. Registration No. 333-23615
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 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 195
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: $0.00
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 June 12, 1997 at 2:00 p.m. pursuant to Rule
487.
________________________________
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 195
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 securities *
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.
First Trust (registered trademark)
Target 25 Trust, June 1997 Series
The Trust. The First Trust (registered trademark) Special Situations
Trust, Series 195 (Target 25 Trust, June 1997 Series) is a unit
investment trust consisting of a portfolio of common stocks selected
from a pre-screened subset of the stocks listed on the New York Stock
Exchange as of two business days prior to the Initial Date of Deposit
(the "Equity Securities").
The objective of the Trust is to provide potential capital appreciation
and dividend income by investing the Trust's portfolio in the Equity
Securities. See "Schedule of Investments." The Trust has a mandatory
termination date (the "Mandatory Termination Date" or "Trust Ending
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 the Trust will be achieved.
Each Unit of the Trust represents an undivided fractional interest in
all the Equity Securities deposited in the Trust. The Equity Securities
deposited in the Trust's portfolio have no fixed maturity date and the
value of these underlying Equity Securities will fluctuate with changes
in the values of stocks in general but may decline more than or not
increase as much as stocks in general. See "Portfolio."
The Sponsor may, from time to time after the Initial Date of Deposit,
deposit additional Equity Securities in the Trust or cash (including a
letter of credit) with instructions to purchase additional Equity
Securities in the Trust. Such deposits of additional Equity Securities
or cash will, therefore, be done in such a manner that the original
proportionate relationship among the number of shares of the individual
issues of the Equity Securities shall be maintained. 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 share relationship
established on the Initial Date of Deposit, and not the actual
proportionate share relationship on the subsequent date of deposit,
because the two may differ. Any such difference may be due to the sale,
redemption or liquidation of any of the Equity Securities deposited in
the Trust on the Initial, or any subsequent, Date of Deposit. Moreover,
because of fluctuations in the price of the Equity Securities, the
proportionate value relationship among the Equity Securities on any
subsequent date of deposit will probably be different from that
established on the Initial Date of Deposit. See "What is the First Trust
Special Situations Trust?" and "How May Equity Securities be Removed
from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
is equal to the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of the Equity
Securities) plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust, plus an initial sales charge
equal to the difference between the maximum sales charge (2.75% of the
Public Offering Price) and the maximum remaining deferred sales charge
(initially $.175 per Unit). Commencing July 31, 1997, and on the last
business day of each month thereafter, through April 30, 1998, a
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 June 12, 1997
Page 1
deferred sales charge of $.0175 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 2.75% of the Public Offering Price (equivalent to
2.778% of the net amount invested, exclusive of the deferred sales
charge). A pro rata share of accumulated dividends, if any, in the
Income Account is included in the Public Offering Price. The minimum
amount which an investor may purchase in the Trust is $1,000. The sales
charge for the Trust is reduced on a graduated scale for sales involving
at least $50,000. See "How is the Public Offering Price Determined?"
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
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 on
a per Unit basis was $.2217. This estimate will vary with changes in the
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 the Trust
will be paid on December 31, 1997 to Unit holders of record on December
15, 1997, 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 the Trust. See "What is the Federal Tax Status of
Unit Holders?" Additionally, upon termination of the Trust, the Trustee
will distribute, upon surrender of Units, to each remaining Unit holder
(other than a Rollover Unit holder as defined below) his or her pro rata
share of the Trust's assets, less expenses, in the manner set forth
under "Rights of Unit Holders-How are Income and Capital Distributed?"
For distributions to Rollover Unit holders, see "Special Redemption,
Liquidation and Investment in a New Trust." Any Unit holder may elect to
have each distribution of income or capital on his or her Units, other
than the final liquidating distribution, automatically reinvested in
additional Units of the Trust subject only to remaining deferred sales
charge payments. See "Rights of Unit Holders-How are Income and Capital
Distributed?"
Secondary Market for Units. While under no obligation to do so, the
Sponsor intends to maintain a market for Units of the Trust and offer to
repurchase such Units at prices which are based on the aggregate
underlying value of Equity Securities in the Trust (generally determined
by the closing sale prices of the Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. If a secondary
market is not maintained, a Unit holder may redeem Units through
redemption at prices based upon the aggregate underlying value of the
Equity Securities in the Trust (generally determined by the closing sale
prices of the Equity Securities) plus or minus a pro rata share of cash,
if any, in the Capital and Income Accounts of the Trust. Units 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. A
Unit holder tendering 2,500 Units or more Units of the Trust for
redemption may request a distribution of shares of Equity Securities
(reduced by customary transfer and registration charges) in lieu of
payment in cash. See "How May Units be Redeemed?"
Special Redemption, Liquidation and Investment in a New Trust. The
Sponsor intends to create a separate 1998 trust (the "1998 Trust") in
conjunction with the termination of this series of the Trust. The
portfolio of the 1998 Trust will contain equity securities of companies
which the Sponsor believes have the potential to provide above-average
capital appreciation and dividend income during 1998. Unit holders who
wish to have the proceeds from their Units invested in the 1998 Trust
must specify by June 1, 1998 (the "Rollover Notification Date") their
intention to become "Rollover Unit holders." Rollover Unit holders'
Units will be redeemed in-kind on the Rollover Notification Date and the
distributed Equity Securities sold by the Trustee, in its capacity as
Distribution Agent, during the Special Redemption and Liquidation
Period. The proceeds of the redemption will then be invested in Units of
the 1998 Trust at a reduced sales charge, if such Trust is offered.
Units purchased other than with redemption proceeds will be subject to
the full sales charge. The Sponsor may stop creating new Units of the
1998 Trust at any time in its sole discretion without regard to whether
Page 2
all the proceeds to be invested have been invested. Cash which has not
been invested on behalf of the Rollover Unit holders in the 1998 Trust
will be distributed at the end of the Special Redemption and Liquidation
Period. The Sponsor, however, anticipates that sufficient Units can be
created, although moneys in the Trust may not be fully invested on the
next business day. Rollover Unit holders will receive credit for the
amount of dividends in the Income Account of the Trust which will be
included in the reinvestment in Units of the 1998 Trust. The exchange
option described above is subject to modification, termination or
suspension.
Termination. The Trust will terminate approximately one year after the
Initial Date of Deposit regardless of market conditions at that time.
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold as prescribed by the Sponsor. The Trustee shall provide
written notice of any termination of the Trust to all Unit holders which
will specify when Unit holders may surrender their certificates for
cancellation and will include with such notice a form to enable Unit
holders to elect a distribution of shares of Equity Securities (reduced
by customary transfer and registration charges) if such Unit holder owns
at least 2,500 Units of the Trust, rather than to receive payment in
cash for such Unit holder's pro rata share of the amounts realized upon
the disposition by the Trustee of Equity Securities. 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.
Unit holders not electing the "Rollover Option" or a distribution of
shares of the Equity Securities will receive a cash distribution within
a reasonable time after the Trust is terminated. See "Rights of Unit
Holders-How are Income and Capital Distributed?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, changes in interest rates or an economic recession. The
Trust's portfolio is not managed and Equity Securities will not be sold
by the Trust regardless of market fluctuations, although some Equity
Securities may be sold under certain limited circumstances. Finally, the
results of ownership of Units will differ from the results of ownership
of the underlying Equity Securities of the Trust for various reasons,
including the timing of the purchase and sale (or redemption) of Units
of the Trust, sales charges and expenses of the Trust and taxes. See
"What are Equity Securities?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-June 12, 1997
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Initial Number of Units (1) 14,994
Fractional Undivided Interest in the Trust per Unit (1) 1/14,994
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 148,440
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.900
Maximum Sales Charge 2.75% of the Public Offering Price per Unit
(2.778% of the net amount invested, exclusive of the deferred sales charge) (3) $ .275
Less Deferred Sales Charge per Unit $ (.175)
Public Offering Price per Unit (3) $ 10.000
Sponsor's Initial Repurchase Price per Unit $ 9.725
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.725
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Cash CUSIP Number 337182 265
Reinvestment CUSIP Number 337182 273
First Settlement Date June 17, 1997
Rollover Notification Date June 1, 1998
Special Redemption and Liquidation Period During the period from June 15, 1998 to June 30, 1998.
Mandatory Termination Date June 30, 1998
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 initial offering period.
Trustee's Annual Fee and Out-of-Pocket
Expenses per Unit Outstanding $.0078 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 (generally 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.
Estimated Annual Amortization of
Organizational and Offering Costs (6) $.0200 per Unit.
Income Distribution Record Date Fifteenth day of December, commencing December 15, 1997.
Income Distribution Date (7) Last day of December, commencing December 31, 1997.
</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 business day prior to the
Initial Date of Deposit.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for the Trust of 2.75% of the Public Offering Price and the
amount of the maximum remaining deferred sales charge (initially $.175
per Unit). Subsequent to the Initial Date of Deposit, the amount of the
initial sales charge will vary with changes in the aggregate underlying
value of the Equity Securities underlying the Trust. In addition to the
initial sales charge, Unit holders of the Trust will pay a deferred
sales charge of $.0175 per Unit per month commencing July 31, 1997 and
on the last business day of each month thereafter through April 30,
1998. 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. These deferred sales charge payments
will be paid from funds in the Capital Account, if sufficient, or from
the periodic sale of Equity Securities. See "Fee Table" and "Public
Offering" for additional information. 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 share relationship among the individual Equity 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?"
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per
Unit.
(6) The Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee but not including the expenses
incurred in the printing of preliminary and final prospectuses, and
expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed one year. See "What are the Expenses and
Charges?" and "Statement of Net Assets." Historically, the sponsors of
unit investment trusts have paid all the costs of establishing such
trusts.
(7) If the 1998 Trust is offered, 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 $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made as
part of the final liquidation distribution.
Page 4
FEE TABLE
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?" Although the Trust
has a term of only approximately 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 the Public Offering Price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of Public Offering Price) 1.75%(b) .175
_______ _______
2.75% $ .275
======= =======
Maximum sales charge per year imposed on
reinvested dividends 1.75%(c) .175
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee, portfolio supervision, bookkeeping, administrative, amortization
of organizational and offering expenses and evaluation fees .326% .0325
Other operating expenses .013% .0013
_______ _______
Total .339% $.0338
======= =======
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years(d) 5 Years(d) 10 Years(d)
______ __________ __________ __________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Target 25 Trust, June 1997 Series
estimated operating expense ratio of .339% and a 5% annual return
on the investment throughout the periods $ 31 $ 74 $120 $246
</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. In addition, while the Trust only has a term of approximately
one year, investors may be able to reinvest their proceeds into a
subsequently offered trust, subject to additional sales charges.
[FN]
______________
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 2.75% and the maximum remaining deferred
sales charge (initially $.175 per Unit) and would exceed 1.00% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $.0175 per month per Unit, irrespective of purchase
or redemption price deducted in each of the ten months during the period
from July 31, 1997 to April 30, 1998. If the Unit price exceeds $10.00
per Unit, the deferred sales charge will be less than 1.75%. If the Unit
price is less than $10.00 per Unit, the deferred sales charge will
exceed 1.75%. Units purchased subsequent to the initial deferred sales
charge payment will be subject to only the Initial Sales Charge and 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?"
(d) 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.
Page 5
TARGET 25 TRUST, JUNE 1997 SERIES
The First Trust Special Situations Trust, Series 195
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 195 (Target 25 Trust,
June 1997 Series) is one of a series of investment companies created by
the Sponsor under the name of The First Trust Special Situations Trust,
all of which are generally similar but each of which is separate and is
designated by a different series number (the "Trust"). The Trust is a
unit investment trust 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, 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 selected
from a pre-screened subset of the stocks listed on the New York Stock
Exchange as of two business days prior to the Initial Date of Deposit
(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 the Trust,
the Trustee delivered to the Sponsor documents evidencing the entire
ownership of the Trust.
The objective of the Trust is to provide for above-average potential
capital appreciation and dividend income through an investment in common
stocks selected from a pre-screened subset of the stocks listed on the
New York Stock Exchange as of two business days prior to the Initial
Date of Deposit. There is, of course, no guarantee that the objective of
the Trust will be achieved.
The Trust consists of a portfolio of 25 common stocks selected through
the following four-step process (the "Strategy"). The first step of the
four-step process begins by selecting all the dividend-paying stocks
listed on the New York Stock Exchange (excluding financial,
transportation and utility stocks, American Depositary Receipts and
Limited Partnerships). Also, any stock included in the Dow Jones
Industrial Average is eliminated. Step two ranks the stocks from highest
to lowest market capitalization, and the 400 highest market cap stocks
are selected. The third step then ranks the 400 stocks from highest to
lowest dividend yield, and the 75 highest dividend-yielding stocks are
chosen. Step four takes these remaining 75 stocks, discards the 50
highest dividend-yielding stocks and the remaining 25 are selected for
the portfolio.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
number of shares of Equity Securities in the Trust's portfolio. See
"What are the Equity Securities Selected for the Target 25 Trust, June
1997 Series?" From time to time following the Initial Date of Deposit,
the Sponsor, pursuant to the Indenture, may deposit additional Equity
Securities in the Trust or cash (including a letter of credit) with
instructions to purchase additional Equity Securities in the Trust, and
Units may be continuously offered for sale to the public by means of
this Prospectus, resulting in a potential increase in the outstanding
number of Units of the Trust. Any deposit by the Sponsor of additional
Equity Securities or cash will duplicate, as nearly as is practicable,
the original proportionate share relationship (subject to appropriate
adjustment in the event of stock splits, stock dividends and the like)
and not the actual proportionate share 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 the Trust on the Initial, or any subsequent,
Date of Deposit. Moreover, because of fluctuations in the price of the
Equity Securities, the proportionate value relationship among the Equity
Securities on any subsequent Date of Deposit will probably be different
from that established on the Initial Date of Deposit. See "How May
Equity Securities be Removed from the 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 the Trust. If the Sponsor
deposits cash, however, existing and new investors may experience a
dilution of their investment and a reduction in their anticipated income
because of fluctuations in the price 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
Page 6
Securities as close to the evaluation time or as close to the evaluation
price as possible. The Trustee may from time to time retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for the Trust with respect to acquiring Equity Securities for the
Trust. In acting in such capacity, the Sponsor or its affiliate will be
held subject to the restrictions under the Investment Company Act of
1940, as amended.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Equity Securities deposited in the
Trust set forth under "Summary of Essential Information." To the extent
that Units of the Trust are redeemed, the aggregate value of the Equity
Securities in the Trust will be reduced and the undivided fractional
interest represented by each outstanding Unit of the Trust will be
increased proportionately. However, if additional Units are issued by
the Trust in connection with the deposit of additional Equity Securities
or cash by the Sponsor, the aggregate value of the Equity Securities in
the Trust will be increased by amounts allocable to additional Units,
and the undivided fractional interest represented by each outstanding
Unit of the Trust will be decreased proportionately. See "How May Units
be Redeemed?" The Trust has a Mandatory Termination Date as set forth
herein under "Summary of Essential Information."
What are the Expenses and Charges?
With the exception of brokerage fees discussed above and bookkeeping and
other administrative services provided to the Trust, for which the
Sponsor will be reimbursed in amounts as set forth under "Summary of
Essential Information," the Sponsor will not receive any fees in
connection with its activities relating to the Trust.
First Trust Advisors L.P., an affiliate of the Sponsor, will receive an
annual supervisory fee, which is not to exceed the amount set forth
under "Summary of Essential Information," for providing portfolio
supervisory services for the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. In providing such supervisory services, the portfolio
Supervisor may purchase research services from a variety of sources
which may include dealers of the Trust.
Subsequent to the initial offering period, First Trust Advisors L.P., in
its capacity as Evaluator for the Trust, will receive a fee as indicated
in the "Summary of Essential Information."
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust an annual fee as set forth in the
"Summary of Essential Information." Such fee will be based upon the
largest aggregate number of Units of the Trust outstanding at any time
during the year. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Indenture, reference is
made to the material set forth under "Rights of Unit Holders."
The Trustee's and the above described fees are payable from the Income
Account of the Trust to the extent funds are available and then from the
Capital Account of the Trust. Since the Trustee has the use of the funds
being held in the Capital and Income Accounts for payment of expenses
and redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to the Trust is expected to result from
the use of these funds.
Each of the above mentioned 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. In addition,
with respect to the fees payable to the Sponsor or an affiliate of the
Sponsor for providing bookkeeping and other administrative services,
supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for the Trust, but at
no time will the total amount received for such services rendered to all
unit investment trusts of which Nike Securities L.P. is the Sponsor in
any calendar year exceed the actual cost to the Sponsor or its affiliate
of supplying such services in such year.
Expenses incurred in establishing the Trust, including costs of
preparing the registration statement, the trust indenture and other
closing documents, registering Units with the Securities and Exchange
Commission and registering or qualifying the Units with the states, the
initial audit of the Trust's portfolio, legal fees, the initial fees and
expenses of the Trustee and any other out-of-pocket expenses, will be
paid by the Trust and charged off over a period not to exceed one year.
Page 7
The following additional charges are or may be incurred by the 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 the Trust and the rights and
interests of the Unit holders; fees of the Trustee for any extraordinary
services performed under the Indenture; indemnification of the Trustee
for any loss, liability or expense incurred by it without negligence,
bad faith or willful misconduct on its part, arising out of or in
connection with its acceptance or administration of the Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee, when
paid or owing to the Trustee, are secured by a lien on the Trust. In
addition, the Trustee is empowered to sell Equity Securities in the
Trust in order to make funds available to pay all these amounts if funds
are not otherwise available in the Income and Capital Accounts of the
Trust. Since the Equity Securities are all common stocks and the income
stream produced by dividend payments, if any, is unpredictable, the
Sponsor cannot provide any assurance that dividends will be sufficient
to meet any or all expenses of the Trust. As described above, if
dividends are insufficient to cover expenses, it is likely that Equity
Securities will have to be sold to meet Trust expenses. These sales may
result in capital gains or losses to Unit holders and may tend to reduce
gains or increase the losses which are ultimately received by the Unit
holders from investing in the Trust. 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, as amended
(the "Code"). Unit holders should consult their tax advisors in
determining the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units in the Trust. For
purposes of the following discussion and opinions, it is assumed that
each Equity Security is equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of the Trust under the
Code; and the income of the Trust will be treated as income of the Unit
holders thereof under the Code.
2. Each Unit holder will be considered to have received all of the
dividends paid on his pro rata portion of each Equity Security when such
dividends are received by the Trust 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 distribution from the
Trust are actually received by the Unit holder or are automatically
reinvested.
3. Each Unit holder will have a taxable event when the 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 (except to the extent an in-kind distribution of stocks
is received by such Unit holder as described below). The price a Unit
holder pays for his Units is allocated among his pro rata portion of
each Equity Security held by the Trust (in proportion to the fair market
values thereof on the valuation date closest to 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 the Trust. It should be
noted that certain legislative proposals have been made which could
affect the calculation of basis for Unit holders holding securities that
are substantially identical to the Equity Securities. Unit holders
should consult their own tax advisors with regard to the calculation of
basis. For Federal income tax purposes, a Unit holder's pro rata portion
of dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to an Equity Security held by the Trust is
taxable as ordinary income to the extent of such corporation's current
and accumulated "earnings and profits." A Unit holder's pro rata portion
Page 8
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 Units for more than one year.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital gain except in the case of
a dealer or a financial institution and, in general, will be long-term
if the Unit holder has held his Units for more than one year (the date
on which the Units are acquired (i.e., the trade date) is excluded for
purposes of determining whether the Units have been held for more than
one year). A Unit holder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital loss (except in the case of
a dealer or a financial institution) and, in general, will be long-term
if the Unit holder has held his Units for more than one year. Unit
holders should consult their tax advisors regarding the recognition of
such capital 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 a new series of the Trust (the "1998 Trust") 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 holders
deemed ownership of the securities underlying the Units in the 1998
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.
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge for the Trust 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
a case, the non-interest portion of the deferred sales charge would be
added to the Unit holder's tax basis in his Units. The deferred sales
charge could cause the Unit holder's Units to be considered to be debt-
financed under Section 246A 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
advisors as to the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by the
Trust (to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such 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 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 advisors with respect to the limitations
on and possible modifications to the dividends received deduction.
Page 9
Limitations on Deductibility of Trust Expenses by Unit Holders. Each
Unit holder's pro rata share of each expense paid by the Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by such Unit holder. 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
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by the Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). For taxpayers other than corporations, net capital
gains (which is defined as net long-term capital gain over net short-
term capital loss for a taxable year) 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 advisors regarding the potential effect of this provision
on their investment in Units.
If the Unit holder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all assets of the Trust
involved including his pro rata portion of all the Equity Securities
represented by the Unit. Legislative proposals have been made that would
treat certain transactions designed to reduce or eliminate risk of loss
and opportunities for gain as constructive sales for purposes of
recognition of gain (but not loss). Unit holders should consult their
own tax advisors with regard to any such constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units or Termination of the Trust. As discussed in "Rights of Unit
Holders-How are Income and Capital Distributed?", under certain
circumstances a Unit holder who owns at least 2,500 Units may request an
In-Kind Distribution upon the redemption of Units or the termination of
the Trust. The Unit holder requesting an In-Kind Distribution will be
liable for expenses related thereto (the "Distribution Expenses") and
the amount of such In-Kind Distribution will be reduced by the amount of
the Distribution Expenses. See "Rights of Unit Holders-How are Income
and Capital Distributed?" As previously discussed, prior to the
redemption of Units or the termination of the Trust, a Unit holder is
considered as owning a pro rata portion of each of the Trust's assets
for Federal income tax purposes. The receipt of an In-Kind Distribution
will result in a Unit holder receiving 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
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 the Trust. However, if a Unit holder
also receives cash in exchange for a fractional share of an Equity
Security held by the Trust, such Unit holder will generally recognize
gain or loss based upon the difference between the amount of cash
received by the Unit holder and his tax basis in such fractional share
of an Equity Security held by the Trust.
Because the Trust will own many 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 the Trust.
The amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by the Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisors in this regard.
Page 10
As discussed in "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 Units for Units of the 1998
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 the 1998 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 advisors.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among the
Equity Securities held in the Trust in accordance with the proportion of
the fair market values of such Equity Securities on the valuation date
nearest the date the Units are purchased in order to determine such Unit
holder's tax basis for his pro rata portion of each Equity Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by the Trust will be reduced to the extent
dividends paid with respect to such Equity Security are received by the
Trust which are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by the Trust to such Unit holder (including amounts
received upon the redemption of Units) will be subject to back-up
withholding. Distributions by the Trust (other than those that are not
treated as United States source income, if any) 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
advisors. At the termination of the Trust, the Trustee will furnish to
each Unit holder a statement containing information relating to the
dividends received by the Trust on the Equity Securities, the gross
proceeds received by the Trust from the disposition of any Equity
Security (resulting from redemption or the sale of any Equity Security)
and the fees and expenses paid by the Trust. The Trustee will also
furnish annual information returns to Unit holders and the Internal
Revenue Service.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trust Suitable for
Retirement Plans?"
The foregoing discussion relates only to the tax treatment of United
States Unit holders ("U.S. Unit holders") with regard to Federal and
certain aspects of New York State and City income taxes. Unit holders
may be subject to taxation in New York or in other jurisdictions and
should consult their own tax advisors in this regard. As used herein,
the term "U.S. Unit holder" means an owner of a Unit in the Trust that
(a) is (i) for United States Federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the
income of which is subject to United States Federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unit holder
in paragraph (a) but whose income from a Unit is effectively connected
with such Unit holder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States
whose income and gain on the Units will be taxable.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
Page 11
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisors
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. Accordingly,
investors considering investing through a retirement plan should
consider doing so with funds already in such plan.
PORTFOLIO
What are Equity Securities?
The Trust will consist of a portfolio of common stocks selected from a
pre-screened subset of the New York Stock Exchange as of two business
days prior to the Initial Date of Deposit. See "What are the Equity
Securities Selected for the Target 25 Trust, June 1997 Series?" for a
general description of the companies.
The following table compares the actual performance of the Standard &
Poor's Industrial Index and the DJIA with the hypothetical performance
of approximately equal amounts invested in each of the common stocks
selected through applying the Strategy described under "What is the
First Trust Special Situations Trust?" (the "Strategy Stocks") (but not
the Target 25 Trust, June 1997 Series) in each of the 20 years listed
below, as of the business day prior to the beginning of each year (and
as of the most recent quarter).
The returns shown in the following table and graph are not guarantees of
future performance and should not be used as a predictor of returns to
be expected in connection with the Trust. Both stock prices (which may
appreciate or depreciate) and dividends (which may be increased, reduced
or eliminated) will affect the returns. The Strategy Stocks
underperformed the S&P Industrial Index and/or the DJIA in certain
years. Accordingly, there can be no assurance that the Trust's Portfolio
will outperform the S&P Industrial Index and/or the DJIA over the life
of the Trust or over consecutive rollover periods, if available.
A holder of Units in the Trust would not necessarily realize as high a
Total Return on an investment in stocks upon which the hypothetical
returns are based for the following reasons: the Total Return figures
shown do not reflect sales charges, commissions, Trust expenses or
taxes; the Trust is established at different times of the year; the
Trust may not be fully invested at all times or equally weighted in all
stocks comprising the Strategy; and Equity Securities are often
purchased or sold at prices different from the closing prices used in
buying and selling Units.
Page 12
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN(2)
Hypothetical
Strategy Total Returns Indices Total Returns
______________________ ___________________________
S&P
Strategy DJIA Industrial
Year Stocks(1) Index(3) Index(3)
____ _________ ________ __________
<S> <C> <C> <C>
1977 -2.28% -12.75% -7.19%
1978 5.37% 2.62% 6.40%
1979 29.70% 10.52% 18.01%
1980 26.53% 21.45% 31.50%
1981 10.31% -3.40% -4.83%
1982 29.99% 25.84% 20.26%
1983 39.70% 25.68% 22.27%
1984 6.33% 1.07% 5.95%
1985 34.00% 32.83% 31.44%
1986 27.39% 26.96% 18.35%
1987 16.23% 6.00% 5.67%
1988 29.52% 15.97% 16.57%
1989 23.24% 31.74% 31.11%
1990 -3.15% -0.61% -3.20%
1991 39.62% 23.99% 30.13%
1992 14.10% 7.37% 7.49%
1993 15.03% 16.74% 9.88%
1994 8.67% 4.94% 1.28%
1995 32.98% 36.47% 37.01%
1996 23.99% 28.58% 22.68%
1997 6.13% 2.63% 2.70%
thru 3/31
</TABLE>
[FN]
____________
(1) Strategy Stocks for any given period were selected by applying the
Strategy to those stocks
(2) Total Return represents the sum of the percentage change in market
value of each group of stocks between the first trading day of a period
and the total dividends paid on each group of stocks during the period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return does not take into
consideration any sales charges, commissions, expenses or taxes. In
addition, 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 20.25 years listed above, the Strategy Stocks achieved
an average annual total return of 19.75% while the DJIA Index achieved
an average annual total return of 14.23% and the S&P Industrial Index
achieved an average annual total return of 14.25%. Although the Trust
seeks to achieve a better performance than the DJIA and the S&P
Industrial Index as a whole, there can be no assurance that the Trust
will achieve a better performance over its one-year life or over
consecutive rollover periods, if available.
(3) "S & P Industrial Index" is a trademark of The McGraw-Hill Companies,
Inc. The Dow Jones Industrial Average or "DJIA Index" is the property of
the Dow Jones & Co., Inc. The Trust is not sponsored, managed, sold or
promoted by either Dow Jones Co., Inc. or The McGraw-Hill Companies,
Inc.; and neither company has participated in the creation of the Trust
nor in the selection of the equity securities included in the Trust.
Page 13
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 hypothetical Strategy
Stocks (but not the Trust), the DJIA Index and the S&P Industrial Index
from January 1, 1977 through March 31, 1997 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, commission,
expenses or taxes. There can be no assurance that the Strategy stocks
will outperform the DJIA Index or the S&P Industrial Index over its one-
year life or over consecutive rollover periods, if available.
Page 14
What are the Equity Securities Selected for the Target 25 Trust, June
1997 Series?
AMP, Inc., headquartered in Harrisburg, Pennsylvania, designs, makes and
sells a broad range of electronic, electrical and electro-optic
connection devices and interconnection systems and connector-intensive
assemblies to original equipment manufacturers, utilities, government
agencies, value-added resellers and others in more than 104 countries.
ASARCO Incorporated, headquartered in New York, New York, produces
nonferrous metals, mainly copper, lead, zinc, silver and molybdenum;
operates mines in the United States, Peru and Mexico; and produces
specialty chemicals and construction aggregates.
Allegheny Teledyne, Inc., headquartered in Pittsburgh, Pennsylvania,
produces specialty materials; commercial and government-related aviation
electronics products; specialty metals for consumer, industrial and
aerospace applications; and industrial and consumer products.
Cooper Industries, Inc., headquartered in Houston, Texas, through
subsidiaries, makes and markets electrical and circuit protection
products; automotive products; and hand tools and chain and clamp
products. The company serves four major markets: industrial,
construction, electrical power and automotive.
Dana Corporation, headquartered in Toledo, Ohio, makes and sells
products and systems for the worldwide vehicular, industrial and off-
highway original equipment markets, and is a major supplier to the
related aftermarkets. The company also provides lease financing.
Echlin Inc., headquartered in Branford, Connecticut, through
subsidiaries, makes parts and supplies used to maintain or improve the
efficiency and safety of motor vehicles. Products include electrical and
ignition parts, hydraulic brake parts, air brake parts, fuel system
parts, clutches and power transmission parts, and steering and
suspension system components.
Federal Signal Corp., headquartered in Oak Brook, Illinois, makes and
supplies public safety, signaling and communications equipment, fire
trucks, emergency and street sweeping vehicles, industrial vacuum
equipment, parking control equipment, custom on-premise signage, carbide
cutting tools, precision punches and related die components.
Genuine Parts Company, headquartered in Atlanta, Georgia, distributes
automotive and industrial replacement parts and office supplies
throughout most of the United States and in western Canada from more
than 1,250 operations.
The BFGoodrich Company, headquartered in Richfield, Ohio, makes and
supplies a broad range of aerospace systems and components and provides
maintenance, repair and overhaul services on aircraft. The company also
makes specialty chemicals, including specialty plastics, sealants,
coatings and adhesives products, and produces chlor-alkali and olefins
products.
Heinz (H.J.) Company, headquartered in Pittsburgh, Pennsylvania, makes,
packages, and sells processed food products, including ketchup and
sauces/condiments, pet food, baby food, frozen meals and snacks, frozen
potatoes and vegetables, soups, and beans and pasta. The company also
provides weight control services and sells food products to foodservice
operators.
Intimate Brands, Inc., headquartered in Columbus, Ohio, sells women's
intimate apparel and related products under the "Victoria's Secret"
name; personal care products under the "Bath and Body Works" name;
lingerie and sleepwear under the "Cacique" name; and personal care
products and gifts under the "Penhaligon's" name. The company also
designs develops, packages and sells cosmetics, fragrances and other
personal care items. The company is majority-owned by The Limited Inc.
The Limited Inc., headquartered in Columbus, Ohio, through subsidiaries,
operates 5,298 stores in the United States under the names "Limited,"
"Express," "Henri Bendel," "Victoria's Secret," "Abercrombie & Fitch,"
"Lerner," "Lane Bryant," "Structure," "Limited Too," "Cacique," "Bath &
Body Works" and "Penhaligon's." The company also operates a mail order
catalogue division and is a contract manufacturer and apparel importer.
The Lubrizol Corporation, headquartered in Wickliffe, Ohio, with its
subsidiaries, develops, produces and sells chemical additives for
automotive and industrial lubricants and functional fluids, fuel
additives and diversified specialty chemical products.
The May Department Stores Company, headquartered in St. Louis, Missouri,
operates 365 department stores in 30 states and Washington D.C. under
the trade names Lord & Taylor, Hecht's, Strawbridge's, Foley's,
Robinsons-May, Kaufmann's, Filene's, Famous-Barr, L.S. Ayres, and Meier
& Frank.
Page 15
The McGraw-Hill Companies, Inc., headquartered in New York, New York,
provides informational products and services for business and industry,
with a focus on such markets as finance, business, education,
construction, computers, communications, medical and health, aerospace
and defense.
Murphy Oil Corporation, headquartered in El Dorado, Arkansas, conducts
integrated oil operations in the United States, Canada, Ecuador, Spain,
and the United Kingdom and sells petroleum products through 958 retail
outlets in the United States, Canada and the United Kingdom.
Nalco Chemical Company, headquartered in Naperville, Illinois, produces
and sells chemicals; technology; services; and systems used in water
treatment, pollution control, energy conservation, electricity
generation, steelmaking, papermaking, commercial building utility
operations, mining and mineral processing and other industrial processes.
National Service Industries, headquartered in Atlanta, Georgia, rents
out bed and table linens, towels, uniforms and specialized garments;
makes fluorescent and high-intensity lighting fixtures, wiring systems,
soaps, detergents, waxes, disinfectants and envelopes; and makes,
installs and maintains insulation products.
The Quaker Oats Company, headquartered in Chicago, Illinois, makes hot
cereals, pancake mixes, syrups and cornmeal; ready-to eat cereals; grain-
based snacks; value-added rice and pasta products; biscuits, cookies and
Gatorade. The company also sells a line of breakfast products to food
service operators.
Shaw Industries, Inc., headquartered in Dalton, Georgia, designs and
makes approximately 2,300 styles of tufted and woven carpet for
residential and commercial use, sold under its own labels, as well as
private labels of certain distributors.
Springs Industries (Class A), headquartered in Fort Mill, South
Carolina, makes and markets textile products, including bedding and bath
products and window treatment products, and fabrics for industrial,
apparel and specialty end uses.
Tenneco Inc., headquartered in Greenwich, Connecticut, makes and sells
automotive exhaust system parts and ride control products; transports
and markets natural gas; makes and sells packaging materials, cartons,
containers and specialty packaging products for consumer and commercial
markets; and constructs and repairs ships.
USX-Marathon Group, headquartered in Pittsburgh,
Pennsylvania and a unit of USX Corporation, explores for, produces,
refines, distributes and markets crude oil, natural gas and petroleum
products.
Vulcan Materials Co., headquartered in Birmingham, Alabama, with its
subsidiaries, produces crushed stone, sand, gravel, rock asphalt,
crushed slag; asphalt paving materials; bagged and bulk pulverized
limestone; and chlorine, muriatic acid, caustic soda, caustic potash,
chlorinated hydrocarbons, anhydrous hydrogen chloride and hydrogen.
Whirlpool Corp., headquartered in Benton Harbor, Michigan, makes and
markets major home appliances, including home laundry appliances, home
refrigeration and room air conditioning equipment and other home
appliances, products and services, and provides financing services.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
Risk Factors. The Trust consists of such of the Equity Securities listed
under "Schedule of Investments" as may continue to be held from time to
time in the Trust and any additional Equity Securities acquired and held
by the Trust pursuant to the provisions of the Trust Agreement together
with cash held in the Income and Capital Accounts. Due to the short
duration of the Trust, there is no guarantee that the Trust's objective
will be achieved or that the Trust will provide for capital appreciation
in excess of the Trust's expenses. 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 the 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.
The Equity Securities selected for the Trust generally share attributes
that have caused them to have lower prices or higher yields relative to
Page 16
other stocks in the New York Stock Exchange. The Equity Securities may,
for example, be experiencing financial difficulty, or be out of favor in
the market because of weak performance, poor earnings forecasts or
negative publicity; or they may be reacting to general market cycles.
There can be no assurance that the market factors that caused the
relatively low prices and high dividend yields of the Equity Securities
will change, that any negative conditions adversely affecting the stock
prices will not deteriorate, that the dividend rates on the Equity
Securities will be maintained or that share prices will not decline
further during the life of the Trust, or that the Equity Securities will
continue to be included in the New York Stock Exchange.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Equity
Securities under certain limited circumstances. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
See "How May Equity Securities be Removed from the Trust?" Equity
Securities, however, will not be sold by the Trust to take advantage of
market fluctuations or changes in anticipated rates of appreciation or
depreciation. In fact, no Equity Security will be sold prior to
termination of the Trust (except to satisfy redemption requests or to
pay expenses and in certain other limited circumstances) even if the
Sponsor comes to believe that such Equity Security no longer has the
potential for capital appreciation, or issues a "sell" recommendation
with respect to such Equity Security.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, the Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of the Trust,
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
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 Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
Page 17
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in the Trust and will
vote such stocks in accordance with the instructions of the Sponsor.
The value of the Equity Securities will fluctuate over the life of the
Trust and may be more or less than the value at the time they were
deposited in the Trust. The Equity Securities may appreciate or
depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the primary offering period of Units of the Trust and
during the Special Redemption and Liquidation Period) and other factors.
Neither the Sponsor nor the Trustee shall 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 the 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
the Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Equity Securities in the Trust and
the issuance of a corresponding number of additional Units. 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.
The Trust consists of the Equity Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) as may continue
to be held from time to time in the Trust and any additional Equity
Securities acquired and held by the Trust pursuant to the provisions of
the Indenture (including provisions with respect to deposits into the
Trust of Equity Securities or cash in connection with the issuance of
additional Units).
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 Trust. 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 Trust.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
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 advisors. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
Page 18
negatively affect the Equity Securities in the Trust 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 Trust. There can be no assurance that future legislation, regulation
or deregulation will not have a material adverse effect on the Trust 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 Trust
(generally determined by the closing sale prices of the Equity
Securities) plus or minus cash, if any, in the Income and Capital
Accounts of such Trust, plus an initial sales charge with respect to the
Trust equal to the difference between the maximum sales charge for the
Trust (2.75% of the Public Offering Price) and the maximum remaining
deferred sales charge (initially $.175 per Unit for the Trust) divided
by the amount of Units of the Trust outstanding. Commencing July 31,
1997, and on the last business day of each month thereafter, through
April 30, 1998, Unit holders will be assessed a deferred sales charge of
$.0175 per Unit per month. 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 2.75% of the Public Offering Price (equivalent to 2.778% of the net
amount invested, exclusive of the deferred sales charge).
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in the
Trust (generally determined by the closing sale prices of the Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding. For secondary market sales after the completion of the
initial offering period, the Public Offering Price is also based on the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of the Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus an initial sales charge (equal to the
difference between the maximum sales charge for the Trust (2.75% of the
Public Offering Price) and the maximum remaining deferred sales charge)
and the remaining deferred sales charge payments, divided by the number
of outstanding Units of the Trust.
The minimum amount an investor may purchase in the Trust is $1,000. The
applicable sales charge of the 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>
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% 2.50% 1.90%
$100,000 but less than $150,000 0.50% 2.25% 1.65%
$150,000 but less than $1,000,000 0.85% 1.90% 1.30%
$1,000,000 or more 1.75% 1.00% 0.50%
</TABLE>
[FN]
*The breakpoint sales charges are also applied on a Unit basis utilizing
a breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
Any such reduced sales charge shall be the responsibility of the selling
dealer. An investor may aggregate purchases of Units of all June 1997
Target Trusts for purposes of qualifying for volume purchase discounts
listed above. The sales charge reduction for quantity purchases will not
apply to Rollover Unit holders. Rollover Unit holders of prior series of
the Trusts may purchase Units of the Trusts subject to a maximum sales
charge of 1.75% of the Public Offering Price (1.00% for rollover
purchases of $1,000,000 or more), deferred as set forth above. The
Page 19
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 the
Trust may utilize their termination proceeds to purchase Units of the
Trust, subject to a deferred sales charge of $.0175 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, related
companies of the Sponsor, dealers and their affiliates and vendors
providing services to the Sponsor 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 or
secondary market at the Public Offering Price, less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Equity Securities. During the initial offering period,
the aggregate value of the Units of the Trust shall be determined on the
basis of the aggregate underlying value of the Equity Securities therein
plus or minus cash, if any, in the Income and Capital Accounts of the
Trust. The aggregate underlying value of the Equity Securities will be
determined in the following manner: since the Equity Securities are
listed on a national securities exchange, this evaluation is generally
based on the closing sale prices on that exchange (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, at the closing
ask prices. If, in the future, 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 the Trust plus the applicable sales
charge. The calculation of the aggregate underlying value of the Equity
Securities for secondary market sales is determined in the same manner
as described above for sales made during the initial offering period
with the exception that bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. 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 20
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 the Trust and create additional Units. Units
reacquired by the Sponsor during the initial offering period (at prices
based upon the aggregate underlying value of the Equity Securities in
the Trust plus or minus a pro rata share of cash, if any in the Income
and Capital Accounts of the Trust) may be resold at the then current
Public Offering Price. Upon the termination of the initial offering
period, unsold Units created or reacquired during the initial offering
period will be sold or resold at the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales will be made to dealers and others at
prices which represent a concession or agency commission of 2.1% of the
Public Offering Price for primary and secondary market sales. Dealers
and others will receive a concession or agency commission of $0.11 per
Unit on purchases by Rollover Unit holders ($0.05 for rollover purchases
of $1,000,000 or more). In addition, dealers and others will receive a
maximum concession of up to $0.10 per Unit on purchases of Units
resulting from the automatic reinvestment of income or capital
distributions into additional Units. Such concession will vary based
upon the month of the Trust's Initial Date of Deposit.
However, resales of Units of the Trust by such dealers and others to the
public will be made at the Public Offering Price described in the
prospectus. The Sponsor reserves the right to
change the amount of the concession or agency commission from time to
time. 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 Trust available to
their customers on an agency basis. A portion of the sales charge paid
by these customers is retained by or remitted to the banks in the
amounts indicated above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are not
permitted under such Act. In Texas and in certain other states, any
banks making Units available must be registered as broker/dealers under
state law.
From time to time the Sponsor may implement programs under which the
dealers of the Trust may receive nominal awards from the Sponsor for
each of their registered representatives who have sold a minimum number
of UIT Units during a specified time period. In addition, at various
times the Sponsor may implement other programs under which the sales
force of the dealers 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 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 the qualifying dealers for
certain services or activities which are primarily intended to result in
sales of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their Units or
the amount that the Trust will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trust and returns over
Page 21
specified periods on other similar Trusts sponsored by Nike Securities
L.P. or investment strategies utilized by the Trust (which may show
performance net of expenses and charges which the Trust would have
charged) with returns on other taxable investments such as the common
stocks comprising the Dow Jones Industrial Average, the S&P 500, the S&P
Industrial Index, other investment indices, corporate or U.S. Government
bonds, bank CDs and money market accounts or money market funds, each of
which has investment characteristics that may differ from those of the
Trust. U.S. Government bonds, for example, are backed by the full faith
and credit of the U.S. Government and bank CDs and money market accounts
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal, but pay
interest at rates that vary with the condition of the short-term debt
market. The investment characteristics of the Trust are described more
fully elsewhere in this Prospectus.
Information on percentage changes in the dollar value of Units, on the
basis of changes in Unit price may be included from time to time in
advertisements, sales literature, reports and other information
furnished to current or prospective Unit holders. Total return figures
are not averaged, and may not reflect deduction of the sales charge,
which would decrease the return. Average annualized return figures
reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance may not be indicative of future results. The Trust's
portfolio is not managed. Unit price and return fluctuate with the value
of the common stocks in the Trust's portfolio, so there may be a gain or
loss when Units are sold.
Trust performance may be compared to performance on a total return basis
of the Dow Jones Industrial Average, the S&P 500 Composite Price Stock
Index, or performance data from Lipper Analytical Services, Inc. and
Morningstar Publications, Inc. or from publications such as Money, The
New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
What are the Sponsor's Profits?
The Sponsor of the Trust will receive a gross sales commission equal to
2.75% of the Public Offering Price of the Units (equivalent to 2.778% of
the net amount invested, exclusive of the deferred sales charge), 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 the 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 subsequent deposits) and the cost of such
Equity Securities to the Sponsor. See Note (2) of "Schedule of
Investments." During the initial offering period, the dealers and other
selling agents also may realize profits or sustain losses as a result of
fluctuations after the Initial Date of Deposit in the Public Offering
Price received by the dealers and other selling agents upon the sale of
Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a sales charge of 2.75%) or redeemed. The
secondary market public offering price of Units may be greater or less
than the cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor intends to maintain a market for the Units and
continuously offer to purchase Units at prices, subject to change at any
time, based upon the aggregate underlying value of the Equity Securities
in the Trust plus or minus cash, if any, in the Income and Capital
Page 22
Accounts of the Trust. All expenses incurred in maintaining a secondary
market, other than the fees of the Evaluator and the costs of the
Trustee in transferring and recording the ownership of Units, will be
borne by the Sponsor. If the supply of Units exceeds demand, or for some
other business reason, the Sponsor may discontinue purchases of Units at
such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS OR HER UNITS, HE
OR SHE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR
TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Units 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 by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his or her 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 (book
entry) form. ONLY UNIT HOLDERS WHO ELECT TO HOLD UNITS IN UNCERTIFICATED
(BOOK ENTRY) 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 the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated (book entry)
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.
Page 23
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in the Trust as part of the final liquidation
distribution. See "Summary of Essential Information." Persons who
purchase Units will commence receiving distributions only after such
person becomes a Record Owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the
normal course of business such notice is provided by the selling
broker/dealer. Proceeds received on the sale of any Equity Securities in
the 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 $0.01 per Unit. The Trustee is not required to pay interest on
funds held in the Capital Account of the Trust (but may itself earn
interest thereon and therefore benefit from the use of such funds).
Notwithstanding, distributions of funds in the Capital Account, if any,
will be made 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. However, 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
the Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder 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 the Trust is terminated, each Unit holder
who is not a Rollover Unit holder will, upon surrender of his or her
Units for redemption, receive (i) the pro rata share of the amounts
realized upon the disposition of Equity Securities, unless he or she
elects an In-Kind Distribution as described under "How May the Indenture
be Amended or Terminated?" and (ii) a pro rata share of any other assets
of the Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.,
return of capital, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
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 the
Trust, automatically reinvested in additional Units of the Trust. Each
person who purchases Units of the 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 the 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.
Page 24
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in 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 the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his or her Units by tender
to the Trustee at its unit investment 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 in 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 the 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 or her 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 the Trust to the extent that funds are
Page 25
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size of the Trust will be and the diversity of
the Trust may 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.
The Redemption Price per Unit will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the Trust. The
Redemption Price per Unit is the pro rata share of each Unit determined
by the Trustee by adding: (1) the cash on hand in the Trust other than
cash deposited in the Trust to purchase 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
the Trust, as determined by the Evaluator on the basis of the aggregate
underlying value of the Equity Securities in the Trust next computed;
and (3) dividends receivable on the Equity Securities trading ex-
dividend as of the date of computation; and deducting therefrom: (1)
amounts representing any applicable taxes or governmental charges
payable out of the Trust; (2) any amounts owing to the Trustee for its
advances; (3) an amount representing estimated accrued expenses of the
Trust, including but not limited to fees and expenses of the Trustee
(including legal fees), the Evaluator and supervisory fees, if any; (4)
cash held for distribution to Unit holders of record of the Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results of
such computation by the number of Units of the Trust outstanding as of
the date thereof. The 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 will be determined in the
following manner: since the Equity Securities are listed on a national
securities exchange, this evaluation is generally based on the closing
sale prices on that exchange (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, at the closing bid prices. If, in the
future, 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
If the 1998 Trust is offered to investors, a special redemption and
liquidation will be made of all Units of the Trust held by any Unit
holder (a "Rollover Unit holder") who affirmatively notifies the Trustee
in writing that he or she desires to participate as a Rollover Unit
holder by the Rollover Notification Date specified in the "Summary of
Essential Information."
All Units of Rollover Unit holders will be redeemed In-Kind during the
Special Redemption and Liquidation Period and the underlying Equity
Securities will be distributed to the Distribution Agent on behalf of
the Rollover Unit holders. During the Special Redemption and Liquidation
Period (as set forth in "Summary of Essential Information"), 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.
Page 26
The Distribution Agent may engage the Sponsor, as its agent, or other
brokers to sell the distributed Equity Securities. The Equity Securities
will be sold as quickly as is practicable during the Special Redemption
and Liquidation Period. The Sponsor does not anticipate that the period
will be longer than ten business days, and it could be as short as one
day, given that the Equity Securities are 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.
It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Equity Securities: for highly
liquid Equity Securities, the Sponsor will generally sell Equity
Securities on the first day of the Special Redemption and Liquidation
Period; for less liquid Equity Securities, on each of the first two days
of the Special Redemption and Liquidation Period, the Sponsor will
generally sell any amount of any underlying Equity Securities at a price
no less than 1/2 of one point under the closing sale price of those
Equity Securities on the preceding day. Thereafter, the Sponsor intends
to sell without any price restrictions at least a portion of the
remaining underlying Equity Securities, the numerator of which is one
and the denominator of which is the total number of days remaining
(including that day) in the Special Redemption and Liquidation Period.
The Rollover Unit holders' proceeds will be invested in the 1998 Trust,
if it is registered and offered for sale. The proceeds of redemption
available on each day will be used to buy 1998 Trust Units as the
proceeds become available at the Public Offering Price of the 1998
Trust, including a reduced sales charge per Unit. Units purchased other
than with redemption proceeds will be subject to the full sales charge.
The Sponsor intends to create 1998 Trust Units as quickly as possible,
dependent upon the availability and reasonably favorable prices of the
equity securities included in the 1998 Trust portfolio, and it is
intended that Rollover Unit holders will be given first priority to
purchase the 1998 Trust Units. There can be no assurance, however, that
the 1998 Trust will be created, or if created, as to the exact timing of
the creation of the 1998 Trust Units or the aggregate number of 1998
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 1998 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 the 1998 Trust may not be fully invested on
the next business day.
Any Rollover Unit holder may thus be redeemed out of the Trust and
become a holder of an entirely different Trust, the 1998 Trust, with a
different portfolio of equity securities. The Rollover Unit holders'
Units will be redeemed In-Kind and the distributed Equity Securities
shall be sold during the Special Redemption and Liquidation Period. In
accordance with the Rollover Unit holders' offer to purchase the 1998
Trust Units, the proceeds of the sales (and any other cash distributed
upon redemption) will be invested in the 1998 Trust, at the public
offering price, including a reduced sales charge per Unit.
This process of redemption, liquidation, and investment in a new Trust
is intended to allow for the fact that the portfolios selected 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 for the 1998 Trust and each subsequent series of the Trust,
approximately a year after that Series' creation. However, there is no
assurance that any such subsequent series of the Trust will be offered.
The Sponsor believes that the gradual redemption, liquidation and
investment in the Trust will help mitigate any negative market price
consequences stemming from the trading of large volumes of securities
and of the underlying Equity Securities in the Trust in a short,
publicized period of time. The above procedures may, however, be
insufficient or unsuccessful in avoiding such price consequences. In
fact, market price trends may make it advantageous to sell or buy more
quickly or more slowly than permitted by these procedures. Rollover Unit
holders could then receive a less favorable average Unit price than if
they bought all their Units of the Trust on any given day of the period.
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 the 1998
Page 27
Trust, no cash would be distributed at that time to pay any taxes.
Included in the cash for the Special Redemption and Liquidation may be
an amount of cash attributable to the distribution of dividend income;
accordingly, Rollover Unit holders also will not have cash 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")
will continue to hold Units of the Trust as described in this Prospectus
until the Trust is terminated or until the Mandatory Termination Date
listed in the Summary of Essential Information, whichever occurs first.
These Remaining Unit holders will not realize capital gains or losses
due to the Special Redemption and Liquidation, and will not be charged
any additional sales charge. If a large percentage of Unit holders
become Rollover Unit holders, the aggregate size of the Trust will be
sharply reduced. As a consequence, expenses, if any, in excess of the
amount to be borne by the Trustee would constitute a higher percentage
amount per Unit than prior to the Special Redemption, Liquidation and
Investment in the 1998 Trust. The Trust might also be reduced below the
Discretionary Liquidation Amount listed in the Summary of Essential
Information because of the lesser number of Units in the Trust, and
possibly also due to a value reduction, however temporary, in Units
caused by the Sponsor's sales of Equity Securities; if so, the Sponsor
could then choose to liquidate the Trust without the consent of the
remaining Unit holders. See "How May the Indenture be Amended or
Terminated?" The Equity Securities remaining in the Trust after the
Special Redemption and Liquidation Period will be sold by the Sponsor as
quickly as possible without, in its judgment, materially adversely
affecting the market price of the Equity Securities.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the 1998 Trust or any subsequent series of the Trust, 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 Period would have commenced. 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 1998 Trust or any subsequent series of the Trust. 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 or she 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 the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee. Their respective 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,
Page 28
that the issuer has defaulted on the payment on any other of its
outstanding obligations, that the price of the Equity Security has
declined to such an extent or other such credit factors exist so that in
the opinion of the Sponsor, the retention of such Equity Securities
would be detrimental to the Trust. Except as stated under "Portfolio-
What are Some Additional Considerations for Investors?" for Failed
Obligations, the acquisition by the Trust of any securities or other
property other than the 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 the Trust, they may be accepted for
deposit in the Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the advice of
the Portfolio Supervisor). Proceeds from the sale of Equity Securities
by the Trustee are credited to the Capital Account of the Trust for
distribution to Unit holders or to meet redemptions. The Trustee may
from time to time retain and pay compensation to the Sponsor (or an
affiliate of the Sponsor) to act as agent for the Trust with respect to
selling Equity Securities from the Trust. In acting in such capacity the
Sponsor or its affiliate will be held subject to the restrictions under
the Investment Company Act of 1940, as amended.
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 the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold. The Sponsor
may consider sales of Units of unit investment trusts which it sponsors
in making recommendations to the Trustee as to the selection of
broker/dealers to execute the Trust's portfolio transactions.
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 (630) 241-4141. As of
December 31, 1996, the total partners' capital of Nike Securities L.P.
was $9,005,203 (audited). (This paragraph relates only to the Sponsor
and not to the Trusts or to any series thereof. The information is
included herein only for the purpose of informing investors as to the
financial responsibility of the Sponsor and its ability to carry out its
contractual obligations. More detailed financial information will be
made available by the Sponsor upon request).
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trust may
Page 29
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
subject to supervision by the Superintendent of Banks of the State of
New York, the Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System.
The Trustee, 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.
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.
Page 30
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
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 the Trust during the primary offering period, or
in the event that Units of the Trust not yet sold aggregating more than
60% of the Units of the Trust are tendered for redemption by a
broker/dealer, including the Sponsor. If the Trust is liquidated because
of the redemption of unsold Units of the Trust by a broker/dealer, the
Sponsor will refund to each purchaser of Units of the Trust the entire
sales charge paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit holders
of the Trust. Within a reasonable period after termination, the Trustee
will follow the procedures set forth under "How are Income and Capital
Distributed?" Also, because of the Special Redemption and Liquidation in
a New Trust, there is a possibility that the Trust may be reduced below
the Discretionary Liquidation Amount and that the Trust could therefore
be terminated at that time before the Mandatory Termination Date of the
Trust.
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of the Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his or her address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date of the Trust the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of the Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business days
prior to the Mandatory Termination Date of the Trust. Qualifying Unit
holders requesting an In-Kind Distribution will receive cash in lieu of
fractional shares of the Equity Securities. A Unit holder receiving an
In-Kind Distribution may, of course, at any time after the Equity
Securities are distributed to him or her by the Trust, sell all or a
portion of the Equity Securities. 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 the Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances
or indemnities provided by the Trust Agreement, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Equity Securities in the Trust
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. The Trustee will
then distribute to each Unit holder his or her 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.
Page 31
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
Page 32
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 195
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 195, comprised of Target 25 Trust, June 1997 Series, as of the
opening of business on June 12, 1997. This statement of net assets is
the responsibility of the Trust's Sponsor. Our responsibility is to
express an opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on June 12, 1997.
An audit also includes assessing the accounting principles used and
significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 195, comprised of Target 25
Trust, June 1997 Series, at the opening of business on June 12, 1997 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 12, 1997
Page 33
Statement of Net Assets
TARGET 25 TRUST, JUNE 1997 SERIES
The First Trust Special Situations Trust, Series 195
At the Opening of Business on the Initial Date of Deposit
June 12, 1997
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $148,440
Organizational and offering costs (3) 50,000
________
198,440
Less accrued organizational and offering costs (3) (50,000)
Less liability for deferred sales charge (4) (2,624)
________
Net assets $145,816
========
Units outstanding 14,994
ANALYSIS OF NET ASSETS
Cost to investors (5) $149,939
Less sales charge (5) (4,123)
________
Net assets $145,816
========
</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 $200,000 issued by The Chase
Manhattan Bank has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity Securities.
(3) The Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed one year from the Initial Date of Deposit. The estimated
organizational and offering costs are based on 2,500,000 Units of the
Trust expected to be issued. To the extent the number of Units issued is
larger or smaller, the estimate will vary.
(4) Represents the amount of mandatory distributions from the Trust
($.175 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on July 31, 1997, and on the last business day of
each month thereafter through April 30, 1998. If Units are redeemed
prior to April 30, 1998, the remaining amount of the deferred sales
charge applicable to such Units will be payable at the time of redemption.
(5) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.75% of the Public Offering Price (equivalent
to 2.778% of the net amount invested, exclusive of the deferred sales
charge) assuming no reduction of sales charge for quantity purchases.
Page 34
Schedule of Investments
TARGET 25 TRUST, JUNE 1997 SERIES
The First Trust Special Situations Trust, Series 195
At the Opening of Business on the Initial Date of Deposit
June 12, 1997
<TABLE>
<CAPTION>
Number Percentage Market Cost of Equity Current
of Ticker Symbol and of Aggregate Value per Securities Dividend
Shares Name of Issuer of Equity Securities (1) Offering Price Share to Trust (2) Yield (3)
______ _______________________________________ ______________ _________ ______________ _________
<C> <S> <C> <C> <C> <C>
146 AMP AMP, Inc. 4.00% $40.625 $ 5,931 2.56%
189 AR ASARCO Incorporated 3.95% 31.000 5,859 2.58%
230 ALT Allegheny Teledyne, Inc. 4.03% 26.000 5,980 2.46%
113 CBE Cooper Industries, Inc. 3.99% 52.375 5,918 2.52%
157 DCN Dana Corporation 3.98% 37.625 5,907 2.66%
175 ECH Echlin Inc. 4.01% 34.000 5,950 2.65%
228 FSS Federal Signal Corp. 4.01% 26.125 5,956 2.56%
174 GPC Genuine Parts Company 4.01% 34.250 5,960 2.80%
131 GR The BFGoodrich Company 4.01% 45.500 5,961 2.42%
134 HNZ Heinz (H.J.) Company 4.02% 44.500 5,963 2.61%
290 IBI Intimate Brands, Inc. 4.00% 20.500 5,945 2.54%
301 LTD The Limited Inc. 4.00% 19.750 5,945 2.43%
156 LZ The Lubrizol Corporation 4.01% 38.125 5,948 2.62%
125 MAY The May Department Stores Company 4.00% 47.500 5,937 2.53%
104 MHP The McGraw-Hill Companies, Inc. 3.98% 56.750 5,902 2.54%
124 MUR Murphy Oil Corporation 3.99% 47.750 5,921 2.72%
155 NLC Nalco Chemical Company 3.97% 38.000 5,890 2.63%
131 NSI National Service Industries 3.98% 45.125 5,911 2.66%
144 OAT The Quaker Oats Company 4.00% 41.250 5,940 2.76%
522 SHX Shaw Industries, Inc. 4.04% 11.500 6,003 2.61%
112 SMI Springs Industries (Class A) 4.00% 53.000 5,936 2.49%
131 TEN Tenneco Inc. 4.03% 45.625 5,977 2.63%
197 MRO USX-Marathon Group 3.98% 30.000 5,910 2.53%
77 VMC Vulcan Materials Co. 3.99% 77.000 5,929 2.44%
113 WHR Whirlpool Corp. 4.02% 52.750 5,961 2.58%
_____ ________
Total Investments 100% $148,440
===== ========
</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 June 11, 1997. The Trust has a mandatory termination date of
June 30, 1998.
(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 $148,440.
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $148,691 and $251, 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 prior to the Initial
Date of Deposit.
Page 35
CONTENTS:
Summary of Essential Information:
Target 25 Trust, June 1997 Series 4
The First Trust Special Situations Trust, Series 195:
What is The First Trust Special Situations Trust? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 8
Why are Investments in the Trust Suitable for
Retirement Plans? 12
Portfolio:
What are Equity Securities? 12
What are the Equity Securities Selected for the
Target 25 Trust, June 1997 Series? 15
What are Some Additional Considerations for
Investors? 16
Risk Factors 16
Public Offering:
How is the Public Offering Price Determined? 19
How are Units Distributed? 21
What are the Sponsor's Profits? 22
Will There be a Secondary Market? 22
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 23
How are Income and Capital Distributed? 24
What Reports will Unit Holders Receive? 25
How May Units be Redeemed? 25
Special Redemption, Liquidation and Investment in
a New Trust 26
How May Units be Purchased by the Sponsor? 28
How May Equity Securities be
Removed from the Trust? 28
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 29
Who is the Trustee? 29
Limitations on Liabilities of Sponsor and Trustee 30
Who is the Evaluator? 30
Other Information:
How May the Indenture be Amended or Terminated? 31
Legal Opinions 31
Experts 32
Report of Independent Auditors 33
Statement of Net Assets 34
Notes to Statement of Net Assets 34
Schedule of Investments 35
___________
When Units of the Trusts are no longer available, or for investors who
will reinvest into subsequent series of the Trusts, this Prospectus may
be used as a preliminary prospectus for a future series; in which case
investors should note the following:
INFORMATION CONTAINED HEREIN IS SUBJECT TO AMENDMENT. A REGISTRATION
STATEMENT RELATING TO SECURITIES OF A FUTURE SERIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS
NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE TRUST
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 25 TRUST, JUNE 1997 SERIES
Nike Securities, L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
June 12, 1997
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
-APPENDIX-
The graph which appears on page 14 represents a comparison between a
$10,000 investment made on January 1, 1977 in those stocks which
comprise the DJIA Index and the S&P Industrial Index and approximately
equal amounts invested in each of the 25 common stocks selected from a
pre-screened subset of the stocks listed on the New York Stock Exchange
as of December 31 of each respective year. The chart indicates that
$10,000 invested on January 1, 1977 in the stocks which comprise the
DJIA Index would on March 31, 1997 be worth $147,931, as opposed to
$148,475 had the $10,000 been invested in the stocks which comprise the
S&P Industrial Index and $384,700 had the $10,000 been invested in the
25 common stocks selected from the pre-screened subset of the stocks
listed on the New York Stock Exchange. 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 195, 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; The First Trust Special Situations Trust, Series 108; The
First Trust Special Situations Trust, Series 119 Target 5 Trust,
Series 2 and Target 10 Trust, Series 8; and The First Trust
Special Situations Trust, Series 190 Biotechnology Growth Trust,
Series 3 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
195, 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 June
12, 1997.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 195
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 ) June 12, 1997
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 June 12, 1997 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-23615) and related Prospectus of The First Trust Special
Situations Trust, Series 195.
ERNST & YOUNG LLP
Chicago, Illinois
June 12, 1997
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 195 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 195
TRUST AGREEMENT
Dated: June 12, 1997
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 25 TRUST, JUNE 1997 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 14,994 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/14,994.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
4.00% AMP, Inc., 3.95% ASARCO Incorporated, 4.03%
Allegheny Teledyne, Inc., 3.99% Cooper Industries,
Inc., 3.98% Dana Corporation, 4.01% Echlin Inc.,
4.01% Federal Signal Corp., 4.01% Genuine Parts
Company, 4.01% The BFGoodrich Company, 4.02% Heinz
(H.J.) Company, 4.00% Intimate Brands, Inc., 4.00%
The Limited Inc., 4.01% The Lubrizol Corporation, 4.00%
The May Department Stores Company, 3.98% The McGraw-Hill
Companies, Inc., 3.99% Murphy Oil Corporation, 3.97% Nalco
Chemical Company, 3.98% National Service Industries,
4.00% The Quaker Oats Company, 4.04% Shaw Industries,
Inc., 4.00% Springs Industries (Class A), 4.03% Tenneco
Inc., 3.98% USX-Marathon Group, 3.99% Vulcan Materials
Co., 4.02% Whirlpool Corp.
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, payable on a
Distribution Date. Such fee may exceed the actual cost of
providing such evaluation services for the Trust, but at no time
will the total amount received for evaluation services rendered
to unit investment trusts of which Nike Securities L.P. is the
sponsor in any calendar year exceed the aggregate cost to the
Evaluator of supplying such services in such year.
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 $.0065 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 June 12,
1997.
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:
(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 purchased 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. Cash represented by a foreign currency shall
be replicated in such currency or, if the Trustee has
entered into a contract for the conversion thereof, in U.S.
dollars in an amount replicating the dollars to be received
on such conversion."
I. Section 2.01(c) of the Standard Terms and
Conditions of Trust is hereby amended by adding the
following at the conclusion thereof:
"If any Contract Obligation requires settlement in
a foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of the
Contract Obligation and cash or a Letter of Credit in U.S.
dollars sufficient to perform such foreign exchange
contact."
J. 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."
K. 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 Capital 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."
L. 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 Capital
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 Capital 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."
M. 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."
N. 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
Capital 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."
O. 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 Income Account or,
to the extent funds are not available in such Account, from
the Capital Account and pay to the Depositor the amount that
it is entitled to receive pursuant to Section 3.14.
P. 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 Income and Capital Accounts on or before the
Distribution Date following the Monthly Record Date on which
such period terminates. The Trustee shall have no liability
to any Certificateholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
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.
Q. 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 (the "Deferred Sales Charge
Payment Dates"), 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 or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (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. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. 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."
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.16:
"Section 3.16. Foreign Currency Exchange. Unless the
Depositor shall otherwise direct, whenever funds are
received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in
respect of a sale of Securities, concurrently with the
contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Trustee shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars
pursuant to the instruction of the Depositor. The Trustee
shall have no liability for any loss or depreciation
resulting from action taken pursuant to such instruction."
S. Article IV, Section 4.01 of the Standard Terms and
Conditions of Trust is hereby amended in the following manner:
1. Section 4.01(b) is hereby amended by deleting that
portion of the first sentence appearing after the colon and
the entire second sentence and replacing them in their
entirety with the following:
"if the Securities are listed on a national
or foreign securities exchange or the NASDAQ
National Market System, such Evaluation shall
generally be based on the closing sale price on
the exchange or system which is the principal
market therefor, which shall be deemed to be the
New York Stock Exchange if the Securities are
listed thereon (unless the Evaluator deems such
price inappropriate as a basis for evaluation), or
if there is no closing sale price on such exchange
or system, at the closing ask prices. If the
Securities are not so listed or, if so listed and
the principal market therefor is other than on an
exchange, the evaluation shall generally be based
on the current ask price on the over-the-counter
market (unless it is determined that these prices
are inappropriate as a basis for evaluation). If
current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of
current ask prices for comparable securities, (b)
by appraising the value of the Securities on the
ask side of the market or (c) any combination of
the above. If such prices are in a currency other
than U.S. dollars, the Evaluation of such Security
shall be converted to U.S. dollars based on
current offering side exchange rates, unless the
Security is in the form of an American Depositary
Share or Receipt, in which case the Evaluations
shall be based upon the U.S. dollar prices in the
market for American Depositary Shares or Receipts
(unless the Evaluator deems such prices
inappropriate as a basis for valuation). As used
herein, the closing sale price is deemed to mean
the most recent closing sale price on the relevant
securities exchange immediately prior to the
Evaluation time."
2. Section 4.01(c) is hereby deleted and
replaced in its entirety with the following:
"(c) After the initial offering period and
both during and after the initial offering period,
for purposes of the Trust Fund Evaluations
required by Section 5.01 in determining Redemption
Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section
4.01(b), on the basis of current bid prices for
Zero Coupon Obligations (if any),the bid side
value of the relevant currency exchange rate
expressed in U.S. dollars and, except in those
cases in which the Equity Securities are listed on
a national or foreign securities exchange or the
NASDAQ National Market System and the closing sale
prices are utilized, on the basis of the current
bid prices of the Equity Securities. In addition,
the Evaluator shall reduce the Evaluation of each
Security by the amount of any liquidation costs
(other than brokerage costs incurred on any
national securities exchange) and any capital
gains or other taxes which would be incurred by
the Trust upon the sale of such Security, such
taxes being computed as if the Security were sold
on the date of the Evaluation."
T. Section 5.01 is hereby amended to add the following at
the conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in a foreign currency
shall be reported to the Evaluator who shall convert the
same to U.S. dollars based on current exchange rates, in the
same manner as provided in Section 4.01(b) or 4.01(c), as
applicable, for the conversion of the valuation of foreign
Equity Securities, and the Evaluator shall report such
conversion with each Evaluation made pursuant to Section
4.01."
U. 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 of the Target 5 Trust or the Target 10
Trust may redeem 2,500 Units or more of either 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 Capital 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."
V. 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 25 Trust
(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 indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
W. 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)"
X. 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."
Y. 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."
Z. 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."
AA. 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."
BB. 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."
CC. Paragraph (e) of Section 6.01 of Article VI of the
Standard Terms and Conditions of Trust is amended to read as
follows:
"(e) (I) Subject to the provisions of subparagraphs
(II) and (III) of this paragraph, the Trustee may employ
agents, sub-custodians, attorneys, accountants and auditors
and shall not be answerable for the default or misconduct of
any such agents, sub-custodians, attorneys, accountants or
auditors if such agents, sub-custodians, attorneys,
accountants or auditors shall have been selected with
reasonable care. The Trustee shall be fully protected in
respect of any action under this Indenture taken or suffered
in good faith by the Trustee in accordance with the opinion
of counsel, which may be counsel to the Depositor acceptable
to the Trustee, provided, however, that this disclaimer of
liability shall not (i) excuse the Trustee from the
responsibilities specified in subparagraph II below or
(ii) limit the obligation of the Trustee to indemnify the
Trust under subparagraph III below. The fees and expenses
charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the
Trust reimbursable from the Income and Capital Accounts of
the affected Trust as set forth in section 6.04 hereof.
(II) The Trustee may place and maintain in the care of
an eligible foreign custodian (which is employed by the
Trustee as a sub-custodian as contemplated by subparagraph
(I) of this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership Income) the Trust's foreign
securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign securities
transactions, provided that the Trustee hereby agrees to
perform all the duties assigned by rule 17f-5 as now in
effect or as it may be amended in the future, to the boards
of management investment companies. The Trustee's duties
under the preceding sentence will not be delegated.
As used in this subparagraph (II),
(1) "foreign securities" include: securities
issued and sold primarily outside the United States by a
foreign government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the government of the United States or by
any state or any political subdivision thereof or by any
agency thereof or by any entity organized under the laws of
the United States or of any state thereof which have been
issued and sold primarily outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for
the central handling of securities or equivalent book
entries which, by appropriate exemptive order issued by the
Securities and Exchange Commission, have been qualified as
eligible foreign custodians for the Trust but only for so
long as such exemptive order continues in effect: Morgan
Guaranty Trust Company of New York, Brussels, Belgium, in
its capacity as operator of the Euroclear System
("Euroclear"), and Central de Livraison de Valeurs
Mobilires, S.A. ("CEDEL").
(b) Any other entity that shall have been
qualified as an eligible foreign custodian for the foreign
securities of the Trust by the Securities and Exchange
Commission by exemptive order, rule or other appropriate
action, commencing on such date as it shall have been so
qualified but only for so long as such exemptive order, rule
or other appropriate action continues in effect.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss occurring as a
result of an eligible foreign custodian's willful
misfeasance, reckless disregard, bad faith, or gross
negligence in performing custodial duties."
DD. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. The expenses incurred in
establishing a Trust, including the cost of the preparation
and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture and
other documents relating to the Trust, printing of
Certificates, Securities and Exchange Commission and state
blue sky registration fees, the costs of the initial
valuation of the portfolio and audit of the Trust, the
initial fees and expenses of the Trustee, and legal and
other out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses, to the
extent not borne by the Depositor, shall be borne by the
Trust. To the extent the funds in the Income and Capital
Accounts of the Trust shall be insufficient to pay the
expenses borne by the Trust specified in this Section 3.01,
the Trustee shall advance out of its own funds and cause to
be deposited and credited to the Income Account such amount
as may be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each Record
Date from funds on hand in the Income Account or, to the
extent funds are not available in such Account, from the
Capital Account, in the amount deemed to have accrued as of
such Record Date as provided in the following sentence (less
prior payments on account of such advances, if any), and the
provisions of Section 6.04 with respect to the reimbursement
of disbursements for Trust expenses, including, without
limitation, the lien in favor of the Trustee therefor and
the authority to sell Securities as needed to fund such
reimbursement, shall apply to the payment of expenses and
the amounts advanced pursuant to this Section. For the
purposes of the preceding sentence and the addition provided
in clause (4) of the first sentence of Section 5.01, the
expenses borne by the Trust pursuant to this Section shall
be deemed to have been paid on the date of the Trust
Agreement and to accrue at a daily rate over the time period
specified for their amortization provided in the Prospectus;
provided, however, that nothing herein shall be deemed to
prevent, and the Trustee shall be entitled to, full
reimbursement for any advances made pursuant to this Section
no later than the termination of the Trust. For purposes of
calculating the accrual of organizational expenses under
this Section 3.01, the Trustee shall rely on the written
estimates of such expenses provided by the Depositor
pursuant to Section 5.01."
EE. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of
Section 5.01 shall be amended by adding the following at the
conclusion thereof: ", plus (4) amounts representing
organizational expenses paid from the Trust less amounts
representing accrued organizational expenses of the Trust,
plus (5) all other assets of the Trust"
(ii) The following shall be added at the end of the
first paragraph of Section 5.01:
Until the Depositor has informed the Trustee that
there will be no further deposits of Additional
Securities pursuant to section 2.01(b), the Depositor
shall provide the Trustee with written estimates of (i)
the total organizational expenses to be borne by the
Trust pursuant to Section 3.01 and (ii) the total
number of Units to be issued in connection with the
initial deposit and all anticipated deposits of
additional Securities. For purposes of calculating the
Trust Fund Evaluation and Unit Value, the Trustee shall
treat all such anticipated expenses as having been paid
and all liabilities therefor as having been incurred,
and all Units as having been issued, in each case on
the date of the Trust Agreement, and, in connection
with each such calculation, shall take into account a
pro rata portion of such expense and liability based on
the actual number of Units issued as of the date of
such calculation. In the event the Trustee is informed
by the Depositor of a revision in its estimate of total
expenses or total Units and upon the conclusion of the
deposit of additional Securities, the Trustee shall
base calculations made thereafter on such revised
estimates or actual expenses, respectively, but such
adjustment shall not affect calculations made prior
thereto and no adjustment shall be made in respect
thereof.
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 195
(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
June 12, 1997
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 195
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 195 in connection with the preparation, execution
and delivery of a Trust Agreement dated June 12, 1997 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. 333-23615)
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:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 12, 1997
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: The First Trust Special Situations Trust, Series 195
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 195 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trusts of said Fund (the "Trust"),
under a Trust Agreement, dated June 12, 1997 (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 Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits,
if any, will be made, in accordance with the terms of the
Indenture. The assets of the Trust will consist of a portfolio
of equity securities (the "Equity Securities") as set forth in
the Prospectus. For purposes of this opinion, it is assumed that
each Equity Security is equity for United States Federal income
tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes but will be governed
by the provisions of subchapter J (relating to Trusts) of Chapter
1, Internal Revenue Code of 1986 (the "Code"); each Unit holder
will be considered the owner of a pro rata portion of each of the
assets of the Trust, in the proportion that the number of Units
held by him bears to the total number of Units outstanding; under
Subpart E, Subchapter J of Chapter 1 of the Code, income of the
Trust will be treated as income of the Unit holders in the
proportion described above; 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 considered to have been received
by the Trust. A Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with
respect to an Equity Security held by the Trust is taxable as
ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unit holder's pro rata
portion of dividends paid on an 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 gain from the sale
or exchange of property.
II. The price a Unit holder pays for his Units generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the valuation date nearest 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 the Trust.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from
the Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unit holder
(subject to various nonrecognition provisions under the Code) and
the amount thereof will be measured by comparing the Unit
holder's aliquot share of the total proceeds from the transaction
with his basis for his fractional interest in the asset disposed
of. Such basis is ascertained by apportioning the tax basis for
his Units (as of the date on which his Units were acquired) among
each of the Trust assets (as of the date on which his Units were
acquired) ratably according to their values as of the valuation
date nearest the date on which he purchased such Units. A Unit
holder's basis in his Units and of his fractional interest in
each Trust asset must be reduced, but not below zero, by the Unit
holder's pro rata portion of dividends with respect to each
Equity Security which are not taxable as ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or
upon the termination of the Trust. As previously discussed,
prior to the redemption of Units or the termination of the Trust,
a Unit holder is considered as owning a pro rata portion of each
of the Trust's assets. The receipt of an in kind
distribution will result in a Unit holder receiving an undivided
interest in whole shares of stock and possibly cash. The
potential federal income tax consequences which may occur under
an in kind distribution with respect to each Equity Security
owned by the Trust will depend upon whether or not a United
States Unit holder receives cash in addition to Equity
Securities. An "Equity Security" for this purpose 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 the Trust. However, if
a Unit holder also receives cash in exchange for a fractional
share of an Equity Security held by the Trust, such Unit holder
will generally recognize gain or loss based upon the difference
between the amount of cash received by the Unit holder and his
tax basis in such fractional share of an Equity Security held by
the Trust. The total amount of taxable gains (or losses)
recognized upon such redemption will generally equal the sum of
the gain (or loss) recognized under the rules described above by
the redeeming Unit holder with respect to each Equity Security
owned by the Trust.
A domestic corporation owning Units in the Trust may be
eligible for the 70% dividends received deduction pursuant to
Section 243(a) of the Code with respect to such Unitholder's pro
rata portion of dividends received by a Trust are attributable to
domestic corporations, subject to the limitations imposed by
Sections 246 and 246A of the Code. It should be noted that
various legislative proposals that would affect the dividend
received deduction have been introduced.
Section 67 of the Code provides that 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.
A Unit holder will recognize taxable gain (or loss) when all
or part of the pro rata interest in an Equity Security is either
sold by the Trust or redeemed or when a Unit holder disposes of
his Units in a taxable transaction, in each case for an amount
greater (or less) than his tax basis therefor.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
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 foreign, 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. 333-23615)
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/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
June 12, 1997
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 195
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 195
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
195 (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. 333-23615) 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
June 12, 1997
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 195
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 195
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 195
(each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "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), such stocks being defined in
the Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued hereunder (the "Certificates"), the
Closing Memorandum dated today's date, 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 registered on the registration
books of the Trust the ownership of the Units by 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 Certificates for such Units, in
such names and denominations as the Depositor may request, to or
upon the order of the Depositor as provided in the Closing
Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and be reimbursed,
without interest, for any such advances from funds in the
interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
June 12, 1997
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 195
Gentlemen:
We have examined the Registration Statement File No.
333-23615 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Vice President
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted
from Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> Target 25 Trust, June 1997 Series
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<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> JUN-12-1997
<PERIOD-START> JUN-12-1997
<PERIOD-END> JUN-12-1997
<INVESTMENTS-AT-COST> 148,440
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