SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 199
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title 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. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
FT 199
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The FT Series
of trust
6. Execution and termination The FT Series; Other
of trust agreement Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The FT Series
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The FT Series
11. Types of securities comprising The FT Series
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The FT Series
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The FT
Series; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The FT Series
by depositor, principal
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The FT Series; Rights of
Unit Holders
17. Withdrawal or redemption The FT Series; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The FT Series;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The FT
Series; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The FT Series
50. Trustee's lien The FT Series
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The FT Series; Rights
agreement with respect of Unit Holders
to selection or elimination
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The FT Series; Rights
substitution or elimination of Unit Holders
of underlying securities
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The FT Series
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED JANUARY 9, 1998
Michigan Growth Trust Series
The Trust. FT 199 (the "Trust") is a unit investment trust consisting of
a portfolio of common stocks issued by companies which are incorporated
or headquartered in the State of Michigan (the "Equity Securities"). Up
to 5% of the Equity Securities included in the Trust may be companies
incorporated or headquartered outside of the State of Michigan, which
may include foreign companies and American Depositary Receipts.
Capitalized words appearing in this prospectus are special terms defined
in this prospectus.
The objective of the Trust is to provide the potential for above-average
capital appreciation by investing the Trust's portfolio in the Equity
Securities. See "Schedule of Investments." 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 Trust has a mandatory termination
date ("Mandatory Termination Date" or "Trust Ending Date") as set forth
under "Summary of Essential Information."
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. See
"Portfolio."
Nike Securities L.P. (the "Sponsor") may, from time to time during a
period of up to approximately 360 days after the Initial Date of Deposit
(the "Initial Offering Period"), create additional Units by depositing
additional Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, into the Trust.
Such deposits of additional Equity Securities or cash will be done in a
manner designed to maintain the original proportionate relationship
amongst the individual issues of the Equity Securities. Any deposit by
the Sponsor of additional Equity Securities, or the purchase of additional
Equity Securities pursuant to a cash deposit, will duplicate, as nearly
as is practicable, the original proportionate relationship established on
the Initial Date of Deposit, not the actual proportionate relationship on
the subsequent Date of Deposit, since the two may differ. Any such difference
may be due to the sale, redemption or liquidation of any Equity Securities
deposited in the Trust on the Initial, or any subsequent, Date of
Deposit. See "What is the FT Series?" and "Rights of Unit Holders-How
May Equity Securities be Removed from the Trust?"
Char BulletUnits of the Trust are not insured by the Federal Deposit
Insurance Corporation (FDIC).
Char BulletUnits of the Trust are not deposits or other obligations of
Old Kent Bank and are not guaranteed by Old Kent Bank.
Char BulletUnits of the Trust are subject to investment risks, including
the possible loss of the principal invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY STATE.
Old Kent Bank Nike Securities, L.P.
Placement Agent Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is , 1998
Page 1
Public Offering Price. The Public Offering Price per Unit of the Trust
during the Initial Offering Period is equal to the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust,
plus a deferred sales charge initially equal to $___ per Unit. This
deferred sales charge will be assessed on a monthly basis over a _____-
month period. Commencing on , 1998, and on the last
business day of each month thereafter, through , 1998, a
deferred sales charge of $ will be assessed per Unit per month.
Units purchased subsequent to the initial deferred sales charge payment
but still during the Initial Offering Period will be charged the amount of
the previously collected deferred sales charge at the time of purchase and
will be subject to the remaining deferred sales charge payments not yet
collected. The deferred sales charge will be paid from funds in the Income
and/or Capital Accounts, 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 $____ per Unit (which on the Initial Date of
Deposit is equivalent to ___% of the Public Offering Price), subject to a
reduction beginning . The total maximum sales charge
which may be assessed to Unit holders on a per Unit basis is % of the
Public Offering Price (equivalent to a maximum of % 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. Upon completion of the deferred
sales charge period, the secondary market Public Offering Price per Unit
for the Trust will not include deferred payments, but will instead
include only a one-time initial sales charge of % of the Public
Offering Price (equivalent to % of the net amount invested). The
minimum amount which an investor may purchase of the Trust is $ .
See "Public Offering-How is the Public Offering Price Determined?"
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 in the Trust) on the Initial Date of Deposit was $
per Unit. The actual net annual dividend distributions per Unit will
vary with changes in fees and expenses of the Trust, with changes in
dividends received and with the sale or liquidation of Equity
Securities; therefore, there is no assurance that the net annual
dividend distributions will be realized in the future.
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trust, net of expenses of the Trust,
will be paid on the Distribution Date to Unit holders of record on the
Record Date as set forth in the "Summary of Essential Information."
Distributions of funds in the Capital Account, if any, will be made at
least annually in December of each year. See "What is the Federal Tax
Status of Unit Holders?" Additionally, upon termination of the Trust,
the Trustee will distribute, upon surrender of Units for redemption, to
each Unit holder his 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?"
Secondary Market for Units. After the Initial Offering Period, 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 listed
Equity Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of the Trust. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the 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 listed Equity
Securities and either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust.
A Unit holder tendering 2,500 Units or more for redemption may request a
distribution of shares of Equity Securities (reduced by customary
transfer and registration charges) (an "In-Kind Distribution") in lieu
of payment in cash. Any deferred sales charge remaining on Units at the
time of their sale or redemption will be collected at that time. See
"Rights of Unit Holders-How May Units be Redeemed?"
Page 2
Termination. Commencing no later than 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 Unit holders which will specify when Unit holders may surrender their
certificates for cancellation and will include a form to enable Unit
holders to elect an In-Kind Distribution if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment in cash
for such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Equity Securities. 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 ten business days prior to the Mandatory Termination Date. Unit
holders not electing a distribution of shares of 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?" and "Other Information-How May the Indenture be Amended or
Terminated?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, volatile interest rates or economic recession. Investors
should also note that the Trust is concentrated in Equity Securities of
companies incorporated or headquartered in the State of Michigan which
may involve greater risk than if the Trust's portfolio was diversified
among companies incorporated or headquartered throughout the United
States of America. 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. 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- , 1998
Placement Agent: Old Kent Bank
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)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Equity Securities per Unit $
Maximum Sales Charge of % of the Public Offering Price per Unit
( % of the net amount invested, exclusive of the deferred sales charge) (3) $
Less Deferred Sales Charge per Unit $ ( )
Public Offering Price per Unit (3) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate
underlying value of Equity Securities) (4) $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number
First Settlement Date , 1998
Mandatory Termination Date
Discretionary Liquidation Amount The Trust may be terminated if the value thereof is less than the lower of
$2,000,000 or 20% of the total value of Equity Securities deposited in the
Trust during the Initial Offering Period.
Trustee's Annual Fee $ per Unit outstanding.
Evaluator's Annual Fee $ per Unit outstanding, payable to an affiliate of the Sponsor.
Evaluations for purposes of sale, purchase or redemption of Units are made
as of the close of trading (generally 4:00 p.m. Eastern time) on the New
York Stock Exchange on each day on which it is open.
Supervisory Fee (5) Maximum of $ per Unit outstanding annually payable to an affiliate
of the Sponsor.
Estimated Annual Amortization of
Organizational and Offering Costs (6) $ per Unit.
Income Distribution Record Date Fifteenth day of each June and December commencing _____, 1998.
Income Distribution Date (7) Last day of each June and December commencing _____, 1998.
____________
<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 or The
Nasdaq Stock Market is valued at the last closing sale price, or if no
such price exists or if the Equity Security is not so listed, at the
closing ask price thereof.
(3) The maximum sales charge consists solely of a deferred sales charge.
The total deferred sales charge amount will equal $____ per Unit, which
will be assessed over a _____-month period. Thus, Unit holders will pay
a deferred sales charge of $_____ per Unit per month commencing and
on the last business day of each month thereafter through .
Subsequent to the Initial Date of Deposit, the amount of the sales
charge as a percentage of the Public Offering Price will vary with
changes in the aggregate underlying value of the Equity Securities in
the Trust. During the initial offering period, Units purchased
subsequent to the initial deferred sales charge payment will be charged
the amount of the previously collected deferred sales charge at the time
of purchase and will be subject to the remaining deferred sales charge
payments not yet collected. These deferred sales charge payments will be
paid from funds in the Income and/or Capital Accounts, if sufficient, or
from the periodic sale of Equity Securities. See "Fee Table" and "Public
Offering" for additional information. Commencing on ,
1998, the secondary market sales charge will not include the deferred
sales charge payments but will instead include only a one-time initial
sales charge of % of the Public Offering Price. 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 the Income Account. The Public Offering
Price as shown reflects the value of the Equity Securities at the
opening of business on the Initial Date of Deposit and establishes the
original proportionate relationship amongst the individual securities.
No sales to investors will be executed at this price. Additional Equity
Securities will be deposited during the day of the Initial Date of
Deposit which will be valued as of 4:00 p.m. Eastern time and sold to
investors at a Public Offering Price per Unit based on this valuation.
(4) See "How May Units be Redeemed?"
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses, currently at a maximum annual rate of $.0028
per Unit.
(6) As is common for mutual funds, 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). Total organizational and offering
expenses will be charged off over a period not to exceed the life of the
Trust (approximately two years). See "What are the Expenses and
Charges?" and "Statement of Net Assets."
(7) Distributions from the Capital Account will be made monthly on the
last day of the month to Unit holders of record on the fifteenth day of
such month if the amount available for distribution equals at least
$0.01 per Unit. Notwithstanding, distributions of funds in the Capital
Account, if any, will be made in December of each year.
</FN>
</TABLE>
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 approximately two years and is a unit investment trust,
rather than a mutual fund, this information is presented to permit a
comparison of fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) %(a) $
Deferred sales charge
(as a percentage of public offering price) %(b)
________ ________
% $
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee % $
Portfolio supervision, bookkeeping, administrative, amortization
of organizational and offering costs and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years
______ ______
<S> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Michigan Growth Trust Series has an estimated operating
expense ratio of % and a % annual return on the investment
throughout the following periods: $ $
_______________
<FN>
(a) There is no initial sales charge assessed on Units.
(b) The actual fee is $ per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing ,
1998 through , 1998. If a Unit holder sells or
redeems Units before all of these deductions have been made, the balance
of the deferred sales charge payments remaining will be deducted from
the sales or redemption proceeds. If the Unit price is less than $10.00
per Unit, the deferred sales charge will exceed ____%. Units purchased
subsequent to the initial deferred sales charge payment will be subject
to the previously collected deferred sales charge payments at the time
of purchase and any remaining deferred sales charge payments not yet
collected.
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. 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 two years,
investors may be able to reinvest their proceeds into a subsequently
offered trust, subject to additional sales charges. For investors who
elect to reinvest their proceeds into a subsequently offered trust, the
actual expenses incurred by such investor would exceed those set forth
above.
</FN>
</TABLE>
Page 5
MICHIGAN GROWTH TRUST SERIES
FT 199
What is the FT Series?
FT 199 is one of a series of investment companies created by the Sponsor
under the name of the FT Series, all of which are generally similar but
each of which is separate and is designated by a different series number
(the "Trust"). The FT Series was formerly known as the First Trust
Special Situations Trust. This Series consists of an underlying separate
unit investment trust designated as: Michigan Growth Trust Series. The
Trust was created under the laws of the State of New York pursuant to a
Trust Agreement (the "Indenture"), dated the Initial Date of Deposit,
with Nike Securities L.P. as Sponsor, The Chase Manhattan Bank as
Trustee and First Trust Advisors L.P. as Portfolio Supervisor and
Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks issued by
companies incorporated or headquartered in the State of Michigan,
together with an irrevocable letter or letters of credit of a financial
institution in an amount at least equal to the purchase price of such
securities. In exchange for the deposit of securities or contracts to
purchase securities in the Trust, the Trustee delivered to the Sponsor
documents evidencing the entire ownership of the Trust.
The objective of the Trust is to provide the potential for above-average
capital appreciation through an investment in equity securities issued by
companies incorporated or headquartered in the State of Michigan (the
"Equity Securities"). Up to 5% of the Equity Securities included in the
Trust may be issued by companies incorporated or headquartered outside
of the State of Michigan, which may include foreign companies and American
Depositary Receipts. There is, however, no assurance that the objective
of the Trust will be achieved.
The Trust is a two-year equity unit investment trust that invests
primarily in Michigan companies, with a majority concentrated in
Western Michigan. Many of these companies also have operations and sales
in other states and in foreign countries. The portfolio's strategy is
value oriented. Attractively-valued stocks with significant growth
prospects were selected to provide potential through prospering companies.
Michigan is a national leader in exporting, thanks to its proximity to
America's major arterial waterways, the Great Lakes. As the nation's
fourth largest exporter, Michigan traded $28.5 billion in goods and
services abroad in 1995 alone.
Unsurpassed in the word for automotive design and manufacturing,
Michigan is known as the "Automobile Capital of the World"-being the
automobile's birthplace 100 years ago. Michigan is home to 56 of the
world's top 100 suppliers, including America's "Big Three" automakers.
Michigan's agricultural industry is second only to California in the
number of cash crops commercially produced, including breakfast cereal,
dry beans, tart cherries and blueberries.
Michigan is also a national leader in office furniture manufacturing,
printing/publishing, information services, wood products, plastics
materials and engineering services.
Finally, Michigan has 3,200 miles of shoreline, more than 11,000 inland
lakes, over 6 million acres of state and national forest with 200-plus
campgrounds and more than 150 waterfalls. Given this, it's not hard to
see why Michigan is a popular vacation spot for many.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of individual Equity Securities in the Trust's portfolio. From
time to time following the Initial Date of Deposit, the Sponsor,
pursuant to the Indenture, may create additional Units by depositing
additional Equity Securities, or cash (including a letter of credit)
with instructions to purchase additional Equity Securities, in the
Trust. Units may be continuously offered for sale to the public by means
of this Prospectus, resulting in a potential increase in the outstanding
number of Units of the Trust. Any deposit by the Sponsor of additional
Equity Securities or cash will duplicate, as nearly as is practicable,
the original proportionate relationship and not the actual proportionate
relationship on the subsequent date of deposit, since the two may
differ. Any such difference may be due to the sale, redemption or
liquidation of any of the Equity Securities deposited in the Trust on
the Initial, or any subsequent, Date of Deposit. See "Rights of Unit
Holders-How May Equity Securities be Removed from the Trust?" The
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original percentage relationship of each Equity Security to the Trust is
set forth herein under "Schedule of Investments." 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 and
because the Trust will pay the brokerage fees associated with acquiring
the Equity Securities. To minimize this effect, the Trust will try to
purchase the Equity Securities as close to the evaluation time or as
close to the evaluation price as possible. 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 as 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 increase.
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 fractional undivided
interest represented by each Unit of the Trust will be decreased
proportionately. See "Rights of Unit Holders-How May Units be Redeemed?"
What are the Expenses and Charges?
With the exception of the 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. Certain of the
expenses incurred in establishing the Trust, including the cost of the
initial preparation of documents relating to the Trust, Federal and
state securities registration fees, the initial fees and expenses of the
Trustee, legal expenses and any other out-of-pocket expenses may be paid
by the Sponsor, and may, in part, be paid by the Trustee.
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 underwriters or 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 "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, refer to the material
set forth under "Rights of Unit Holders."
The fees described under this heading ("What are the Expenses and
Charges?") 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,
Page 7
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.
All or a portion of the 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 the life
of the Trust (approximately two years). The following additional charges
are or may be incurred by the Trust: all legal and annual auditing
expenses of the Trustee incurred by or in connection with its
responsibilities under the Indenture; the expenses and costs of any
action undertaken by the Trustee to protect the Trust and the rights and
interests of the Unit holders; fees of the Trustee for any extraordinary
services performed under the Indenture; indemnification of the Trustee
for any loss, liability or expense incurred by it without negligence,
bad faith or willful misconduct on its part, arising out of or in
connection with its acceptance or administration of the Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of the Trust; all taxes and other government charges
imposed upon the Equity 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 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. See "What is the Federal Tax
Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor so
long as the Sponsor is making a secondary market for the Units. The
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.0050 per Unit. Unit holders of the Trust may obtain
a copy of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
This is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of
Section 1221 of the Internal Revenue Code of 1986 (the "Code"). Unit
holders should consult their tax advisers in determining the Federal,
state, local and any other tax consequences of the purchase, ownership
and disposition of Units in the Trust. For purposes of the following
discussion and opinion, 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. Each Unit holder will be considered to
have received his pro rata share of the income derived from each Equity
Security when such income is considered to be received by the Trust.
2. Each Unit holder will be considered to have received all of the
dividends paid on his or her pro rata portion of each Equity Security
when such dividends are received by the Trust regardless of whether such
dividends are used to pay a portion of the deferred sales charge or
other expenses payable from Trust income. Unit holders will be taxed in
Page 8
this manner regardless of whether distributions from the Trust are
actually received by the Unit holder.
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 is
received by such Unit holder as described below). The price a Unit
holder pays for his or her Units is allocated among his or her 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 or her Units) in order to determine his or her
tax basis for his or her pro rata portion of each Equity Security held
by 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 advisers with
regard to 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 of dividends paid on such Equity Security
which exceed such current and accumulated earnings and profits will
first reduce a Unit holder's tax basis in such Equity Security, and to
the extent that such dividends exceed a Unit holder's tax basis in such
Equity Security shall generally be treated as capital gain. In general,
the holding period for such capital gain will be determined by the
period of time a Unit holder has held his or her Units.
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). 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). Unit holders should consult their tax advisers regarding
the recognition of such capital gains and losses for Federal income tax
purposes.
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 or her 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 advisers 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.
Page 9
To the extent that dividends received by the Trust are attributable to
foreign corporations, a corporation that owns Units will not be entitled
to the dividends received deduction with respect to its pro rata portion
of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of the Trust's 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.
Unit holders should consult with their tax advisers regarding the
limitations on the deductibility of Trust expenses.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by the Trust or if the Unit holder disposes of a Unit. For taxpayers
other than corporations, net capital gains (which are defined as net
long-term capital gain over net short-term capital loss for the taxable
year) are subject to a maximum marginal stated tax rate of either 28% or
20%, depending upon the holding period of the capital assets. Capital
loss is long-term if the holding period for the asset is more than one
year, and is short-term if the holding period for the asset is one year
or less. Generally, capital gains realized from assets held for more
than one year but not more than 18 months are taxed at a maximum
marginal stated tax rate of 28% and capital gains realized from assets
(with certain exclusions) held for more than 18 months are taxed at a
maximum marginal stated tax rate of 20% (10% in the case of certain
taxpayers in the lowest tax bracket). Further, capital gains realized
from assets held for one year or less are taxed at the same rates as
ordinary income. Legislation is currently pending that provides the
appropriate methodology that should be applied in netting the realized
capital gains and losses. Such legislation is proposed to be effective
retroactively for tax years ending after May 6, 1997. The date on which
a Unit is acquired (i.e., the "trade date") is excluded for purposes of
determining the holding period of the Unit. It should be noted that
legislative proposals are introduced from time to time that effect tax
rates and could affect relative differences at which ordinary income and
capital gains are taxed.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transaction" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of its Units, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of
the Trust involved, including his or her pro rata portion of all the
Equity Securities represented by the Unit. The Taxpayer Relief Act of
1997 (the "1997 Act") includes provisions that treat certain
transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures or forward contracts, or similar transactions) as
constructive sales for purposes of recognition of gain (but not loss)
and for purposes of determining the holding period. 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 of the Trust
may request an In-Kind Distribution upon the redemption of Units or the
Page 10
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 may wish to request an In-Kind
Distribution are advised to consult their tax advisers in this regard.
Computation of the Unit Holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in the Trust in accordance
with the proportion of the fair market values of such Equity Securities
as of the valuation date nearest the date the Units are purchased in
order to determine such Unit holder's tax basis for his or her pro rata
portion of each Equity Security.
A Unit holder's tax basis in his Units and his or her 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 in the
paragraph designated as "3." 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
advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unit holders and derived from dividends of foreign corporations will not
be subject to U.S. withholding tax provided that less than 25 percent of
the gross income of the foreign corporation for a three-year period
ending with the close of its taxable year preceding payment was not
effectively connected to the conduct of a trade or business within the
United States. In addition, such earnings may be exempt from U.S.
withholding pursuant to a specific treaty between the United States and
a foreign country. Non-U.S. Unit holders should consult their own tax
advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unit holders should consult their tax
advisers regarding the potential tax consequences relating to the
payment of any such withholding taxes by the Trust. Any dividends
withheld as a result thereof will nevertheless be treated as income to
the Unit holders. Because, under the grantor trust rules, an investor is
deemed to have paid directly his share of foreign taxes that have been
paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for U.S. income tax purposes with respect to such
taxes. The 1997 Tax Act imposes a required holding period for such
Page 11
credits. Investors should consult their tax advisers with respect to
foreign withholding taxes and foreign tax credits.
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 of 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 to the Internal Revenue
Service.
Unit holders will be notified annually of the amounts of dividends
includable in the Unit holder's gross income and amounts of Trust
expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Are Investments in the Trust Eligible for
Retirement Plans?"
The foregoing discussion relates only to the tax treatment of United
States Unit holders ("U.S. Unit holders") with regard to United States
Federal income taxes; Unit holders may be subject to foreign, state and
local taxation. 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. Unit holders should consult their tax advisers regarding
potential state or local taxation with respect to the Units.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of such Trusts will be treated as the income
of the Unit holders thereof.
Are Investments in the Trust Eligible for Retirement Plans?
Units of the Trust are eligible for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans. Generally, the Federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are the Equity Securities?
The Trust consists of different issues of Equity Securities primarily
issued by companies incorporated or headquartered in the State of Michigan
which issues are listed on a national securities exchange, The Nasdaq Stock
Market or are traded in the over-the-counter market. Many of these
companies also have operations and sales in other states and in foreign
countries. See "What are the Equity Securities Selected for the Michigan
Growth Trust Series?" for a general description of the companies.
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. 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
Page 12
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.
An investment in Units of the Trust should be made with an understanding
of the problems and risks inherent in an investment in common stock of
companies which are incorporated or headquartered in the State of
Michigan. While many of the companies included in the Trust conduct
business on a national or global scale, to a certain extent, their
results of operations and stock performance are tied to Michigan's
economy. The principal sectors of Michigan's economy are manufacturing
of durable goods (including automobile and office equipment
manufacturing), tourism and agriculture. As reflected in historical
employment figures, Michigan's economy has lessened its dependence upon
durable goods manufacturing. However, manufacturing (including auto-
related manufacturing) continues to be an important part of Michigan's
economy. These industries are subject to increasing global competition
and are highly cyclical. A downturn in these industries could have an
adverse impact on the economy of both the State of Michigan and the
United States of America as a whole.
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 or keep 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.
Whether or not the Equity Securities are listed on a national securities
exchange or The Nasdaq Stock Market, 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 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 they have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent a repayment 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 and/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.
Page 13
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends,
and any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Certain of the Equity Securities in the Trust are in ADR or GDR form.
ADRs, which evidence American Depositary Receipts and GDRs, which
evidence Global Depositary Receipts, represent common stock deposited
with a custodian in a depositary. American Depositary Shares and Global
Depositary Shares (collectively, the "Depositary Receipts") are issued
by a bank or trust company to evidence ownership of underlying
securities issued by a foreign corporation. These instruments may not
necessarily be denominated in the same currency as the securities into
which they may be converted. For purposes of the discussion herein, the
terms ADR and GDR generally include American Depositary Shares and
Global Depositary Shares, respectively.
Depositary Receipts may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the
request of market makers and acts as agent for the Depositary Receipts
holder, while the company itself is not involved in the transaction. In
a sponsored facility, the issuing company initiates the facility and
agrees to pay certain administrative and shareholder-related expenses.
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary;
unsponsored facilities involve several depositaries with no contractual
relationship to the company. The depositary bank that issues Depositary
Receipts generally charges a fee, based on the price of the Depositary
Receipts, upon issuance and cancellation of the Depositary Receipts.
This fee would be in addition to the brokerage commissions paid upon the
acquisition or surrender of the security. In addition, the depositary
bank incurs expenses in connection with the conversion of dividends or
other cash distributions paid in local currency into U.S. dollars and
such expenses are deducted from the amount of the dividend or
distribution paid to holders, resulting in a lower payout per underlying
shares represented by the Depositary Receipts than would be the case if
the underlying share were held directly. Certain tax considerations,
including tax rate differentials and withholding requirements, arising
from applications of the tax laws of one nation to nationals of another
and from certain practices in the Depositary Receipts market may also
exist with respect to certain Depositary Receipts. In varying degrees,
any or all of these factors may affect the value of the Depositary
Receipts compared with the value of the underlying shares in the local
market. In addition, the rights of holders of Depositary Receipts may be
different than those of holders of the underlying shares, and the market
for Depositary Receipts may be less liquid than that for the underlying
shares. Depositary Receipts are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements
of the Securities Exchange Act of 1934.
For the Equity Securities that are Depositary Receipts, currency
fluctuations will affect the U.S. dollar equivalent of the local
currency price of the underlying domestic share and, as a result, are
likely to affect the value of the Depositary Receipts and consequently
the value of the Equity Securities. The foreign issuers of securities
that are Depositary Receipts may pay dividends in foreign currencies
which must be converted into dollars. Most foreign currencies have
fluctuated widely in value against the United States dollar for many
reasons, including supply and demand of the respective currency, the
soundness of the world economy and the strength of the respective
economy as compared to the economies of the United States of America and
other countries. Therefore, for any securities of issuers (whether or
not they are in Depositary Receipt form) whose earnings are stated in
foreign currencies, or which pay dividends in foreign currencies or
which are traded in foreign currencies, there is a risk that their
United States dollar value will vary with fluctuations in the United
States dollar foreign exchange rates for the relevant currencies.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio. In addition, Unit holders 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.
Page 14
Investors should note that because the Placement Agent or its affiliated
companies use the list of Equity Securities which comprises the
portfolio in its independent capacity as an investment advisor to
individuals, employee benefit plans and other institutions and persons
and distributes this information to various individuals and entities,
the Placement Agent or its affiliated companies may recommend or effect
from time to time the purchase or sale of one or more of the Equity
Securities. This may have an effect on the prices of the Equity
Securities which is adverse to the interests of the purchasers of Units
of the Trust. Additionally, this may have an impact on the price paid by
the Trust for the Equity Securities as well as the price received upon
redemption of the Units or upon the termination of the Trust. Investors
should also note that Equity Securities will not be removed from the
Trust and additional Units of the Trust may be created even if the
Placement Agent or its affiliated companies no longer believe certain or
all of the Equity Securities have the potential to provide capital
appreciation over the life of the Trust or if they issue a sell
recommendation to their customers regarding any of the Equity Securities
included in the Trust.
The Placement Agent in its general banking business, or the Placement
Agent's subsidiary in its brokerage business, may act as agent for its
customers in connection with their purchase and sale of equity
securities, including the Equity Securities in the Trust. The Placement
Agent or its affiliated companies also from time to time may issue
reports on and make recommendations relating to equity securities, which
may include the Equity Securities. In addition, certain officers or
directors of the Placement Agent or its affiliated companies may act as
directors of certain of the Equity Securities contained in the Trust.
The parent company of the Placement Agent, Old Kent Financial
Corporation, is among the Equity Securities.
What are the Equity Securities Selected for the Michigan Growth Trust
Series?
Amway Asia Pacific, Ltd., headquartered in Causeway Bay, Hong Kong,
operates as the exclusive distribution vehicle for Amway Corporation in
Australia, Brunei, People's Republic of China, Hong Kong, Macau,
Malaysia, New Zealand, Taiwan and Thailand. The company offers personal
care, home care, home technology and health and fitness products.
Amway Japan Limited (ADR), headquartered in Tokyo, Japan, a direct
selling concern, distributes approximately 140 consumer products in four
core product lines which include personal care, housewares, nutrition
and home care. The company is the exclusive distribution vehicle in
Japan for Amway Corporation. Many products are formulated exclusively
for the company for the Japanese market. Products are distributed
through a nationwide network of independent distributors who renew their
distributorships from year to year.
Arbor Drugs, Inc., headquartered in Troy, Michigan, operates over 180
drugstores in Michigan which offer a broad selection of nationally
advertised and private label brand products.
Autocam Corporation, headquartered in Kentwood, Michigan, designs and
makes close tolerance, specialty metal alloy components that are sold to
the automotive, computer electronics, and medical instrument industries
for use in automotive fuel systems, computer hard disk drives, surgical
instruments and anti-lock brake systems.
Borders, Inc., headquartered in Ann Arbor, Michigan, through
subsidiaries, operates over 140 large format book and music superstores
and 16 book superstores under the "Borders" name. The company also
operates over 900 mall-based and other bookstores primarily under the
"Waldenbooks" name and three music superstores under the "Planet Music"
name. The company is the second largest operator of book superstores and
the largest operator of mall-based bookstores based upon both sales and
number of stores.
CMS Energy Corporation (Class G), headquartered in Dearborn, Michigan,
supplies (through subsidiaries) electricity and natural gas in Michigan;
explores for and produces oil and natural gas; invests in, develops,
converts, constructs, operates and acquires non-utility power generation
projects; and owns, develops and manages natural gas transmission,
processing and storage projects.
Chemical Financial Corporation, headquartered in Midland, Michigan, a
registered bank holding company, conducts a commercial banking business
through 85 banking offices in 24 counties located across Michigan.
Chrysler Corporation, headquartered in Auburn Hills, Michigan, is the
third largest auto maker of U.S. passenger cars and trucks. The company
Page 15
makes, assembles and sells cars and trucks under the brand names
"Chrysler," "Dodge," "Plymouth," "Eagle" and "Jeep," as well as related
parts and accessories; and provides financial services to customers and
dealers.
Citizens Banking Corporation, headquartered in Flint, Michigan, through
subsidiaries, operates a banking business through over 90 offices in
Michigan and Illinois and provides direct lease financing of office,
medical and other equipment.
Comerica, Inc., headquartered in Detroit, Michigan, conducts a general
commercial banking business throughout five states. Businesses include
corporate, consumer and private banking, institutional trust and
investment management, international finance and trade services.
Compuware Corporation, headquartered in Farmington Hills, Michigan,
develops, sells and supports an integrated line of software products, as
well as client/server systems management and application development
products. The company also offers data processing professional services.
D&N Financial Corporation, headquartered in Hancock, Michigan, operates
48 financial services offices throughout Michigan and provides a variety
of financial products and services to meet the needs of businesses and
individual consumers. The bank, through its wholly-owned subsidiary
Quincy Insurance Agency, also provides investment and insurance services.
DTE Energy Co., headquartered in Detroit, Michigan, through wholly-owned
subsidiaries, supplies electricity in Detroit, Michigan and the
surrounding areas and in industrial and agricultural sections outside
Detroit; provides financial services for non-utility affiliates; holds
real estate investments; and provides specialty engineering services for
industrial and utility clients.
Donnelly Corporation, headquartered in Holland, Michigan, designs, makes
and sells glass-related and plastic molded products for the automotive
industry; and it supplies glass coatings for the transportation,
electronics and computer industries. Since acquiring a 48% interest in
Hohe GmbH & Co. KG, a German limited partnership, the company and Hohe
have combined to become the world's largest producer of automotive
mirror systems.
Dow Chemical Company, headquartered in Midland, Michigan, makes and
sells chemicals, plastic materials, agricultural and consumer products
and other specialized products and services. Industries served by the
company include aerospace, appliances, automotive, agriculture, building
and construction, chemical processing, consumer products, electronics,
environmental services, furniture, housewares, insurance and finance,
metalworking, oil and gas, packaging, processed foods, pulp and paper,
utilities and water treatment.
Federal-Mogul Corporation, headquartered in Southfield,
Michigan, with subsidiaries, makes and sells vehicular and industrial
components, including ball and roller bearings, engine and transmission
products, sealing devices, fuel pumps, lighting and safety products and
fluid-film bearings which are sold in the vehicular aftermarket and to
original equipment manufacturers.
Ford Motor Company, headquartered in Dearborn, Michigan, makes,
assembles and sells cars, vans, trucks and tractors and their related
parts and accessories. The company also provides financing, insurance,
savings and loan operations, and vehicle and equipment leasing. The
company is the second largest producer of cars and trucks in the world.
Foremost Corporation of America, headquartered in Caledonia, Michigan,
through wholly-owned subsidiaries, writes property and casualty
insurance for mobile homes and recreational vehicles in all states and
in Washington, D.C. The company also writes a limited amount of
automobile and homeowner property and casualty insurance.
General Motors Corporation, headquartered in Detroit, Michigan, with
subsidiaries, makes automobiles and trucks; supplies automotive systems
and components; produces advanced electronics systems and products;
makes locomotives; and provides financial, insurance, mortgage banking
and investment services.
Hayes Lemmerz International, Inc., headquartered in Romulus, Michigan,
is the world's largest wheel manufacturer and is a world leader in the
design, engineering, and manufacturing of steel and aluminum wheels and
brake drums and rotors for the automotive and commercial highway markets
in North America, Europe and Asia.
Intermet Corporation, headquartered in Troy, Michigan, with
subsidiaries, manufactures precision ductile, iron and aluminum
castings. The company also produces precision machined components,
Page 16
cranes, specialty service vehicles and provides custom coating
applications. Intermet Corporation serves automotive and industrial
equipment producers worldwide through its operating locations throughout
North America and Europe.
Kellogg Company, headquartered in Battle Creek, Michigan, with
subsidiaries, makes and markets ready-to-eat cereals and produces other
convenience food products including toaster pastries, frozen waffles and
cereal bars.
Kelly Services, Inc. (Class A), headquartered in Troy, Michigan,
provides temporary office clerical, legal, marketing, professional,
technical, light industrial and home care services to industry,
commerce, the professions, government and individuals through over 1,500
offices in the United States, Mexico, Europe, Australia, New Zealand and
Canada.
Knape & Vogt Manufacturing Co., headquartered in Grand Rapids, Michigan,
makes storage products which serve the consumer, contract builder,
hardware, and original equipment manufacturer markets. The company also
makes furniture components on a contractual basis.
La-Z-Boy, Inc., headquartered in Monroe, Michigan, makes reclining
chairs, sofas, swivel rockers, modular seating, loveseats, wall systems,
entertainment units and dining room and bedroom furniture; furniture for
offices and the hospitality and healthcare markets; and upholstered
furniture.
Lear Corporation, headquartered in Southfield, Michigan, manufactures
and distributes automobile and light truck seat systems. Products
include seat systems, seat frames, seat covers and other seat
components. The company sells its products to customers worldwide.
MCN Corporation, headquartered in Detroit, Michigan, through
subsidiaries, supplies natural gas to over 1,200,000 customers in over
500 communities throughout Michigan; markets, cogenerates, explores,
produces, gathers, processes, and stores gas; and provides computer
operations services.
Masco Corporation, headquartered in Taylor, Michigan, makes, sells and
installs building and home improvement products, including kitchen and
bath products and other specialty products. Kitchen and bath products
include cabinets, kitchen appliances, faucets, plumbing fittings, bath
and shower tub enclosures, whirlpools and spas and bath accessories.
Other specialty products include mechanical and electronic lock sets,
venting and ventilating equipment and insulation and water pumps.
MascoTech, Inc., headquartered in Taylor, Michigan, makes transportation
related products, including engine, drivetrain and aftermarket products
for the original equipment and aftermarket segments of the global
transportation industry.
Miller (Herman), Inc., headquartered in Zeeland, Michigan, with
subsidiaries, designs, makes and sells furniture systems, products and
related services for offices, and, to a lesser extent, for health-care
facilities, including hospitals and clinical, industrial and educational
laboratories.
Neogen Corporation, headquartered in Lansing, Michigan, develops, makes
and markets a diverse line of products used to provide solutions for
safety and improved quality in food, agriculture and pharmacologics.
Customers include agricultural producers, food processors, laboratories
and major pharmaceutical concerns.
Old Kent Financial Corporation, headquartered in Grand Rapids, Michigan,
is a bank holding company which, through its banking subsidiaries,
operates over 200 banking offices in Michigan and Illinois. Its
subsidiary, Old Kent Mortgage Company, operates offices located in 17
states. Old Kent's business is concentrated in a single industry-
commercial banking. Old Kent's subsidiaries offer a wide range of
banking, financial, and fiduciary services. These include accepting
deposits, commercial lending, consumer financing, real estate and lease
financing, equipment leasing, bank credit cards, debit cards, safe
deposit facilities, automated transaction machine services, cash
management, electronic banking services, money transfer services,
international banking services, corporate and personal trust services,
personal investment and securities brokerage, credit life insurance,
insurance agency services, and other banking services. Old Kent Mortgage
Company originates residential mortgages and conducts a traditional
retail and wholesale mortgage banking business in one- to four-family
residential mortgage loans. Another subsidiary, Old Kent Insurance
Group, Inc., is among Michigan's largest insurance agencies. The
Placement Agent is a subsidiary of Old Kent Financial Corporation.
Ottawa Financial Corporation, headquartered in Holland, Michigan,
through wholly-owned Ottawa Savings Bank, FSB, and AmeriBank, FSB,
conducts a general savings and loan business through 26 offices located
in six counties in western Michigan.
Perceptron, Inc., headquartered in Farmington Hills, Michigan, designs,
develops, makes and sells three-dimensional machine vision systems,
Page 17
which provide process control systems that precisely measure and monitor
component parts to ensure conformity to design intent, and that guide
robots to perform precise tasks on the assembly line. These systems
improve productivity, increase product quality and decrease costs in the
manufacturing workplace.
Perrigo Company, headquartered in Allegan, Michigan, makes over-the-
counter pharmaceutical and personal care products for the store brand
market; and makes and sells non-store brand products such as Swan,
Nature's Glo and Good Sense, and a limited number of products and
vitamins under contract for marketers of national brand products.
Pharmacia & Upjohn, headquartered in Kalamazoo, Michigan, develops,
makes and sells prescription pharmaceutical and other related healthcare
products sold mainly in the United States, Europe, Japan, the Pacific
Region, Latin America, the Middle East and Canada.
Pulte Corporation, headquartered in Bloomfield Hills, Michigan, is the
parent company of the Pulte group of companies. Pulte Home Corporation,
a homebuilder, operates in 40 markets located throughout 25 states, as
well as Puerto Rico and Mexico. Pulte Mortgage Corporation, the
company's national mortgage bank, operates in the same markets as Pulte
Home Corporation.
Republic Bancorp, Inc., headquartered in Owosso, Michigan, operates a
banking business through 96 banking and mortgage banking offices in 20
states. The company's flagship operations are conducted through Republic
Bank (Ann Arbor, Michigan), with 25 offices in Michigan; and Republic
Savings Bank with 11 offices mainly in the Cleveland, Ohio area. The
company's bank subsidiaries conduct full service banking operations,
excluding trust services.
SEMCO Energy, Inc., headquartered in Port Huron, Michigan, through
subsidiaries, supplies natural gas in Michigan, and markets natural gas
to customers in several states.
SPX Corporation, headquartered in Muskegon, Michigan, through
subsidiaries, makes and markets a wide range of specialty service tools
and diagnostic equipment, mainly to the global motor vehicle industry,
and component parts for light and heavy duty vehicle markets.
Simpson Industries, headquartered in Plymouth, Michigan, makes and
markets precision-machined powertrain and chassis products, consisting
of over 700 different components and assemblies sold mainly to original
equipment manufacturers of automobiles, light trucks, diesel engines and
heavy duty equipment in North America.
Stryker Corporation, headquartered in Kalamazoo, Michigan, makes
surgical drills, saws, fixation and reaming equipment; endoscopic
systems; orthopedic implants; and patient handling equipment, including
specialty hospital beds, stretchers and general patient room beds. The
company also operates 158 outpatient physical therapy clinics in 19
states.
Tecumseh Products Co., headquartered in Tecumseh, Michigan, makes and
sells hermetic compressors for air conditioning and refrigeration
products, gasoline engines and power train components for lawn and
garden applications, and pumps.
Thorn Apple Valley, Inc., headquartered in Southfield, Michigan, makes
and sells bacon, hot dogs and lunch meats, hams, smoked sausages and
turkey products. An officer of the Placement Agent serves on the Board
of Directors of this company.
Universal Forest Products, Inc., headquartered in Grand Rapids,
Michigan, through subsidiaries, makes, treats and distributes lumber
products for the do-it-yourself, manufactured housing, wholesale lumber
and industrial markets. Principal products include pressure-treated
wood, engineered roof trusses, dimension lumber, and value-added lumber
products, including lattice, fence panels, deck components, and kits for
various outdoor products sold under the company's "PRO-WOOD," "Deck
Necessities," "Lattice Basics," "Fence Fundamentals" and "Outdoor
Essentials" trademarks. An officer of the Placement Agent serves on the
Board of Directors of this company and a principal shareholder,
director, and officer of Universal Forest Products, Inc. serves as a
director of the Placement Agent.
Valassis Communications, Inc., headquartered in Livonia, Michigan,
prints and publishes cents-off coupons and other consumer purchase
incentives mainly for package goods manufacturers.
Whirlpool Corporation, 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. The company also provides financing
services.
Wolohan Lumber Company, headquartered in Saginaw, Michigan, operates a
chain of over 50 building supply stores in the Midwest, which offer a
Page 18
full line of lumber, building materials and related items.
Wolverine World Wide, Inc., headquartered in Rockford, Michigan,
designs, makes and sells various types and styles of footwear, including
work, dress and casual shoes, boots, uniform shoes, slippers and
moccasins and features contemporary styling with patented technologies
designed to provide maximum comfort. The company also tans pigskin
leather.
X-Rite, Inc., headquartered in Grandville, Michigan, makes
and sells proprietary quality control products which utilize advanced
electronics and optics technologies, such as densitometers and
sensitometers; a spectrophotometer and colorimeters; silver recovery
equipment; shrink packaging equipment; and radio-opaque marking tape.
Additional information concerning the Equity Securities included in the
Trust may be obtained from quarterly or annual reports filed by such
companies with the Securities and Exchange Commission.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life of the
Trust and may be more or less than the price at which they were
deposited in the Trust. The Equity Securities may appreciate or
depreciate in value (and may or may not pay dividends), depending on the
full range of economic and market influences affecting these companies
and their securities.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Equity Security will not be delivered to the Trust ("Failed
Contract Obligations"), 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 Obligation, 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 Obligation 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).
Once all of the Equity Securities in the Trust are acquired, the Trustee
will have no power to vary the investments of the Trust, i.e., the
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, and may dispose of
Equity Securities only under limited circumstances. See "Rights of Unit
Holders-How May Equity Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
Page 19
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
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. During the Initial
Offering Period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and
the ask prices of over-the-counter traded Equity Securities), plus or
minus cash, if any, in the Income and Capital Accounts of the Trust,
plus a deferred sales charge equal to $_____ per Unit. The deferred
sales charge will be assessed monthly ($_____ per Unit per month) over a
_____-month period commencing , 1998, and on the last business
day of each month thereafter, through , 1998. Units
purchased subsequent to the initial deferred sales charge payment but
still during the Initial Offering Period will be charged the amount of
the previously collected deferred sales charge at the time of purchase
and will be subject to the remaining deferred sales charge payments not
yet collected. The deferred sales charge will be paid from funds in the
Income and/or Capital Accounts, if sufficient, or from the periodic sale
of Equity Securities. At the Initial Date of Deposit, the total maximum
sales charge assessed to Unit holders on a per Unit basis will be ___%
of the Public Offering Price (equivalent to ___% 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 total maximum sales charge which may be
assessed to Unit holders on a per Unit basis is ___% of the Public
Offering Price. Upon completion of the deferred sales charge period, the
secondary market Public Offering Price will not include deferred sales
charge payments, but will instead include only a one-time initial sales
charge of ___% of the Public Offering Price (equivalent to _____% of the
net amount invested).
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 listed Equity
Securities and the ask prices of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding, reduced by the deferred sales charge not yet paid. For
secondary market sales after the completion of the Initial Offering
Period, the Sponsor's Repurchase Price is also based on the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and
the bid prices of over-the-counter traded Equity Securities), plus or
minus cash, if any, in the Income and Capital Accounts of the Trust
divided by the number of outstanding Units of the Trust.
The minimum amount which an investor may purchase of the Trust is $1,000.
In addition, investors should be aware that the Placement Agent will
change periodic fees or assets (such as Trust Units) contained in an
investment account managed by the Placement Agent on which a comprehensive
fee structure is imposed.
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price 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. The aggregate underlying value of
the Equity Securities will be determined in the following manner: if the
Equity Securities are listed on a national securities exchange or The
Nasdaq Stock Market, this evaluation is generally based on the closing
Page 20
sale prices on that exchange or that system (unless it is determined
that these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current ask prices on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
After the completion of the Initial Offering Period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of the Trust plus the applicable sales
charge. The aggregate underlying value of the Equity Securities for
secondary market sales is calculated in the same manner as described
above for sales made during the initial offering period with the
exception that bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. 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.
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 are deposited by the Sponsor, Units will be
distributed to the public at the then current Public Offering Price. The
Initial Offering Period may be up to approximately 360 days. During such
period, the Sponsor may deposit additional Equity Securities 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 "Public Offering-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 of Units of the Trust through the
Placement Agent will be made at the Public Offering Price described in
the Prospectus. The Placement Agent will charge periodic fees on
assets (such as Trust Units) contained in an investment account managed
by the Placement Agent on which a comprehensive fee structure is imposed.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have not indicated that these
particular agency transactions are not permitted under such Act. In
Texas and in certain other states, any banks making Units available must be
registered as broker/dealers under state law.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as the Dow Jones
Industrial Average, the Standard & Poor's 500, or any similar indexes,
corporate or U.S. Government bonds, bank CDs and money market accounts
Page 21
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
with the Dow Jones Industrial Average, the S&P 500 Composite Stock Price
Index, or performance data from Lipper Analytical Services, Inc. and
Morningstar Publications, Inc. or from publications such as Money, The
New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
What are the Sponsor's Profits?
The Sponsor of the Trust will receive a gross sales commission equal to
% of the Public Offering Price of the Units (equivalent to %
of the net amount invested, exclusive of the deferred sales charge). See
"Rights of Unit Holders-How are Units Distributed?" for information
regarding agency commissions available to the Placement
Agent. 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 Sponsor 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 Sponsor 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 % subject to
reduction beginning , 1998) 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 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 Accounts of
the Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee in
transferring and recording the ownership of Units, will be borne by the
Sponsor. If the supply of Units exceeds demand, or for some other
business reason, the Sponsor may discontinue purchases of Units at such
prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS UNITS, HE SHOULD
INQUIRE OF THE SPONSOR at its phone number listed on the back cover of
this prospectus AS TO CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR
REDEMPTION TO THE TRUSTEE. Units subject to a deferred sales charge,
which are sold or tendered for redemption prior to such time as the
entire deferred sales charge on such Units has been collected, will be
assessed the amount of the remaining deferred sales charge at the time
of sale or redemption.
Page 22
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances, the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in the Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See
"Summary of Essential Information." Persons who purchase Units will
commence receiving distributions only after such person becomes a record
owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker/dealer. The pro rata share
of cash in the Capital Account of the Trust will be computed as of the
fifteenth day of each month. Proceeds received on the sale of any Equity
Securities in the Trust, to the extent not used to meet redemptions of
Units or pay expenses, will be distributed on the last day of each month
to Unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $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 the minimum Capital
Account distribution amounts set forth above, distributions of funds in
the Capital Account, if any, will be made on the last day of each
December to Unit holders of record as of December 15. See "What is the
Federal Tax Status of Unit Holders?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
Page 23
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 only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
will, upon surrender of his Units for redemption, receive: (i) the pro
rata share of the amounts realized upon the disposition of Equity
Securities, unless he 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 the 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.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Equity
Securities sold during the year and the Equity Securities held at the
end of such year by the Trust; (3) the redemption price per Unit based
upon a computation thereof on the 31st day of December of such year (or
the last business day prior thereto); and (4) amounts of income and
capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tendering to
the Trustee, at its unit investment trust office in the City of New
York, the certificates representing the Units to be redeemed, or in the
case of uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee (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
Page 24
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of remaining
deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more for redemption may request
by written notice submitted at the time of tender from the Trustee, in
lieu of a cash redemption, a distribution of shares of 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. However, no In-Kind Distribution requests submitted
during the nine business days prior to the Mandatory Termination Date
will be honored. To the extent possible, In-Kind Distributions shall be
made by the Trustee through the distribution of each of the Equity
Securities in book-entry form to the account of the Unit holder's bank
or broker/dealer at the Depository Trust Company. An In-Kind
Distribution will be reduced by customary transfer and registration
charges. The tendering Unit holder will receive his pro rata number of
whole shares of each of the Equity Securities comprising the 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
"Rights of Unit Holders-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
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 and diversity of the Trust will be
reduced. Such sales may be required at a time when Equity Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized.
The Redemption Price per Unit will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of the listed Equity
Securities and either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
the over-the-counter traded Equity Securities) 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 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 and auditing fees), the
Evaluator and supervisory fees, if any; (4) cash held for distribution
to Unit holders of record of the Trust as of the business day prior to
the evaluation being made; and (5) other liabilities incurred by the
Trust; and finally dividing the results of such computation by the
number of Units of the Trust outstanding as of the date thereof.
The aggregate value of the Equity Securities will be determined in the
following manner: if the Equity Securities are listed on a national
securities exchange or The Nasdaq Stock Market, this evaluation is
generally based on the closing sale prices on that exchange or that
system (unless it is determined that these prices are inappropriate as a
basis for valuation) or, if there is no closing sale price on that
exchange or system, at the closing bid prices. If the Equity Securities
Page 25
are not so listed or, if so listed and the principal market therefor is
other than on the exchange, the evaluation shall generally be based on
the current bid prices on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid
prices are unavailable, the evaluation is generally determined (a) on
the basis of current bid prices for comparable securities, (b) by
appraising the value of the Equity Securities on the bid side of the
market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations, or
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 Contract 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 (or
any securities or other property received by the Trust in exchange for
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.
Page 26
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 the 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.
INFORMATION AS TO PLACEMENT AGENT, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Placement Agent?
Old Kent Bank is a Michigan banking corporation, headquartered at One
Vandenberg Center, 111 Lyon Street, N.W., Grand Rapids, Michigan 49503,
and is a wholly-owned subsidiary of Old Kent Financial Corporation.
Customers may call Old Kent Bank's Trust Department at 1-800-652-2657
with questions, for information, or to place an order to purchase the
Units.
The bank conducts a general commercial banking business with
individuals, partnerships, corporations, governmental units and other
entities. It offers a full range of commercial and retail banking,
financial and fiduciary services, including commercial and retail loans;
business and personal checking accounts, savings, money market and
individual retirement accounts, time deposit instruments, automated
teller machines, bank credit and debit cards, money transfer and cash
management services, commercial and residential real estate mortgages,
lease financing, personal investment and brokerage services and
corporate and personal trust services. Old Kent Bank has six wholly-
owned, operating subsidiaries engaged in residential mortgage
originations and servicing, securities brokerage, investment management,
insurance sales and equipment leasing.
Old Kent Bank is federally regulated as a member of the Federal Reserve
System and is also regulated by the Financial Institutions Bureau,
Corporation, Department of Consumer & Industry Services, State of
Michigan. The bank's deposits are insured by the Federal Deposit
Insurance Corporation to the fullest extent permitted by law. At
December 31, 1997, Old Kent Bank had total assets of $_______ million
and shareholders' equity of $______ million.
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 FT Series (formerly known as The First Trust Special
Situations Trust), The First Trust Insured Corporate Trust, The First
Trust of Insured Municipal Bonds and The First Trust GNMA. First Trust
introduced the first insured unit investment trust in 1974 and to date
more than $9 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals with
many years of experience in the unit investment trust industry. The
Sponsor is a member of the National Association of Securities Dealers,
Inc. and Securities Investor Protection Corporation and has its
principal offices at 1001 Warrenville Road, Lisle, Illinois 60532;
telephone number (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 Trust or to
any series thereof or to the Placement Agent. 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.)
Page 27
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
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 the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor or the Trustee, in
which event the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Page 28
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
Equity Securities owned by the Trust as shown by any evaluation, is less
than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in such Trust during the primary offering period,
or in the event that Units of the Trust not yet sold aggregating more
than 60% of the Units of the Trust are tendered for redemption by the
Sponsor. If the Trust is liquidated because of the redemption of unsold
Units of the Trust by the Sponsor, the Sponsor will refund to each
purchaser of Units of the Trust the entire sales charge and the
transaction fees paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit holders
of the Trust. Within a reasonable period after termination, the Trustee
will follow the procedures set forth under "How are Income and Capital
Distributed?"
Commencing during the period beginning nine business days prior to, and
no later than, 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 address appearing on the registration books of the Trust
maintained by the Trustee. At least 60 days prior to the Maturity Date
of the Trust, the Trustee will provide written notice thereof to all
Unit holders and will include with such notice a form to enable Unit
holders to elect a distribution of shares of 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 ten business days prior to the Mandatory Termination
Date of the Trust. Unit holders not electing a distribution of shares of
Equity Securities 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. In addition, to
the extent that Equity Securities are sold prior to the Mandatory
Termination Date, Unit holders will no benefit from any stock
appreciation they would have received had the Equity Securities not been
sold at such time. The Trustee will then distribute to each Unit holder
his pro rata share of the balance of the Income and Capital Accounts.
Page 29
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
Page 30
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 199
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 199, comprised of Michigan Growth Trust
Series at the opening of business on , 1998. 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
, 1998. 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 FT 199,
comprised of Michigan Growth Trust Series at the opening of business on
, 1998 in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1998
Page 31
Statement of Net Assets
MICHIGAN GROWTH TRUST SERIES
FT 199
At the Opening of Business on the Initial Date of Deposit
, 1998
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase contracts (1) (2) $
Organizational and offering costs (3)
____________
Less accrued organizational and offering costs (3) ( )
Less liability for deferred sales charge (4) ( )
____________
Net assets $
============
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less sales charge (5) ( )
____________
Net Assets $
============
<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 $
issued by The Chase Manhattan Bank has been deposited with the Trustee
as collateral, which is sufficient to cover the monies necessary for the
purchase of the Equity Securities pursuant to contracts for the purchase
of 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 the life of the Trust (approximately two years). The
estimated organizational and offering costs are based on
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
($ per Unit), payable to the Sponsor in _________ equal monthly
installments beginning on , 1998, and on the last
business day of each month thereafter through ,
1998. If Units are redeemed prior to , 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 sales charge computed at
the rate of % of the Public Offering Price (equivalent to %
of the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
</FN>
</TABLE>
Page 32
Schedule of Investments
MICHIGAN GROWTH TRUST SERIES
FT 199
At the Opening of Business on the Initial Date of Deposit
, 1998
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ___________
<C> <S> <C> <C> <C>
AAP Amway Asia Pacific, Ltd. 2-2.5% $ $
AJL Amway Japan Limited (ADR) 2-2.5%
ARBR Arbor Drugs, Inc. 2-2.5%
ACAM Autocam Corporation 2-2.5%
BGP Borders, Inc. 2-2.5%
CMS CMS Energy Corporation (Class G) 2-2.5%
CHFC Chemical Financial Corporation 2-2.5%
C Chrysler Corporation 2-2.5%
CBCF Citizens Banking Corporation 2-2.5%
CMA Comerica, Inc. 2-2.5%
CPWR Compuware Corporation 2-2.5%
CRI D&N Financial Corporation 2-2.5%
DTE DTE Energy Co. 2-2.5%
DON Donnelly Corporation 2-2.5%
DOW Dow Chemical Company 2-2.5%
FMO Federal-Mogul Corporation 2-2.5%
F Ford Motor Company 2-2.5%
FOM Foremost Corporation of America 2-2.5%
GM General Motors Corporation 2-2.5%
HAZ Hayes Lemmerz International, Inc. 2-2.5%
INMT Intermet Corporation 2-2.5%
K Kellogg Company 2-2.5%
KELYA Kelly Services, Inc. (Class A) 2-2.5%
KNAP Knape & Vogt Manufacturing Co. 2-2.5%
LZB La-Z-Boy, Inc. 2-2.5%
LEA Lear Corporation 2-2.5%
MCN MCN Corporation 2-2.5%
MAS Masco Corporation 2-2.5%
MSX MascoTech, Inc. 2-2.5%
MLHR Miller (Herman), Inc. 2-2.5%
NEOG Neogen Corporation 2-2.5%
OKEN Old Kent Financial Corporation 2-2.5%
OFCP Ottawa Financial Corporation 2-2.5%
PRCP Perceptron, Inc. 2-2.5%
PRGO Perrigo Company 2-2.5%
PNU Pharmacia & Upjohn 2-2.5%
PHM Pulte Corporation 2-2.5%
RBNC Republic Bancorp, Inc. 2-2.5%
SMGS SEMCO Energy, Inc. 2-2.5%
SPW SPX Corporation 2-2.5%
SMPS Simpson Industries 2-2.5%
STRY Stryker Corporation 2-2.5%
TECUA Tecumseh Products Co. 2-2.5%
TAVI Thorn Apple Valley, Inc. 2-2.5%
</TABLE>
Page 33
Schedule of Investments (cont.)
MICHIGAN GROWTH TRUST SERIES
FT 199
At the Opening of Business on the Initial Date of Deposit
, 1998
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ___________
<C> <S> <C> <C> <C>
UFPI Universal Forest Products, Inc. 2-2.5% $ $
VCI Valassis Communications, Inc. 2-2.5%
WHR Whirlpool Corporation 2-2.5%
WLHN Wolohan Lumber Company 2-2.5%
WWW Wolverine World Wide, Inc. 2-2.5%
XRIT X-Rite, Inc. 2-2.5%
_________
Total Investments 100% $
=========
____________
<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
contracts to purchase Equity Securities were entered into by the Sponsor
on , 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 last sale prices of the listed
Equity Securities and the ask prices of the over-the-counter traded
Equity Securities on the business day preceding the Initial Date of
Deposit). The 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 $
. Cost and profit to Sponsor relating to the Equity
Securities sold to the Trust were $ and $
, respectively.
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately 2.5% of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
</TABLE>
Page 34
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Page 35
CONTENTS:
Summary of Essential Information 4
Michigan Growth Trust Series
FT 199:
What is the FT Series? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 8
Are Investments in the Trust Eligible for
Retirement Plans? 12
Portfolio:
What are Equity Securities? 12
Risk Factors 12
What are the Equity Securities Selected for
Michigan Growth Trust Series? 15
What are Some Additional Considerations
for Investors? 19
Public Offering:
How is the Public Offering Price Determined? 20
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? 23
What Reports will Unit Holders Receive? 24
How May Units be Redeemed? 24
How May Units be Purchased by the Sponsor? 26
How May Equity Securities be Removed
from the Trust? 26
Information as to Placement Agent, Sponsor, Trustee
and Evaluator:
Who is the Placement Agent? 27
Who is the Sponsor? 27
Who is the Trustee? 28
Limitations on Liabilities of Sponsor and Trustee 28
Who is the Evaluator? 28
Other Information:
How May the Indenture be Amended or Terminated? 29
Legal Opinions 30
Experts 30
Report of Independent Auditors 31
Statement of Net Assets 32
Notes to Statement of Net Assets 32
Schedule of Investments 33
____________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
MICHIGAN GROWTH TRUST SERIES
Placement Agent:
OLD KENT BANK
One Vandenberg Center
111 Lyon Street N.W.
Grand Rapids, MI 49503
1-800-652-2657
Sponsor:
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-441
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
, 1998
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
MEMORANDUM
Re: FT 199
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between FT
230, which is the current fund, and FT 199, the filing of which
this memorandum accompanies, is the change in the series number.
The list of securities comprising the Fund, the evaluation,
record and distribution dates and other changes pertaining
specifically to the new series, such as size and number of Units
in the Fund and the statement of condition of the new Fund, will
be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the FT
230 Prospectus relate to the series number and size and the date
and various items of information which will be derived from and
apply specifically to the securities deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 199 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on January 9, 1998.
FT 199
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities January 9, 1998
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of Nike
Securities Corporation,
the General Partner
of Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for FT 199 among Nike Securities
L.P., as Depositor, The Chase Manhattan Bank, as Trustee
and First Trust Advisors L.P., as Evaluator and 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).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5
