trust.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust Portfolios as of the
opening of business on the date of Part I of this Prospectus. Since the
Sponsor may deposit additional Equity Securities which were originally
selected through this process, the Sponsor may continue to sell Units of
the Trusts even though the yields on these Equity Securities may have
changed subsequent to the Initial Date of Deposit. These Equity
Securities may no longer be included in the DJIA, or may not currently
meet a Trust's selection criteria, and therefore, such Equity Securities
would no longer be chosen for deposit into the Trusts if the selection
process was to be performed again at a later time.
The Dow Jones Industrial Average, Historical Perspective
The DJIA was first published in The Wall Street Journal in 1896.
Initially consisting of just 12 stocks, the DJIA expanded to 20 stocks
in 1916 and to its present size of 30 stocks on October 1, 1928. The
companies which make up the DJIA have remained relatively constant over
the life of the DJIA. Taking into account name changes, 9 of the
original DJIA companies are still in the DJIA today. For two periods of
17 consecutive years, March 14, 1939-July 1956 and June 1, 1959-August
6, 1976, there were no changes made to the list. The following is a
comparison of the list as it appeared on October 1, 1928 and the current DJIA.
Page 7
The Dow Jones Industrial Average
List as of October 1, 1928 Current List
__________________________ ____________
Allied Chemical AT&T Corporation
American Can Allied Signal
American Smelting Aluminum Company of America
American Sugar American Express Company
American Tobacco Bethlehem Steel Corporation
Atlantic Refining Boeing Company
Bethlehem Steel Corporation Caterpillar Inc.
Chrysler Corporation Chevron Corporation
General Electric Company Coca-Cola Company
General Motors Corporation Walt Disney Company
General Railway Signal E.I. du Pont de Nemours & Company
Goodrich Eastman Kodak Company
International Harvester Exxon Corporation
International Nickel General Electric Company
Mack Trucks General Motors Corporation
Nash Motors Goodyear Tire & Rubber Company
North American International Business Machines Corporation
Paramount Publix International Paper Company
Postum, Inc. McDonald's Corporation
Radio Corporation of America (RCA) Merck & Company, Inc.
Sears, Roebuck & Company Minnesota Mining & Manufacturing Company
Standard Oil of New Jersey J.P. Morgan & Company, Inc.
Texas Corporation Philip Morris Companies, Inc.
Texas Gulf Sulphur Proctor & Gamble Company
Union Carbide Corporation Sears, Roebuck & Company
United States Steel Company Texaco, Inc.
Victor Talking Machine Union Carbide Corporation
Westinghouse Electric Corporation United Technologies Corporation
Woolworth Corporation Westinghouse Electric Corporation
Wright Aeronautical Woolworth Corporation
Dow Jones & Company, Inc., owner of the DJIA, has not granted to the
Trusts or the Sponsor a license to use the DJIA. Units are not designed
so that their prices will parallel or correlate with movements in the
DJIA, and it is expected that their prices will not parallel or
correlate with such movements. Dow Jones & Company, Inc. has not
participated in any way in the creation of the Trusts or in the
selection of stocks included in the Trusts and has not approved any
information herein relating thereto.
The following table compares the actual performance of the DJIA, the
Standard & Poor's 500 Composite Stock Price Index (the "S&P") and
approximately equal values of the five companies with the lowest per
share stock price of the ten companies in the DJIA having the highest
dividend yield (the "Five Lowest Priced Stocks of the Ten Highest
Yielding DJIA Stocks") in each of the 25 years listed below, as of
December 31 in each of these years.
Page 8
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
Five Lowest Priced Stocks of the
Ten Highest Yielding DJIA Stocks (1) Dow Jones Industrial Average (DJIA)
_____________________________________ ___________________________________
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
____ ________________ _________ __________ ________________ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1971 4.53% 4.84% 9.37% 6.11% 3.67% 9.78%
1972 16.92 5.57 22.49 14.58 3.60 18.18
1973 14.20 5.44 19.64 -16.58 3.42 -13.16
1974 -12.52 7.54 -4.98 -27.57 4.36 -23.21
1975 55.50 9.04 64.54 38.32 6.16 44.48
1976 33.35 7.45 40.80 17.86 4.89 22.75
1977 -0.40 6.04 5.64 -17.27 4.51 -12.76
1978 -5.94 7.20 1.26 -3.15 5.77 2.62
1979 1.81 8.10 9.91 4.19 6.33 10.52
1980 31.88 8.65 40.53 14.93 6.52 21.45
1981 -4.40 8.04 3.64 -9.23 5.83 -3.40
1982 34.58 7.30 41.88 19.61 6.23 25.84
1983 27.33 8.78 36.11 20.27 5.41 25.68
1984 3.77 7.11 10.88 -3.74 4.81 1.07
1985 30.23 7.61 37.84 27.66 5.17 32.83
1986 24.13 6.18 30.31 22.58 4.38 26.96
1987 6.23 4.83 11.06 2.26 3.74 6.00
1988 15.48 5.74 21.22 11.85 4.12 15.97
1989 5.51 4.98 10.49 26.96 4.78 31.74
1990 -20.60 5.33 -15.27 -4.34 3.73 -0.61
1991 56.41 5.38 61.79 20.32 3.67 23.99
1992 18.46 4.42 22.88 4.17 3.20 7.37
1993 29.82 4.00 33.82 13.72 3.02 16.74
1994 4.20 3.88 8.08 2.14 2.80 4.94
1995 27.27 2.99 30.26 33.45 3.02 36.47
</TABLE>
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
S&P 500 Index
_____________
Actual
Dividend Total
Year Appreciation (2) Yield (3) Return (4)
____ _______________ _________ _________
<S> <C> <C> <C>
1971 10.79% 3.33% 14.12%
1972 15.63 3.09 18.72
1973 -17.37 2.86 -14.51
1974 -29.72 3.71 -26.01
1975 31.55 5.38 36.93
1976 19.15 4.39 23.54
1977 -11.50 4.31 -7.19
1978 1.06 5.34 6.40
1979 12.31 5.70 18.01
1980 25.77 5.73 31.50
1981 -9.73 4.90 -4.83
1982 14.76 5.50 20.26
1983 17.27 5.00 22.27
1984 1.40 4.55 5.95
1985 26.33 5.11 31.44
1986 14.62 3.73 18.35
1987 2.03 3.64 5.67
1988 12.40 4.17 16.57
1989 27.25 3.86 31.11
1990 -6.56 3.36 -3.20
1991 26.31 3.82 30.13
1992 4.46 3.03 7.49
1993 7.06 2.82 9.88
1994 -1.54 2.82 1.28
1995 34.11 2.90 37.01
</TABLE>
[FN]
__________________
(1) The Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks
(the "Stocks") for any given period were selected by ranking the
dividend yields for each of the stocks in the DJIA as of the beginning
of the period, based upon an annualization of the last quarterly or semi-
annual ordinary dividend distribution (which would have been declared in
the preceding year) divided by that stock's market value on the first
trading day on the New York Stock Exchange in the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market
value of the Stocks as of the first trading day on the New York Stock
Exchange in a given period from the market value of the Stocks as of the
last trading day in that period, and dividing the result by the market
value of the Stocks as of the first trading day in that period.
Appreciation for the DJIA and the S&P is calculated by subtracting the
opening value of the DJIA and the S&P as of the first trading day in a
given period from the closing value of the DJIA and the S&P as of the
last trading day in that period, and dividing the result by the opening
value of the DJIA and the S&P as of the first trading day in that
period, respectively.
(3) Actual Dividend Yield for the Stocks is calculated by adding the
total dividends received on the Stocks in a given period and dividing
the result by the market value of the Stocks as of the first trading day
in that period. Actual Dividend Yield for the DJIA and the S&P is
calculated by taking the total dividends credited to the DJIA and the
S&P and dividing the result by the opening value of the DJIA and the S&P
as of the first trading day of the period, respectively.
(4) Total Return represents the sum of Appreciation and Actual Dividend
Yield. Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 25 years listed above, the
Stocks achieved an average annual total return of 20.67%, as compared to
the average annual total return of the DJIA and S&P, which was 12.05%
and 12.02%, respectively. The Stocks also had a higher average dividend
yield in each of the above 25 years and outperformed the DJIA and the
S&P in 19 of these years. Although the Trust seeks to achieve a better
performance than the DJIA and S&P, there can be no assurance that the
Trust will outperform the DJIA or the S&P over its one-year life or over
consecutive rollover periods, if available.
Page 9
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The chart above represents past performance of the DJIA, the S&P and
the Five Lowest Priced Stocks of the Ten Highest Yielding DJIA Stocks
(but not the Trust) and should not be considered indicative of future
results. Further, these results are hypothetical. The chart assumes that
all dividends during a year are reinvested at the end of that year and
does not reflect sales charges, commissions, expenses or taxes. There
can be no assurance that the Trust will outperform the DJIA or the S&P
over its one-year life or over consecutive rollover periods, if available.
Page 10
The following table compares the actual performance of the DJIA, the S&P
and approximately equal values of the ten stocks in the DJIA having the
highest dividend yield (the "Ten Highest Yielding DJIA Stocks") in each
of the 25 years listed below, as of December 31 in each of these years.
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
Five Lowest Priced Stocks of the
Ten Highest Yielding DJIA Stocks (1) Dow Jones Industrial Average (DJIA)
____________________________________ ___________________________________
Actual Actual
Dividend Total Dividend Total
Year Appreciation (2) Yield (3) Return (4) Appreciation (2) Yield (3) Return (4)
____ ________________ _________ __________ _______________ _________ __________
<S> <C> <C> <C> <C> <C> <C>
1971 -0.35% 5.05% 4.70% 6.11% 3.67% 9.78%
1972 17.89 5.43 23.32 14.58 3.60 18.18
1973 -1.47 5.43 3.96 -16.58 3.42 -13.16
1974 -8.14 7.42 -0.72 -27.57 4.36 -23.21
1975 46.87 9.16 56.03 38.32 6.16 44.48
1976 27.80 7.13 34.93 17.86 4.89 22.75
1977 -7.59 5.84 -1.75 -17.27 4.51 -12.76
1978 -6.96 7.08 0.12 -3.15 5.77 2.62
1979 4.58 8.41 12.99 4.19 6.33 10.52
1980 18.69 8.54 27.23 14.93 6.52 21.45
1981 -0.88 8.61 7.73 -9.23 5.83 -3.40
1982 17.81 8.24 26.05 19.61 6.23 25.84
1983 30.52 8.23 38.75 20.27 5.41 25.68
1984 -0.36 6.11 5.75 -3.74 4.81 1.07
1985 22.41 6.99 29.40 27.66 5.17 32.83
1986 28.66 6.13 34.79 22.58 4.38 26.96
1987 0.94 5.13 6.07 2.26 3.74 6.00
1988 18.51 5.82 24.33 11.85 4.12 15.97
1989 20.26 5.40 25.66 26.96 4.78 31.74
1990 -12.61 5.04 -7.57 -4.34 3.73 -0.61
1991 29.06 4.96 34.02 20.32 3.67 23.99
1992 3.15 4.64 7.79 4.17 3.20 7.37
1993 22.71 4.20 26.91 13.72 3.02 16.74
1994 0.04 4.01 4.05 2.14 2.80 4.94
1995 32.44 4.07 36.51 33.45 3.02 36.47
</TABLE>
<TABLE>
<CAPTION>
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
S&P 500 Index
_____________
Actual
Dividend Total
Year Appreciation (2) Yield (3) Return (4)
____ _______________ _________ _________
<S> <C> <C> <C>
1971 10.79% 3.33% 14.12%
1972 15.63 3.09 18.72
1973 -17.37 2.86 -14.51
1974 -29.72 3.71 -26.01
1975 31.55 5.38 36.93
1976 19.15 4.39 23.54
1977 -11.50 4.31 -7.19
1978 1.06 5.34 6.40
1979 12.31 5.70 18.01
1980 25.77 5.73 31.50
1981 -9.73 4.90 -4.83
1982 14.76 5.50 20.26
1983 17.27 5.00 22.27
1984 1.40 4.55 5.95
1985 26.33 5.11 31.44
1986 14.62 3.73 18.35
1987 2.03 3.64 5.67
1988 12.40 4.17 16.57
1989 27.25 3.86 31.11
1990 -6.56 3.36 -3.20
1991 26.31 3.82 30.13
1992 4.46 3.03 7.49
1993 7.06 2.82 9.88
1994 -1.54 2.82 1.28
1995 34.11 2.90 37.01
</TABLE>
[FN]
________________
(1) The Ten Highest Yielding DJIA Stocks (the "Stocks") for any given
period were selected by ranking the dividend yields for each of the
stocks in the DJIA as of the beginning of the period, based upon an
annualization of the last quarterly or semi-annual ordinary dividend
distribution (which would have been declared in the preceding year)
divided by that stock's market value on the first trading day on the New
York Stock Exchange in the given period.
(2) Appreciation for the Stocks is calculated by subtracting the market
value of the Stocks as of the first trading day on the New York Stock
Exchange in a given period from the market value of the Stocks as of the
last trading day in that period, and dividing the result by the market
value of the Stocks as of the first trading day in that period.
Appreciation for the DJIA and the S&P is calculated by subtracting the
opening value of the DJIA and the S&P as of the first trading day in a
given period from the closing value of the DJIA and the S&P as of the
last trading day in that period, and dividing the result by the opening
value of the DJIA and the S&P as of the first trading day in that
period, respectively.
(3) Actual Dividend Yield for the Stocks is calculated by adding the
total dividends received on the Stocks in a given period and dividing
the result by the market value of the Stocks as of the first trading day
in that period. Actual Dividend Yield for the DJIA and the S&P is
calculated by taking the total dividends credited to the DJIA and the
S&P and dividing the result by the opening value of the DJIA and the S&P
as of the first trading day of the period, respectively.
(4) Total Return represents the sum of Appreciation and Actual Dividend
Yield. Total Return does not take into consideration any sales charges,
commissions, expenses or taxes. Total Return does not take into
consideration any reinvestment of dividend income. Based on the year-by-
year returns contained in the table, over the 25 years listed above, the
Stocks achieved an average annual total return of 17.39%, as compared to
the average annual total return of all of the stocks in the DJIA and
S&P, which was 12.05% and 12.02%, respectively. The Stocks also had a
higher average dividend yield in each of the above 25 years and
outperformed the DJIA in 19 of these years and the S&P in 16 of these
years. Although the Trust seeks to achieve a better performance than the
DJIA and S&P, there can be no assurance that the Trust will outperform
the DJIA or S&P over its one-year life or over consecutive rollover
periods, if available.
Page 11
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
The chart above represents past performance of the DJIA, the S&P and
the Ten Highest Yielding DJIA Stocks (but not the Trust) and should not
be considered indicative of future results. Further, these results are
hypothetical. The chart assumes that all dividends during a year are
reinvested at the end of that year and does not reflect sales charges,
commissions, expenses or taxes. There can be no assurance that the Trust
will outperform the DJIA or the S&P over its one-year life or over
consecutive rollover periods, if available.
The returns shown above are not guarantees of future performance and
should not be used as a predictor of returns to be expected in
connection with a Trust Portfolio. Both stock prices (which may
appreciate or depreciate) and dividends (which may be increased, reduced
or eliminated) will affect the returns. As indicated in the previous
tables, the Ten Highest Yielding DJIA Stocks, including the Five Lowest
Priced Stocks of the Ten Highest Yielding DJIA Stocks, underperformed
the DJIA and the S&P in certain years, and there can be no assurance
that a Trust's Portfolio will outperform the DJIA or the S&P over the
life of a Trust or over consecutive rollover periods, if available. A
Holder of Units in a Trust would not necessarily realize as high a Total
Return on an investment in the stocks upon which the returns shown above
are based. The Total Return figures shown above do not reflect sales
charges, commissions, Trust expenses or taxes, and a Trust may not be
fully invested at all times.
Page 12
What are Some Additional Considerations for Investors?
The Trusts consist of different issues of Equity Securities, all of
which are listed on a national securities exchange. In addition, each of
the companies whose Equity Securities are included in a portfolio are
actively traded, well established corporations.
A Trust consists of such of the Equity Securities listed under "Schedule
of Investments" appearing in Part I of this Prospectus as may continue
to be held from time to time in such Trust and any additional Equity
Securities acquired and held by such 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 Equity Securities. However, should any
contract for the purchase of any of the Equity Securities initially
deposited hereunder fail, the Sponsor will, unless substantially all of
the moneys held in a Trust to cover such purchase are reinvested in
substitute Equity 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.
Risk Factors. Because certain of the Equity Securities from time to time
may be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders and
will not be reinvested, no assurance can be given that a Trust will
retain for any length of time its present size and composition. Although
the Portfolios are not managed, the Sponsor may instruct the Trustee to
sell Equity Securities under certain limited circumstances. Pursuant to
the Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities,
such as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities or
property are nonetheless acquired by a Trust, they may be accepted for
deposit in such Trust and either sold by the Trustee or held in such
Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities be
Removed from a Trust?" Equity Securities, however, will not be sold by a
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation or if the Equity Securities are no
longer among the ten common stocks in the DJIA with the highest dividend
yield, including the five lowest priced of the ten common stocks in the
DJIA with the highest dividend yield.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, a Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions and the value of a Trust will
be adversely affected if trading markets for the Equity 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 Equity Securities or the
general condition of the common stock market may worsen, and the value
of the Equity Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common
stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or
holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trusts have a
right to receive dividends only when and if, and in the amounts,
declared by the issuer's board of directors and have a right to
participate in amounts available for distribution by the issuer only
after all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the same
degree of protection of capital as do debt securities. The issuance of
Page 13
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.
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.
Unit holders will be unable to dispose of any of the Equity Securities
in a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in a Trust and will vote
such stocks in accordance with the instructions of the Sponsor.
Investors should be aware of certain other considerations before making
a decision to invest in a Trust. The value of common stocks is subject
to market fluctuations for as long as the common stocks remain
outstanding, and thus, the value of the Equity Securities will fluctuate
over the life of a Trust and may be more or less than the price at which
they were deposited in such Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the primary offering period of Units of a Trust and
during the Special Redemption and Liquidation Period) and other factors.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Equity Security. In the event of a
notice that any Equity Security will not be delivered ("Failed Contract
Obligations") to a Trust, the Sponsor is authorized under the Indenture
to direct the Trustee to acquire other Equity 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
a Trust, and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in such Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size of a
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in such 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 Equity Securities between
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trust will pay the brokerage fees associated
therewith.
Once all of the Equity Securities in a Trust are acquired, the Trustee
will have no power to vary the investments of such Trust, i.e., the
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, but may dispose of
Equity Securities only under limited circumstances. See "How May Equity
Securities be Removed from a Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
which might reasonably be expected to have a material adverse effect on
the Trusts. At any time after the Initial Date of Deposit, litigation
may be instituted on a variety of grounds with respect to the Equity
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 Trusts.
Petroleum Refining Companies. Certain Trusts may be considered to be
concentrated in common stocks of companies engaged in refining and
marketing oil and related products. See "Risk Factors" in Part I of this
Prospectus which will indicate, if applicable, the Trust's concentration
in the petroleum industry. According to the U.S. Department of Commerce,
Page 14
the factors which will most likely shape the industry include the price
and availability of oil from the Middle East, changes in United States
environmental policies and the continued decline in U.S. production of
crude oil. Possible effects of these factors may be increased U.S. and
world dependence on oil from the Organization of Petroleum Exporting
Countries ("OPEC") and highly uncertain and potentially more volatile
oil prices. Factors which the Sponsor believes may increase the
profitability of oil and petroleum operations include increasing demand
for oil and petroleum products as a result of the continued increases in
annual miles driven and the improvement in refinery operating margins
caused by increases in average domestic refinery utilization rates. The
existence of surplus crude oil production capacity and the willingness
to adjust production levels are the two principal requirements for
stable crude oil markets. Without excess capacity, supply disruptions in
some countries cannot be compensated for by others. Surplus capacity in
Saudi Arabia and a few other countries and the utilization of that
capacity prevented during the Persian Gulf crisis, and continues to
prevent, severe market disruption. Although unused capacity contributed
to market stability in 1990 and 1991, it ordinarily creates pressure to
overproduce and contributes to market uncertainty. The likely
restoration of a large portion of Kuwait and Iraq's production and
export capacity over the next few years could lead to such a development
in the absence of substantial growth in world oil demand. Formerly, OPEC
members attempted to exercise control over production levels in each
country through a system of mandatory production quotas. Because of the
crisis in the Middle East, the mandatory system has since been replaced
with a voluntary system. Production under the new system has had to be
curtailed on at least one occasion as a result of weak prices, even in
the absence of supplies from Kuwait and Iraq. The pressure to deviate
from mandatory quotas, if they are reimposed, is likely to be
substantial and could lead to a weakening of prices. In the longer term,
additional capacity and production will be required to accommodate the
expected large increases in world oil demand and to compensate for
expected sharp drops in U.S. crude oil production and exports from the
Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have
the petroleum reserves that will allow the required increase in
production capacity to be attained. Given the large-scale financing that
is required, the prospect that such expansion will occur soon enough to
meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers significantly to affect production, the concomitant volatility
of crude oil prices and increasing public and governmental concern over
air emissions, waste product disposal, fuel quality and the
environmental effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Trusts.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
Page 15
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisers. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Equity Securities in the Trusts or the issuers of
the Equity Securities. Changing approaches to regulation, particularly
with respect to the environment or with respect to the petroleum
industry, may have a negative impact on certain companies represented in
the Trusts. There can be no assurance that future legislation,
regulation or deregulation will not have a material adverse effect on
the Trusts or will not impair the ability of the issuers of the Equity
Securities to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based on the
aggregate underlying value of the Equity Securities in the Target 5
Trust and the Target 10 Trust, respectively, plus or minus cash, if any,
in the Income and Capital Accounts of such Trust, plus an initial sales
charge with respect to each Trust equal to the difference between the
maximum sales charge for each Trust (2.70% and 2.90% of the Public
Offering Price, respectively) and the maximum remaining deferred sales
charge (initially $.190 per Unit for each Trust) divided by the amount
of Units of such Trust outstanding. A deferred sales charge of $.0190
will also be assessed per Unit per month on the dates set forth under
"Public Offering Price" in Part I. Units purchased subsequent to the
initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments. For each
Trust, the deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Equity Securities.
The total maximum sales charge assessed to Unit holders on a per Unit
basis will be 2.70% and 2.90% of the Public Offering Price (equivalent
to 2.722% and 2.929% of the net amount invested, exclusive of the
deferred sales charge) for the Target 5 Trust and the Target 10 Trust,
respectively.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in a
Trust, plus or minus cash, if any, in the Income and Capital Accounts of
such Trust divided by the number of Units of such Trust outstanding.
The minimum purchase of each Trust is $1,000 ($250 for an Individual
Retirement Account or other retirement plans), except for Rollover Unit
holders who are not subject to a minimum purchase amount. The applicable
sales charge of the Target 5 Trust for primary market sales is reduced
by a discount as indicated below for volume purchases as a percentage of
the Public Offering Price (except for sales made pursuant to a "wrap fee
account" or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Dollar Amount of Maximum
Transaction at Sales Net Dealer
Public Offering Price Discount Charge Concession
_____________________ ________ _______ __________
<S> <C> <C> <C>
$ 50,000 but less than 100,000 0.25% 2.45% 1.65%
$100,000 but less than 150,000 0.60% 2.10% 1.30%
$150,000 or more No upfront load 1.90% 1.10%
</TABLE>
The applicable sales charge of the Target 10 Trust for primary market
sales is reduced by a discount as indicated below for volume purchases
as a percentage of the Public Offering Price (except for sales made
pursuant to a "wrap fee account" or similar arrangements as set forth
below):
<TABLE>
<CAPTION>
Dollar Amount of Maximum
Transaction at Sales Net Dealer
Public Offering Price Discount Charge Concession
_______________ ________ _______ __________
<S> <C> <C> <C>
$ 50,000 but less than 100,000 0.30% 2.60% 1.75%
$100,000 but less than 150,000 0.65% 2.25% 1.50%
$150,000 or more No upfront load 1.90% 1.15%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
dealer. An investor may aggregate purchases of Units of both the Target
5 Trust and Target 10 Trust for purposes of qualifying for volume
purchase discounts listed above. The aggregate amount of Units of both
Page 16
Trusts purchased will be used to determine the applicable sales charge
to be imposed on the purchase of Units of each Trust. The sales charge
reduction for quantity purchases will not apply to Rollover Unit
holders. The reduced sales charge structure will apply on all purchases
of Units in a Trust by the same person on any one day from any one
dealer. 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 dealer of any such combined
purchase prior to the sale in order to obtain the indicated discount. In
addition, Unit holders of other unit investment trusts having a similar
strategy as Target 5 Trust and Target 10 Trust may utilize their
termination proceeds to purchase Units of Target 5 Trust and Target 10
Trust subject to a deferred sales charge of $.0190 per Unit per month to
be collected on each of the remaining deferred sales charge payment
dates as provided herein. 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, dealers and
their affiliates, will be able to purchase Units at the Public Offering
Price less the applicable dealer concession.
Investors who purchase Units through registered broker-dealers who charge
periodic fees for financial planning, investment advisory or asset
management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed may purchase Units in the primary market, subject only to
the deferred portion of the sales charge, or during the 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 Trusts 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" appearing
in Part I of this Prospectus. 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 Equity
Securities. During the initial offering period, the aggregate value of
the Units of a Trust shall be determined on the basis of the aggregate
underlying value of the Equity Securities therein plus or minus cash, if
any, in the Income and Capital Accounts of such Trust. The aggregate
underlying value of the Equity Securities will be determined in the
following manner: if the Equity Securities are listed on a national
securities exchange or the NASDAQ National Market System, this
evaluation is generally based on the closing sale prices on that
exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale
price on that exchange or system, at the closing ask prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange, the evaluation shall
generally be based on the current ask 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
Equity Securities on the ask side of the market or (c) by any
combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of a Trust plus the applicable sales
charge.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of Units on the date of settlement
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of
1934. Delivery of Certificates representing Units so ordered will be
made three business days following such order or shortly thereafter. See
"Rights of Unit Holders-How May Units be Redeemed?" for information
regarding the ability to redeem Units ordered for purchase.
Page 17
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 Equity Securities or cash are deposited by the Sponsor, Units
will be distributed to the public at the then current Public Offering
Price. During such period, the Sponsor may deposit additional Equity
Securities or cash in a Trust and create additional Units. Units
reacquired by the Sponsor during the initial offering period 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 Trusts for
sale in a number of states. With respect to the Target 5 Trust, sales
will be made to dealers and others at prices which represent a
concession or agency commission of 1.80% of the Public Offering Price
for primary and secondary market sales. With respect to the Target 10
Trust, sales will be made to dealers and others at prices which
represent a concession or agency commission of 2.00% of the Public
Offering Price for primary and secondary market sales. Dealers and
others will receive a concession or agency commission of 1.0% of the
Public Offering Price on purchases by Rollover Unit holders. However,
resales of Units of the Trusts by such dealers and others to the public
will be made at the Public Offering Price described in the prospectus.
Notwithstanding the foregoing, with respect to sales of Units of a Trust
with total assets which equal or exceed $30 million, dealers and others
who sell over $10 million in Units will receive a total concession of
2.00% of the Public Offering Price ($.120 per Unit for Rollover Units)
for a Target 5 Trust and 2.15% of the Public Offering ($.120 per Unit
for Rollover Units) for a Target 10 Trust while dealers and others who
sell over $20 million in Units will receive a total concession of 2.15%
of the Public Offering Price ($.135 per Unit for Rollover Units) for a
Target 5 Trust and 2.30% of the Public Offering Price ($.135 per Unit
for Rollover Units) for a Target 10 Trust. With respect to sales of
Units of a Trust with total assets of less than $30 million, dealers and
others who sell over $10 million in Units will receive a total
concession of 1.90% of the Public Offering Price ($.110 per Unit for
Rollover Units) for a Target 5 Trust and 2.05% of the Public Offering
Price ($.110 per Unit for Rollover Units) for a Target 10 Trust while
dealers and others who sell over $20 million in Units will receive a
total concession of 2.00% of the Public Offering Price ($.190 per Unit
for Rollover Units) for a Target 5 Trust and 2.15% of the Public
Offering Price ($.120 per Unit for Rollover Units) for a Target 10
Trust. The Sponsor reserves the right to change the amount of the
concession or agency commission from time to time. In the event the
Sponsor reacquires, or the Trustee redeems, Units from brokers, dealers
and others while a market is being maintained for such Units, such
entities agree to repay immediately to the Sponsor any such concession
or agency commission relating to such reacquired Units. Certain
commercial banks may be making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by
these customers is 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.
The Sponsor expects to recoup the foregoing payments from the deferred
sales charge payments related to such Trusts.
From time to time the Sponsor may implement programs under which dealers
of a Trust may receive nominal awards from the Sponsor for each of their
registered representatives who have sold a minimum number of UIT Units
during a specified time period. In addition, at various times the
Sponsor may implement other programs under which the sales force of a
dealer may be eligible to win other nominal awards for certain sales
efforts, or under which the Sponsor will reallow to any such 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 dealers for certain services or activities which
Page 18
are primarily intended to result in sales of Units of the Trusts. Such
payments are made by the Sponsor out of its own assets, and not out of
the assets of a Trust. These programs will not change the price Unit
holders pay for their Units or the amount that a Trust will receive from
the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on a Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as the common stocks
comprising the DJIA, 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 Trusts.
U.S. Government bonds, for example, are backed by the full faith and
credit of the U.S. Government and bank CDs and money market accounts are
insured by an agency of the federal government. Money market accounts
and money market funds provide stability of principal, but pay interest
at rates that vary with the condition of the short-term debt market. The
investment characteristics of each Trust are described more fully
elsewhere in this Prospectus.
Advertisements and other sales material for the Trusts may also show the
total returns (price changes plus dividends received, divided by the
maximum public offering price) of each completed prior series and the
total and average annualized return of all series in the same quarterly
cycle, assuming the holder rolled over at the termination of each prior
series. These returns will reflect all applicable sales charges and
expenses.
Trust performance may be compared to performance on a total return basis
of the DJIA, 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 a Trust's relative performance for any future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal to
a maximum of 2.70% of the Public Offering Price of the Units (equivalent
to 2.722% of the net amount invested, exclusive of the deferred sales
charge) for the Target 5 Trust and a maximum of 2.90% of the Public
Offering Price of the Units (equivalent to 2.929% of the net amount
invested, exclusive of the deferred sales charge) for the Target 10
Trust, less any reduced sales charge for quantity purchases as described
under "Public Offering-How is the Public Offering Price Determined?" 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 Equity Securities to a Trust (which
is based on the Evaluator's determination of the aggregate offering
price of the underlying Equity Securities of such Trust on the Initial
Date of Deposit as well as on subsequent deposits) and the cost of such
Equity Securities to the Sponsor. See Note (2) of "Schedule of
Investments" appearing in Part I of this Prospectus. During the initial
offering period, the dealers and others also may realize profits or
sustain losses as a result of fluctuations after the Date of Deposit in
the Public Offering Price received by such dealers and others upon the
sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a maximum sales charge of 2.70% with
respect to the Target 5 Trust and 2.90% with respect to the Target 10
Trust) or redeemed. The secondary market public offering price of Units
may be greater or less than the cost of such Units to the Sponsor. The
Sponsor may also realize profits or sustain losses in connection with
the creation of additional Units for the Distribution Reinvestment Option.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to maintain a market for the Units and
continuously offer to purchase Units at prices, subject to change at any
time, based upon the aggregate underlying value of the Equity Securities
in a Trust plus or minus cash, if any, in the Income and Capital
Accounts of such 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
Page 19
borne by the Sponsor. If the supply of Units exceeds demand, or for some
other business reason, the Sponsor may discontinue purchases of Units at
such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS, HE SHOULD
INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO MAKING A
TENDER FOR REDEMPTION TO THE TRUSTEE. Units subject to a deferred sales
charge which are sold or tendered for redemption prior to such time as
the entire deferred sales charge on such Units has been collected will
be assessed the amount of the remaining deferred sales charge at the
time of sale or redemption.
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 or may be redeemed by presentation and surrender to the
Trustee 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 signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority. Record
ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. Only
Unit holders who elect to hold Units in uncertificated form are eligible
to participate as a Rollover Unit holder. 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 a 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 a Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See
"Summary of Essential Information" in Part I of this Prospectus. 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. Proceeds received on the sale of any Equity Securities in a
Trust, to the extent not used to meet redemptions of Units, pay the
deferred sales charge or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals at
least $1.00 per 100 Units. The Trustee is not required to pay interest
Page 20
on funds held in the Capital Account of a 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 as part of the final liquidation distribution, and in
certain circumstances, earlier. See "What is the Federal Tax Status of
Unit Holders?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. To the extent
that amounts in the Capital Account are insufficient to satisfy the then
current deferred sales charge obligation, Equity Securities may be sold
to meet such shortfall. Distributions of amounts necessary to pay the
deferred portion of the sales charge will be made to an account
designated by the Sponsor for purposes of satisfying Unit holders'
deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
a 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 under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable 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 a Trust is terminated, each Unit holder
who is not a Rollover Unit holder will, upon surrender of his Units for
redemption, receive (i) the pro rata share of the amounts realized upon
the disposition of Equity Securities, unless he elects an In-Kind
Distribution as described below and (ii) a pro rata share of any other
assets of such Trust, less expenses of such Trust. Not less than 30 days
prior to the Mandatory Termination Date of a Trust the Trustee will
provide written notice thereof to all Unit holders and will include with
such notice a form to enable Unit holders to elect a distribution of
shares of Equity Securities (an "In-Kind Distribution"), if such Unit
holder owns at least 2,500 Units of such Trust, rather than to receive
payment in cash for such Unit holder's pro rata share of the amounts
realized upon the disposition by the Trustee of Equity Securities. An In-
Kind Distribution will be reduced by customary transfer and registration
charges. To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee, must be
returned to the Trustee at least five business days prior to the
Mandatory Termination Date of a Trust. A Unit holder may, of course, at
any time after the Equity Securities are distributed, sell all or a
portion of the shares.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.,
return of capital, etc.) are credited to the Capital Account of a Trust.
The Trustee may establish reserves (the "Reserve Account") within a
Trust for state and local taxes, if any, and any governmental charges
payable out of such Trust.
Distribution Reinvestment Option. Any Unit holder may elect to have each
distribution of income or capital on his Units, other than the final
liquidating distribution in connection with the termination of a Trust,
automatically reinvested in additional Units of such Trust. Each person
who purchases Units of a Trust may elect to become a participant in the
Distribution Reinvestment Option by notifying the Trustee of their
election. The Distribution Reinvestment Option may not be available in
all states. In order to enable a Unit holder to participate in the
Distribution Reinvestment Option with respect to a particular
distribution on his Units, the card must be received by the Trustee
within 10 days prior to the Record Date for such distribution. Each
subsequent distribution of income or capital on the participant's Units
will be automatically applied by the Trustee to purchase additional
Units of a Trust. The remaining deferred sales charge payments will be
assessed on Units acquired pursuant to the Distributions Reinvestment
Option. IT SHOULD BE REMEMBERED THAT EVEN IF DISTRIBUTIONS ARE
REINVESTED, THEY ARE STILL TREATED AS DISTRIBUTIONS FOR INCOME TAX
PURPOSES.
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
Page 21
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 a Trust the following information in reasonable detail: (1) a summary
of transactions in such Trust for such year; (2) any Equity Securities
sold during the year and the Equity Securities held at the end of such
year by such 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 a Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its corporate trust office in the City of New York of the
certificates representing the Units to be redeemed, or in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with 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 (if such day is a
day on which the New York Stock Exchange is open for trading), except
that as regards Units received after 4:00 p.m. Eastern time (or as of
any earlier closing time on a day on which the New York Stock Exchange
is scheduled in advance to close at such earlier 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. Units tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more of a Trust 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
Equity Securities in an amount and value of Equity 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 ("In-Kind Distributions") shall be made by the Trustee
through the distribution of each of the Equity 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 Equity
Securities comprising a portfolio and cash from the Capital Account
equal to the fractional shares to which the tendering Unit holder is
entitled. The Trustee may adjust the number of shares of any issue of
Equity 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 Equity 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 Equity
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. For further information regarding this withholding, see
"How are Income and Capital Distributed?" 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 a 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 a Trust.
The Trustee is empowered to sell Equity Securities of a Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of a Trust will be reduced.
Such sales may be required at a time when Equity Securities would not
otherwise be sold and might result in lower prices than might otherwise
be realized.
Page 22
The Redemption Price per Unit and the secondary market Public Offering
Price will be determined on the basis of the aggregate underlying value
of the Equity Securities in a Trust plus or minus cash, if any, in the
Income and Capital Accounts of such 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 a Trust other than cash deposited in the Trust
to purchase Equity Securities not applied to the purchase of such Equity
Securities; (2) the aggregate value of the Equity Securities (including
"when issued" contracts, if any) held in such Trust, as determined by
the Evaluator on the basis of the aggregate underlying value of the
Equity Securities in such Trust next computed; and (3) dividends
receivable on the Equity Securities trading ex-dividend as of the date
of computation; and deducting therefrom: (1) amounts representing any
applicable taxes or governmental charges payable out of such Trust; (2)
any amounts owing to the Trustee for its advances; (3) an amount
representing estimated accrued expenses of such Trust, including but not
limited to fees and expenses of the Trustee (including legal fees), the
Evaluator and supervisory fees, if any; (4) cash held for distribution
to Unit holders of record of such Trust as of the business day prior to
the evaluation being made; and (5) other liabilities incurred by such
Trust; and finally dividing the results of such computation by the
number of Units of such Trust outstanding as of the date thereof. The
redemption price per Unit will be assessed the amount, if any, of the
remaining deferred sales charge at the time of redemption.
The aggregate value of the Equity Securities for purposes of the
Redemption Price and Secondary Market Public Offering Price will be
determined in the following manner: if the Equity Securities are listed
on a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices on that
exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale
price on that exchange or system, at the closing bid prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefore 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 Equity
Securities on the bid side of the market or (c) by any combination of
the above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will be made of
all Units of the Trusts held by any Unit holder (a "Rollover Unit
holder") who affirmatively notifies the Trustee in writing that he so
desires by the Rollover Notification Date specified in the "Summary of
Essential Information" appearing in Part I of this Prospectus.
All Units of Rollover Unit holders will be redeemed In-Kind on the
Special Redemption and Liquidation Date and the underlying Equity
Securities will be distributed to the Distribution Agent on behalf of
the Rollover Unit holders. On the Special Redemption and Liquidation
Date (as set forth in "Summary of Essential Information" in Part I), the
Distribution Agent will be required to sell all of the underlying Equity
Securities on behalf of Rollover Unit holders. The sales proceeds will
be net of brokerage fees, governmental charges or any expenses involved
in the sales.
The Distribution Agent will engage the Sponsor as its agent to sell the
distributed Equity Securities. The Sponsor will attempt to sell the
Equity Securities as quickly as is practicable on the Special Redemption
and Liquidation Date. The Sponsor does not anticipate that the period
will be longer than one day, given that the Equity Securities are
Page 23
usually highly liquid. The liquidity of any Equity Security depends on
the daily trading volume of the Equity Security and the amount that the
Sponsor has available for sale on any particular day.
Pursuant to an exemptive order from the Securities and Exchange
Commission, each terminating Target 10 Trust and Target 5 Trust (and the
Distribution Agent on behalf of Rollover Unit holders) will sell Equity
Securities to the New Trusts if those Equity Securities continue to meet
the Target 10 Trust and Target 5 Trust strategy by remaining among the
ten highest dividend-yielding or five lowest priced of the ten highest
dividend-yielding securities in the respective Trust. The exemption will
enable each Trust to eliminate commission costs on these transactions.
The price for those Equity Securities will be the closing sale price on
the sale date on the exchange where the Equity Securities are
principally traded, as certified by the Sponsor and confirmed by the
Trustee of each Trust.
The Sponsor intends to create a separate New Trust for both the Target 5
Trust Series and the Target 10 Trust Series. The Rollover Unit holders'
proceeds will be invested in either New Trust (as selected by the Unit
holder), if then registered in such state and being offered, the
portfolio of which will contain, in the case of the Target 5 Trust
Series, common stock of the five companies with the lowest per share
stock price of the ten highest dividend yielding stocks in the Dow Jones
Industrial Average as of the business day prior to the Initial Date of
Deposit, and in the case of the Target 10 Trust Series, common stock of
the ten highest dividend yielding stocks in the Dow Jones Industrial
Average as of the business day prior to the Initial Date of Deposit. The
proceeds of redemption will be used to buy New Trust units as the
proceeds become available. Any Rollover Unit holder may thus be redeemed
out of a Trust and become a holder of an entirely different trust, a New
Trust, with a different portfolio of Equity Securities. In accordance
with the Rollover Unit holders' offer to purchase the New Trust units,
the proceeds of the sales (and any other cash distributed upon
redemption) will be invested in a New Trust, at the public offering
price, including the applicable maximum sales charge per Unit (which for
Rollover Unit holders is currently expected to be $.190 per unit for the
New Series of the Target 5 Trust Series and the Target 10 Trust Series,
all of which will be deferred as provided herein).
The Sponsor intends to create New Trust units as quickly as possible,
dependent upon the availability and reasonably favorable prices of the
Equity Securities included in a New Trust portfolio, and it is intended
that Rollover Unit holders will be given first priority to purchase the
New Trust units. There can be no assurance, however, as to the exact
timing of the creation of the New Trust units or the aggregate number of
New Trust units which the Sponsor will create. The Sponsor may, in its
sole discretion, stop creating new units (whether permanently or
temporarily) at any time it chooses, regardless of whether all proceeds
of the Special Redemption and Liquidation have been invested on behalf
of Rollover Unit holders. Cash which has not been invested on behalf of
the Rollover Unit holders in New Trust units will be distributed within
a reasonable time after such occurrence. However, since the Sponsor can
create units, the Sponsor anticipates that sufficient units can be
created, although moneys in a New Trust may not be fully invested on the
next business day.
The process of redemption, liquidation, and investment in a New Trust is
intended to allow for the fact that the portfolios selected by the
Sponsor are chosen on the basis of growth and income potential only for
a year, at which point a new portfolio is chosen. It is contemplated
that a similar process of redemption, liquidation and investment in a
New Trust will be available as each Series of the Target 5 Trust and
Target 10 Trust terminates.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in a New Trust,
no cash would be distributed at that time to pay any taxes. Included in
the cash for the Special Redemption and Liquidation will be an amount of
cash attributable to the second semi-annual distribution of dividend
income; accordingly, Rollover Unit holders also will not have cash from
this source distributed to pay any taxes. See "What is the Federal Tax
Status of Unit holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a period as they can without
materially adversely affecting the price of the Equity Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated ("Remaining Unit holders")
Page 24
will not realize capital gains or losses due to the Special Redemption
and Liquidation, and will not be charged any additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the New Trusts or any subsequent series of the Trusts, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before the Special
Redemption and Liquidation. All Unit holders will then be remaining Unit
holders, with rights to ordinary redemption as before. See "How May
Units be Redeemed?" The Sponsor may modify the terms of the New Trusts
or any subsequent series of the Trusts. The Sponsor may also modify,
suspend or terminate the Rollover Option upon notice to the Unit holders
of such amendment at least 60 days prior to the effective date of such
amendment.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
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 Equity Securities be Removed from a Trust?
The Portfolios of the Trusts are not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to a Trust.
Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by a Trust of any securities or other property other than the Equity
Securities is prohibited. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by a Trust, they may be accepted for deposit in a Trust and
either sold by the Trustee or held in a Trust pursuant to the direction
of the Sponsor (who may rely on the advice of the Portfolio Supervisor).
Proceeds from the sale of Equity Securities by the Trustee are credited
to the Capital Account of a Trust for distribution to Unit holders or to
meet redemptions.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of
expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for a Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Page 25
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds, The
First Trust GNMA, Templeton Growth and Treasury Trust, Templeton Foreign
Fund & U.S. Treasury Securities Trust and The Advantage Growth and
Treasury Securities Trust. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
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 Trusts 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 Equity Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Equity 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.
Page 26
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or 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 and the Trustee,
in which event the Sponsor and the Trustee are to use their best efforts
to appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information" in Part I of this Prospectus. The Trust may be liquidated
at any time by consent of 100% of the Unit holders of a Trust or by the
Trustee when the value of the Equity Securities owned by such Trust as
shown by any evaluation, is less than the lower of $2,000,000 or 20% of
the total value of Equity Securities deposited in such Trust during the
primary offering period, or in the event that Units of such Trust not
yet sold aggregating more than 60% of the Units of such Trust are
tendered for redemption by the Underwriter, including the Sponsor. If a
Trust is liquidated because of the redemption of unsold Units of such
Trust by the Underwriter, the Sponsor will refund to each purchaser of
Units of such Trust the entire sales charge paid by such purchaser; however,
liquidation of the Trust in other circumstances will result in all remaining
unpaid deferred sales charges being deducted from termination proceeds paid
to Unit holders. In the event of termination, written notice thereof will
be sent by the Trustee to all Unit holders of a Trust. Within a reasonable
period after termination, the Trustee will follow the procedures set forth
under "How are Income and Capital Distributed?" Also, because of the Special
Redemption and Liquidation in a New Trust, there is a possibility that a
Trust may be reduced below the Discretionary Liquidation Amount and that
a Trust could therefore be terminated at that time before the Mandatory
Termination Date of the Fund.
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of a Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of a 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 such Trust
maintained by the Trustee. Not less than 30 days prior to the Mandatory
Page 27
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 to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of a Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. 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 a Trust. Unit holders not
electing a distribution of shares of Equity Securities and who do not
elect the Rollover Option will receive a cash distribution from the sale
of the remaining Equity Securities within a reasonable time after a
Trust is terminated. Regardless of the distribution involved, the
Trustee will deduct from the funds of a 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 Equity
Securities in a 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 statements of net assets, including the schedules of investments, of
the Trusts at the opening of business on the Initial Date of Deposit
appearing in Part I of this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing in Part I of this Prospectus and in the
Registration Statement, and are included in reliance upon such report
given upon the authority of such firm as experts in accounting and
auditing.
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Page 31
CONTENTS:
The First Trust Special Situations Trust Series
What is The First Trust Special Situations Trust? 1
What are the Expenses and Charges? 2
What is the Federal Tax Status of Unit Holders? 3
Why are Investments in the Trusts Suitable for
Retirement Plans? 6
Portfolio:
What are Equity Securities? 7
The Dow Jones Industrial Average, Historical
Perspective 7
What are Some Additional Considerations for Investors? 13
Risk Factors 13
Public Offering:
How is the Public Offering Price Determined? 16
How are Units Distributed? 18
What are the Sponsor's Profits? 19
Will There be a Secondary Market? 19
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 20
How are Income and Capital Distributed? 20
What Reports will Unit Holders Receive? 21
How May Units be Redeemed? 22
Special Redemption, Liquidation and
Investment in a New Trust 23
How May Units be Purchased by the Sponsor? 25
How May Equity Securities be Removed from a Trust? 25
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 26
Who is the Trustee? 26
Limitations on Liabilities of Sponsor and Trustee 26
Who is the Evaluator? 27
Other Information:
How May the Indenture be Amended or Terminated? 27
Legal Opinions 28
Experts 28
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
Target 5 Trust
Target 10 Trust
Prospectus
Part II
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 32
-APPENDIX-
The graph which appears on page 10 of the prospectus represents a
comparison between a $10,000 investment made on January 1, 1971 in those
stocks which comprise the Dow Jones Industrial Average, the Standard &
Poor's 500 Composite Stock Price Index and the five lowest priced stocks
of the ten common stocks in the Dow Jones Industrial Average having the
highest dividend yield as of December 31 of each respective year. The
chart indicates that $10,000 invested on January 1, 1971 in the stocks
which comprise the Dow Jones Industrial Average would on December 31,
1995 be worth $172,002 as opposed to $170,840 had the $10,000 been
invested in the Standard & Poor's 500 Composite Stock Price Index and
$1,096,944 had the $10,000 been invested in the five lowest priced
stocks of the ten common stocks in the Dow Jones Industrial Average
having the highest dividend yield as of December 31 of each respective
year. Each figure assumes that dividends received during each year will
be reinvested at year end and sales charges, commissions, expenses and
taxes were not considered in determining total returns.
The graph which appears on page 12 of the prospectus represents a
comparison between a $10,000 investment made on January 1, 1971 in those
stocks which comprise the Dow Jones Industrial Average, the Standard &
Poor's 500 Composite Stock Price Index and the ten common stocks in the
Dow Jones Industrial Average having the highest dividend yield as of
December 31 of each respective year. The chart indicates that $10,000
invested on January 1, 1971 in the stocks which comprise the Dow Jones
Industrial Average would on December 31, 1995 be worth $172,002 as
opposed to $170,840 had the $10,000 been invested in the Standard &
Poor's 500 Composite Stock Price Index and $549,948 had the $10,000 been
invested in the ten common stocks in the Dow Jones Industrial Average
having the highest dividend yield as of December 31 of each respective
year. Each figure assumes that dividends received during each year will
be reinvested at year end and sales charges, commissions, expenses and
taxes were not considered in determining total returns.
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 153, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1,
The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, The First Trust
Special Situations Trust, Series 69 Target Equity Trust Value Ten
Series and The First Trust Special Situations Trust, Series 119
Target 5 Trust, Series 2 Target 10 Trust, Series 8, for purposes
of the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
153, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
August 1, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 153
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) August 1, 1996
General Partner of )
Nike Securities L.P.)
)
)
) Robert M. Porcellino
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated August 1, 1996 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-07825) and related Prospectus of The First Trust Special
Situations Trust, Series 153.
ERNST & YOUNG LLP
Chicago, Illinois
August 1, 1996
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 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 First Trust
Advisors 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 153 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 153
TRUST AGREEMENT
Dated: August 1, 1996
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank, as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions
of Trust for The First Trust Special Situations Trust, Series 22
and certain subsequent Series, Effective November 20, 1991"
(herein called the "Standard Terms and Conditions of Trust"), and
such provisions as are incorporated by reference constitute a
single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TARGET 5 TRUST, AUGUST 1996 SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
20% AT&T Corporation, 20% Chevron
Corporation, 20% General Motors Corporation,
20% International Paper Company, 20%
Minnesota Mining & Manufacturing Company.
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0025 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0085 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05. However, in
no event, except as may otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive
compensation in any one year from any Trust of less than $2,000
for such annual compensation.
I. The Initial Date of Deposit for the Trust is August 1,
1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR TARGET 10 TRUST, AUGUST 1996 SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
10% AT&T Corporation, 10% Chevron
Corporation, 10% E.I. du Pont de Nemours &
Company, 10% Exxon Corporation, 10% General
Motors Corporation, 10% International Paper
Company, 10% Minnesota Mining & Manufacturing
Company, 10% J.P. Morgan & Company, Inc., 10%
Philip Morris Companies, Inc., 10% Texaco,
Inc.
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0025 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0085 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05. However, in
no event, except as may otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive
compensation in any one year from any Trust of less than $2,000
for such annual compensation.
I. The Initial Date of Deposit for the Trust is August 1,
1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank
or any successor trustee appointed as
hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
B. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
C. Section 1.01(27) shall be added to read as follows:
"(27) The "Rollover Notification Date" shall be
defined as set forth in the Prospectus under "Summary of
Essential Information."
D. Section 1.01(28) shall be added to read as follows:
"(28) The term "Rollover Distribution" shall be
defined as set forth in Section 5.05, herein."
E. Section 1.01(29) shall be added to read as follows:
"(29) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.02 herein."
F. Section 1.01(30) shall be added to read as follows:
"(30) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information."
G. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
H. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows and, in connection therewith, the third
paragraph of Section 3.02 shall be deleted:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchase in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur with 20 days from the date of a failure
occurring within such initial 90-day period) shall maintain
exactly the Percentage Ratio existing immediately prior to
such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit.
I. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
J. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Principal Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
K. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Principal
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Principal Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the fifth
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
L. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
M. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Principal Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall, within five days thereafter, mail to all Unit
holders of such Trust notices of such acquisition unless
legal counsel for such Trust determines that such notice is
not required by The Investment Company Act of 1940, as
amended."
N. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Principal Account and pay to the Depositor the
amount that it is entitled to receive pursuant to Section
3.14.
O. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in
Section 26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount which shall not exceed that amount set forth in
the Prospectus times the number of Units outstanding as of
January 1 of such year except for a year or years in which
an initial offering period as determined by Section 4.01 of
this Indenture occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such
month (such annual fee to be pro rated for any calendar year
in which the Depositor provides service during less than the
whole of such year), but in no event shall such compensation
when combined with all compensation received from other unit
investment trusts for which the Depositor hereunder is
acting as Depositor for providing such bookkeeping and
administrative services in any calendar year exceed the
aggregate cost to the Depositor providing services to such
unit investment trusts. Such compensation may, from time to
time, be adjusted provided that the total adjustment upward
does not, at the time of such adjustment, exceed the
percentage of the total increase, after the date hereof, in
consumer prices for services as measured by the United
States Department of Labor Consumer Price Index entitled
"All Services Less Rent of Shelter" or similar index, if
such index should no longer be published. The consent or
concurrence of any Unit holder hereunder shall not be
required for any such adjustment or increase. Such
compensation shall be paid by the Trustee, upon receipt of
invoice therefor from the Depositor, upon which, as to the
cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against
the Interest and Principal Accounts on or before the
Distribution Date following the Monthly Record Date on which
such period terminates. The Trustee shall have no liability
to any Certificateholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Interest and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.14, the Trustee shall
have the power to sell (i) Bonds from the current list of
Bonds designated to be sold pursuant to Section 5.02 hereof,
or (ii) if no such Bonds have been so designated, such Bonds
as the Trustee may see fit to sell in its own discretion,
and to apply the proceeds of any such sale in payment of the
amounts payable pursuant to this Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
P. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus, withdraw from the Capital
Account, an amount per Unit specified in such Prospectus and
credit such amount to a special non-Trust account designated
by the Depositor out of which the deferred sales charge will
be distributed to the Depositor (the "Deferred Sales Charge
Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. If a Unit
holder redeems Units prior to full payment of the deferred
sales charge, the Trustee shall, if so provided in the
related Prospectus, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
"If the Trust is terminated for reasons other than that set
forth in Section 6.01(g)(ii), the Trustee shall, if so
provided in the related Prospectus, on the termination of
the Trust, withhold from the proceeds payable to Unit
holders an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to the
Deferred Sales Charge Account. If the Trust is terminated
pursuant to Section 6.01(g)(ii), the Trustee shall not
withhold from the proceeds payable to Unit holders any
amounts of unpaid deferred sales charges." If pursuant to
Section 5.02 hereof, the Depositor shall purchase a Unit
tendered for redemption prior to the payment in full of the
deferred sales charge due on the tendered Unit, the
Depositor shall pay to the Unit holder the amount specified
under Section 5.02 less the unpaid portion of the deferred
sales charge. All advances made by the Trustee pursuant to
this Section shall be secured by a lien on the Trust prior
to the interest of the Unit holders."
Q. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Unit holders may redeem 2,500 Units or more of a Trust
and request a distribution in kind of (i) such Unit holder's
pro rata portion of each of the Securities in such Trust, in
whole shares, and (ii) cash equal to such Unit holder's
pro rata portion of the Income and Principal Accounts as
follows: (x) a pro rata portion of the net proceeds of sale
of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Principal Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, to the extent possible, distributions of Securities
pursuant to an in kind redemption of Units 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. Any distribution in kind will be reduced by
customary transfer and registration charges."
R. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of Target Equity
Trust, Value Ten Series or Target Equity Trust, Value Five
Series (individually, each a "New Series" and collectively,
the "New Series"), the Trustee shall, at the Depositor's
sole cost and expense, include in the notice sent to Unit
holders specified in Section 8.02 a form of election whereby
Unit holders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Units(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included
in the redemption distribution sold, and the cash proceeds
applied by the Distribution Agent to purchase Units of a New
Series, all as hereinafter provided. The Trustee shall
honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption
request with respect to uncertificated Units, by its close
of business on the Rollover Notification Date.
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled on the
Rollover Notification Date. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
Rollover Notification Date of the net asset value
(determined on the basis of the Trust Fund Evaluation as of
the Rollover Notification Date in accordance with
Section 4.01) multiplied by the number of Units being
redeemed (herein called the "Rollover Distribution"). Any
Securities that are made part of the Rollover Distribution
shall be valued for purposes of the redemption distribution
as of the Rollover Notification Date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent on the
Special Redemption and Liquidation Date specified in the
Prospectus pursuant to the Depositor's direction, and the
Distribution Agent shall employ the Depositor as broker in
connection with such sales. For such brokerage services,
the Depositor shall be entitled to compensation at its
customary rates, provided however, that its compensation
shall not exceed the amount authorized by applicable
Securities laws and regulations. The Depositor shall direct
that sales be made in accordance with the guidelines set
forth in the Prospectus under the heading "Special
Redemption, Liquidation and Investment in New Trusts."
Should the Depositor fail to provide direction, the
Distribution Agent shall sell the Securities in the manner
provided in the prospectus for " less liquid Equity
Securities." The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon each trade date for sales of Securities included
in the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of a New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such Trust. Such contract shall
provide for purchase of the maximum number of Units of a New
Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of a New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of a New Series
will be uncertificated unless and until the Rollover Unit
holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation
resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in
the event the Depositor does not make Units available for
purchase.
(b) Notwithstanding the foregoing, the Depositor may,
in their discretion at any time, decide not to offer Trust
Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive reimbursement from
the Trust for any and all expenses and disbursements to the
same extent as the Trustee is permitted reimbursement
hereunder."
S. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total principal
amount of Securities deposited in such Trust, or (ii)"
T. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
U. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
V. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not exceed
that amount as set forth in the Prospectus per Unit
outstanding as of January 1 of such year except for a Trust
during the year or years in which an initial offering period
as determined in Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Portfolio
Supervisor provides services during less than the whole of
such year), but in no event shall such compensation when
combined with all compensation received from other series of
the Trust for providing such supervisory services in any
calendar year exceed the aggregate cost to the Portfolio
Supervisor for the cost of providing such services."
W. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
X. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute any
Letter(s) of Credit deposited with the Trustee in connection
with the deposits described in Section 2.01(a) and (b) with
cash in an amount sufficient to satisfy the obligations to
which the Letter(s) of Credit relates. Any substituted
Letter(s) of Credit shall be released by the Trustee."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Thomas Porrazzo
Vice President
[SEAL]
ATTEST:
Rosalia A. Raviele
Second Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 153
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
August 1, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 153
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 153 in connection with the preparation, execution
and delivery of a Trust Agreement dated August 1, 1996 among
Nike Securities L.P., as Depositor, The Chase Manhattan Bank, as
Trustee and First Trust Advisors L.P. as Evaluator and Portfolio
Supervisor, pursuant to which the Depositor has delivered to and
deposited the Securities listed in Schedule A to the Trust
Agreement with the Trustee and pursuant to which the Trustee has
issued to or on the order of the Depositor a certificate or
certificates representing units of fractional undivided interest
in and ownership of the Fund created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-07825)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
August 1, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 153
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 153 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trusts of said Fund (the "Trusts" and
each a "Trust"), under a Trust Agreement, dated August 1, 1996
(the "Indenture"), among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by the Trusts from proceeds of subsequent deposits,
if any, will be made, in accordance with the terms of the
Indenture. The Trusts holds Equity Securities as such term is
defined in the Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. Each Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of a Trust under the Internal Revenue Code of 1986 (the
"Code"); the income of such Trust will be treated as income of
the Unit holders thereof under the Code; and an item of Trust
income will have the same character in the hands of a Unit holder
as it would have in the hands of the Trustee. Each Unit holder
will be considered to have received his pro rata share of income
derived from each Trust asset when such income is received by the
Trust.
II. Each Unit holder will have a taxable event when a Trust
disposes of an Equity Security (whether by sale, exchange,
liquidation, redemption, or otherwise) or upon the sale or
redemption of Units by such Unit holder. The price a Unit holder
pays for his Units is allocated among his pro rata portion of
each Equity Security held by such Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases
his Units) in order to determine his tax basis for his pro rata
portion of each Equity Security held by such Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a
corporation with respect to an Equity Security held by a Trust
are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." A
Unit holder's pro rata portion of dividends paid on such Equity
Security which exceeds such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such
Equity Security, and to the extent that such dividends exceed a
Unit holder's tax basis in such Equity Security shall be treated
as capital gain. In general, any such capital gain will be short
term unless a Unit holder has held his Units for more than one
year.
III. A Unit holder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Equity Securities
held by a Trust will generally be considered a capital gain
except in the case of a dealer or a financial institution and
will be generally long-term if the Unit holder has held his Units
for more than one year. A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of Equity
Securities held by a Trust will generally be considered a capital
loss (except in the case of a dealer or a financial institution)
and will be generally long-term if the Unit holder has held his
Units for more than one year. Unit holders should consult their
tax advisers regarding the recognition of gains and losses for
Federal Income tax purposes. In particular, a Rollover Unit
holder should be aware that a Rollover Unit holder's loss, if
any, incurred in connection with the exchange of Units for Units
in the next new series of the Target Equity Trust, Value Ten
Series or Target Equity Trust, Value Five Series (the "1997
Trusts") will generally be disallowed with respect to the
disposition of any Equity Securities pursuant to such exchange to
the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions
of the Code taking into account such Unit holder's deemed
ownership of securities underlying the Units in a 1997 Trust in
the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before
and ending 30 days after such disposition. However, any gains
incurred in connection with such an exchange by a Rollover Unit
holder would be recognized.
Each Unit holder's pro rata share of each expense paid by a
Trust is deductible by the Unit holder to the same extent as
though the expense had been paid directly by him, subject to the
following limitation. It should be noted that as a result of the
Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation
fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's
adjusted gross income. Unit holders may be required to treat
some or all of the expenses of the Trust as miscellaneous
itemized deductions subject to this limitation.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-07825)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
August 1, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 153
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 153
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
153 (each, a "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated November 20, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator, First
Trust Advisors L.P., as Portfolio Supervisor, and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the
terms of the Indenture, units of fractional undivided interest in
the Trust (the "Units") will be issued in the aggregate number
set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-07825) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit-holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
August 1, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 153
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 153
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor; and Chase, as Trustee (the "Trustee"),
establishing The First Trust Special Situations Trust, Series 153
(each, a "Trust"), and the execution by Chase, as Trustee under
the Indenture, of a certificate or certificates evidencing
ownership of units (such certificate or certificates and such
aggregate units being herein called "Certificates" and "Units"),
each of which represents an undivided interest in the respective
Trust which consists of common stocks (including confirmations of
contracts for the purchase of certain stocks and bonds not
delivered and cash, cash equivalents or an irrevocable letter of
credit or a combination thereof, in the amount required for such
purchase upon the receipt of such stocks and bonds), such stocks
and bonds being defined in the Indenture as Securities and listed
in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a trust company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has duly executed and delivered to
or upon the order of the Depositor a Certificate or Certificates
evidencing ownership of the Units, registered in the name of the
Depositor. Upon receipt of confirmation of the effectiveness of
the registration statement for the sale of the Units filed with
the Securities and Exchange Commission under the Securities Act
of 1933, the Trustee may deliver such other Certificates, in such
names and denominations as the Depositor may request, to or upon
the order of the Depositor as provided in the Closing Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and may be
reimbursed, without interest, for any such advances from funds in
the interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
August 1, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 153
Gentlemen:
We have examined the Registration Statement File No.
333-07825 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Vice President
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