SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES 205
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
CHAPMAN AND CUTLER
Attention: Eric F. Fess
111 West Monroe Street
Chicago, IL 60606
E. Title and Amount of
Securities Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee: $0.00
H. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 205
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
Preliminary Prospectus Dated June 25, 1997
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 205
10,000 Units (A Unit Investment Trust)
The attached final Prospectus for a prior Series of the Fund is
hereby used as a preliminary Prospectus for the above stated Series. The
narrative information and structure of the attached final Prospectus will
be substantially the same as that of the final Prospectus for this
Series. Information with respect to pricing, the number of Units, dates
and summary information regarding the characteristics of securities to be
deposited in this Series is not now available and will be different since
each Series has a unique Portfolio. Accordingly the information
contained herein with regard to the previous Series should be considered
as being included for informational purposes only. Ratings of the
securities in this Series are expected to be comparable to those of the
securities deposited in the previous Series. However, the Estimated
Current Return for this Series will depend on the interest rates and
offering prices of the securities in this Series and may vary materially
from that of the previous Series.
A registration statement relating to the units of this Series will
be filed with the Securities and Exchange Commission but has not yet
become effective. Information contained herein is subject to completion
or amendment. Such Units may not be sold nor may offer 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 the Units in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
First Trust (registered trademark)
COMMUNICATIONS GROWTH TRUST SERIES
ENERGY GROWTH TRUST, SERIES 2
INVESTMENT SERVICES GROWTH TRUST SERIES
OUTSOURCING GROWTH TRUST SERIES
SMALL-CAP GROWTH TRUST SERIES
The Trusts. The First Trust (registered trademark) Special Situations
Trust, Series 193 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts" and each individually as a "Trust."
The objective of each Trust is to provide for potential capital
appreciation by investing the Trust's portfolio in common stocks (the
"Equity Securities") of companies in the respective industries
represented by each Trust. See "Schedule of Investments" for each Trust.
Each Trust has a mandatory termination date ("Mandatory Termination
Date" or "Trust Ending Date") as set forth under "Summary of Essential
Information." There is, of course, no guarantee that the objective of
the Trusts will be achieved. Each Unit of a Trust represents an
undivided fractional interest in all the Equity Securities deposited in
such Trust.
The Equity Securities deposited in each 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."
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Equity Securities in the Trusts or cash (including a letter
of credit) with instructions to purchase additional Equity Securities in
the Trusts. Such deposits of additional Equity Securities will be done
in such a manner that the original proportionate relationship amongst
the individual issues of the Equity Securities in each Trust shall be
maintained. Any deposit by the Sponsor of additional Equity Securities,
or the purchase of additional Equity Securities pursuant to a cash
deposit, will duplicate, as nearly as is practicable, the original
proportionate relationship established on the Initial Date of Deposit,
and not the actual proportionate relationship on the subsequent date of
deposit, since the two may differ. Any such difference may be due to the
sale, redemption or liquidation of any Equity Securities deposited in
the Trusts on the Initial, or any subsequent, Date of Deposit. See "What
is the First Trust Special Situations Trust?" and "How May Equity
Securities be Removed from a Trust?"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is April 16, 1997
Page 1
Public Offering Price. The Public Offering Price per Unit of each Trust
during the initial offering period is equal to the aggregate underlying
value of the Equity Securities in such 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 such
Trust, plus an initial sales charge equal to the difference between the
maximum sales charge of 4.5% of the Public Offering Price and the
maximum remaining deferred sales charge, initially $.35 per Unit.
Commencing on November 28, 1997, and on the last business day of each
month thereafter, through March 31, 1998, a deferred sales charge of
$.07 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 subject to the initial sales charge and 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 sales charge of a Trust is reduced on a graduated scale for sales
involving at least $50,000. The total maximum sales charge assessed to
Unit holders on a per Unit basis will be 4.5% of the Public Offering
Price (equivalent to 4.545% of the net amount invested, exclusive of the
deferred sales charge), subject to a reduction beginning April 30, 1998.
A pro rata share of accumulated dividends, if any, in the Income Account
of a Trust is included in the Public Offering Price. The minimum amount
which an investor may purchase of a Trust is $1,000. Upon completion of
the deferred sales charge period, the secondary market Public Offering
Price per Unit for a Trust will not include deferred payments, but will
instead include only a one-time initial sales charge of 4.5% of the
Public Offering Price (equivalent to 4.712% of the net amount invested),
which will be reduced by 1/2 of 1% on each April 30, commencing April
30, 1998 to a minimum sales charge of 3.0%. See "How is the Public
Offering Price Determined?"
UNITS OF THE TRUSTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by a Trust, net of expenses of such 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. Any distribution of income
and/or capital will be net of the expenses of the respective Trust. See
"What is the Federal Tax Status of Unit Holders?" Additionally, upon
termination of the Trusts, the Trustee will distribute, upon surrender
of Units for redemption, to each Unit holder his pro rata share of a
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 Trusts and offer to repurchase such Units at prices
which are based on the aggregate underlying value of Equity Securities
in such Trusts (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 such Trusts. 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 Trusts (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 such Trusts. 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 a
Trust (generally determined by the closing sale prices of listed Equity
Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of a Trust. A Unit holder tendering 2,500
Units or more of a Trust for redemption may request a distribution of
shares of Equity Securities (reduced by customary transfer and
registration charges) in lieu of payment in cash. Any deferred sales
charge remaining on Units at the time of their sale or redemption will
be collected at that time. See "How May Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination of
the Trusts. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of a Trust specifying the time or times at which Unit holders may
Page 2
surrender their certificates for cancellation shall be given by the
Trustee to each Unit holder at his address appearing on the registration
books of such Trust maintained by the Trustee. At least 60 days prior to
the Mandatory Termination Date of each Trust, the Trustee will provide
written notice thereof to all Unit holders and will include with such
notice a form to enable Unit holders to elect a distribution of shares
of Equity Securities (reduced by customary transfer and registration
charges) if such Unit holder owns at least 2,500 Units of a Trust,
rather than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee of
Equity Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business days
prior to the Mandatory Termination Date of a Trust. Unit holders not
electing a distribution of shares of Equity Securities will receive a
cash distribution within a reasonable time after a Trust is terminated.
See "Rights of Unit Holders-How are Income and Capital Distributed?"
Risk Factors. An investment in a Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, changes in interest rates and economic recession.
Volatility in the market price of the Equity Securities in a Trust also
changes the value of the Units of the Trusts. Unit holders tendering
Units for redemption during periods of market volatility may receive
redemption proceeds which are more or less than they paid for the Units.
The Trusts' portfolios are not managed and Equity Securities will not be
sold by the Trusts regardless of market fluctuations, although certain
Equity Securities may be sold under certain limited circumstances. For
further information concerning these risk factors as well as a
discussion of additional risks specific to each Trust, 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-April 16, 1997
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Communications Energy Investment
Growth Trust Growth Trust Services Growth
Series Series 2 Trust Series
______________ ____________ _______________
<S> <C> <C> <C>
General Information
Initial Number of Units (1) 15,122 15,102 15,010
Fractional Undivided Interest in the Trust per Unit (1) 1/15,122 1/15,102 1/15,010
Public Offering Price:
Aggregate Offering Price Evaluation of
Equity Securities in Portfolio (2) $ 149,715 $ 149,510 $ 148,602
Aggregate Offering Price Evaluation of
Equity Securities per Unit $ 9.900 $ 9.900 $ 9.900
Maximum Sales Charge of 4.5% of the Public
Offering Price per Unit (4.545% of the net amount
invested, exclusive of the deferred sales charge) (3) $ .450 $ .450 $ .450
Less Deferred Sales Charge per Unit $ (.350) $ (.350) $ (.350)
Public Offering Price per Unit (3) $ 10.000 $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit $ 9.550 $ 9.550 $ 9.550
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less deferred sales charge) (4) $ 9.550 $ 9.550 $ 9.550
CUSIP Number 33718T 829 33718T 837 33718T 845
Trustee's Annual Fee per Unit outstanding $ .0096 $ .0096 $ .0096
Evaluator's Annual Fee per Unit outstanding (5) $ .0030 $ .0030 $ .0030
Maximum Supervisory Fee per Unit outstanding (6) $ .0035 $ .0035 $ .0035
Estimated Annual Amortization of Organizational and
Offering Costs per Unit outstanding (7) $ .0045 $ .0045 $ .0045
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date April 21, 1997
Mandatory Termination Date April 15, 2002
Discretionary Liquidation Amount A 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 such
Trust during the primary offering period.
Income Distribution Record Date Fifteenth day of each June and December commencing June 15, 1997.
Income Distribution Date (8) Last day of each June and December commencing June 30, 1997.
</TABLE>
[FN]
_____________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of a 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 National Market System is valued at the last closing sale price,
or if no such price exists or if the Equity Security is not so listed,
at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for a Trust of 4.5% of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $.35 per
Unit). Subsequent to the Initial Date of Deposit, the amount of the
initial sales charge will vary with changes in the aggregate underlying
value of the Equity Securities underlying the respective Trust. In
addition to the initial sales charge, Unit holders will pay a deferred
sales charge of $.07 per Unit per month commencing November 28, 1997 and
on the last business day of each month thereafter through March 31,
1998. During the initial offering period, Units purchased subsequent to
the initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments 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 April 1, 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 4.5% of the Public Offering Price and will decrease by 1/2 of 1% on
each subsequent April 30, commencing April 30, 1998 to a minimum sales
charge of 3.0% as described under "Public Offering." On the Initial Date
of Deposit there will be no accumulated dividends in the Income Account.
Anyone ordering Units after such date will pay a pro rata share of any
accumulated dividends in such Income Account. The Public Offering Price
as shown reflects the value of the Equity Securities at the opening of
business on the Initial Date of Deposit and establishes the original
proportionate relationship amongst the individual securities. No sales
to investors will be executed at this price. Additional Equity
Securities will be deposited during the day of the Initial Date of
Deposit which will be valued as of 4:00 p.m. Eastern time and sold to
investors at a Public Offering Price per Unit based on this valuation.
(4) See "How May Units be Redeemed?"
(5) The Evaluator's Fee is 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.
(6) The Supervisory Fee is payable to an affiliate of the Sponsor. In
addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit per Trust.
(7) Each Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee but not including the expenses
incurred in the printing of preliminary and final prospectuses, and
expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed the life of the Trusts (approximately
five years). See "What are the Expenses and Charges?" and "Statements of
Net Assets." Historically, the sponsors of unit investment trusts have
paid all the costs of establishing such trusts.
(8) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-April 16, 1997
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Outsourcing Small-Cap
Growth Trust Growth Trust
Series Series
____________ ____________
<S> <C> <C>
General Information
Initial Number of Units (1) 14,946 15,147
Fractional Undivided Interest in the Trust per Unit (1) 1/14,946 1/15,147
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 147,968 $ 149,961
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.900 $ 9.900
Maximum Sales Charge of 4.5% of the Public Offering
Price per Unit (4.545% of the net amount
invested, exclusive of the deferred sales charge) (3) $ .450 $ .450
Less Deferred Sales Charge per Unit $ (.350) $ (.350)
Public Offering Price per Unit (3) $ 10.000 $ 10.000
Sponsor's Initial Repurchase Price per Unit $ 9.550 $ 9.550
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less deferred sales charge) (4) $ 9.550 $ 9.550
CUSIP Number 33718T 852 33718T 860
Trustee's Annual Fee per Unit outstanding $ .0096 $ .0096
Evaluator's Annual Fee per Unit outstanding (5) $ .0030 $ .0030
Maximum Supervisory Fee per Unit outstanding (6) $ .0035 $ .0035
Estimated Annual Amortization of Organizational and
Offering Costs per Unit outstanding (7) $ .0045 $ .0045
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date April 21, 1997
Mandatory Termination Date April 15, 2002
Discretionary Liquidation Amount A 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 such
Trust during the primary offering period.
Income Distribution Record Date Fifteenth day of each June and December commencing June 15, 1997.
Income Distribution Date (8) Last day of each June and December commencing June 30, 1997.
</TABLE>
[FN]
______________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of a 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 National Market System is valued at the last closing sale price,
or if no such price exists or if the Equity Security is not so listed,
at the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for a Trust of 4.5% of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $.35 per
Unit). Subsequent to the Initial Date of Deposit, the amount of the
initial sales charge will vary with changes in the aggregate underlying
value of the Equity Securities underlying the respective Trust. In
addition to the initial sales charge, Unit holders will pay a deferred
sales charge of $.07 per Unit per month commencing November 28, 1997 and
on the last business day of each month thereafter through March 31,
1998. During the initial offering period, Units purchased subsequent to
the initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments 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 April 1, 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 4.5% of the Public Offering Price and will decrease by 1/2 of 1% on
each subsequent April 30, commencing April 30, 1998 to a minimum sales
charge of 3.0% as described under "Public Offering." On the Initial Date
of Deposit there will be no accumulated dividends in the Income Account.
Anyone ordering Units after such date will pay a pro rata share of any
accumulated dividends in such Income Account. The Public Offering Price
as shown reflects the value of the Equity Securities at the opening of
business on the Initial Date of Deposit and establishes the original
proportionate relationship amongst the individual securities. No sales
to investors will be executed at this price. Additional Equity
Securities will be deposited during the day of the Initial Date of
Deposit which will be valued as of 4:00 p.m. Eastern time and sold to
investors at a Public Offering Price per Unit based on this valuation.
(4) See "How May Units be Redeemed?"
(5) The Evaluator's Fee is 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.
(6) The Supervisory Fee is payable to an affiliate of the Sponsor. In
addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit per Trust.
(7) Each Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee but not including the expenses
incurred in the printing of preliminary and final prospectuses, and
expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed the life of the Trusts (approximately
five years). See "What are the Expenses and Charges?" and "Statements of
Net Assets." Historically, the sponsors of unit investment trusts have
paid all the costs of establishing such trusts.
(8) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 5
FEE TABLES
These Fee Tables are 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 Trusts
have a term of five years and are unit investment trusts rather than a
mutual fund, this information is presented to permit a comparison of fees.
<TABLE>
<CAPTION>
COMMUNICATIONS GROWTH TRUST SERIES
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees .141% .0138
Other operating expenses .055% .0054
________ ________
Total .294% $.0288
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Communications Growth Trust Series has an estimated operating
expense ratio of .294% and a 5% annual return on the investment throughout
the periods $ 48 $ 54 $ 61
</TABLE>
<TABLE>
<CAPTION>
ENERGY GROWTH TRUST, SERIES 2
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees .141% .0138
Other operating expenses .055% .0054
________ ________
Total .294% $.0288
======== ========
</TABLE>
Page 6
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Energy Growth Trust, Series 2 has an estimated operating
expense ratio of .294% and a 5% annual return on the investment throughout
the periods $ 48 $ 54 $ 61
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT SERVICES GROWTH TRUST SERIES
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees .141% .0138
Other operating expenses .055% .0054
________ ________
Total .294% $.0288
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Investment Services Growth Trust Series has an estimated
operating expense ratio of .294% and a 5% annual return on the investment
throughout the periods $ 48 $ 54 $ 61
</TABLE>
<TABLE>
<CAPTION>
OUTSOURCING GROWTH TRUST SERIES
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees .141% .0138
Other operating expenses .055% .0054
________ ________
Total .294% $.0288
======== ========
</TABLE>
Page 7
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Outsourcing Growth Trust Series has an estimated operating
expense ratio of .294% and a 5% annual return on the investment throughout
the periods $ 48 $ 54 $ 61
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP GROWTH TRUST SERIES
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees .141% .0138
Other operating expenses .055% .0054
________ ________
Total .294% $.0288
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Small-Cap Growth Trust Series has an estimated operating
expense ratio of .294% and a 5% annual return on the investment throughout
the periods $ 48 $ 54 $ 61
</TABLE>
The examples assume reinvestment of all dividends and distributions and
utilize a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. The
examples 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
examples.
[FN]
______________
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 4.5% and the maximum remaining deferred
sales charge (initially $.35 per Unit) and would exceed 1.0% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $.07 per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing November 28, 1997
through March 31, 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 exceeds $10.00 per Unit, the
deferred sales charge will be less than 3.5%. Units purchased subsequent
to the initial deferred sales charge payment will also be subject to the
remaining deferred sales charge payments.
Page 8
COMMUNICATIONS GROWTH TRUST SERIES
ENERGY GROWTH TRUST, SERIES 2
INVESTMENT SERVICES GROWTH TRUST SERIES
OUTSOURCING GROWTH TRUST SERIES
SMALL-CAP GROWTH TRUST SERIES
The First Trust Special Situations Trust, Series 193
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 193 is one of a series
of investment companies created by the Sponsor under the name of The
First Trust Special Situations Trust, all of which are generally similar
but each of which is separate and is designated by a different series
number. This Series consists of the underlying separate unit investment
trusts set forth above. The Trusts were 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 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 Trusts, the Trustee delivered to the Sponsor
documents evidencing the entire ownership of the Trusts.
Communications Growth Trust Series
The objective of the Communications Growth Trust Series (the
"Communications Trust") is to provide investors with the potential for
above-average capital appreciation through an investment in a
diversified portfolio of common stocks of communications companies which
the Sponsor believes are positioned to take advantage of the convergence
of many types of communications around the world. The Communications
Trust's portfolio is diversified across domestic and international
companies involved in computer networking, communications equipment,
communications services and wireless communications. The companies
selected for the Communications Trust have been researched and evaluated
using database screening techniques, fundamental analysis and the
judgment of the Sponsor's research experts. In general, the Sponsor
believes these companies have above-average growth prospects for both
sales and earnings, established market shares for their services and
lower-than-average levels of debt.
In the Sponsor's opinion, the communications industry is expected to
benefit from the convergence of a variety of industries including
entertainment, media and publishing. Companies well-positioned within
the communications industry are poised for both substantial revenue and
earnings growth potential over the next several years. The
Telecommunications Act of 1996 is breaking down regulatory barriers in
the United States, making it possible for companies once precluded from
offering multiple communication services to now do so. Cable companies,
for instance, can now offer telephone services while telephone companies
can offer video services. Increased competition and opportunities will
arise as telephone companies are able to offer both long-distance and
local services. Governments worldwide are moving toward democracy and
economies based on market-oriented policies. As part of this process,
communications systems are shifting from government-owned monopolies to
publicly-owned market-based companies. This worldwide deregulation is
likely to accelerate global demand for communications services. Due to
the fast pace of technological advances, domestic and global demand for
communications services and equipment is increasing. Recent advances,
such as wireless phones, fiber optics and the Internet, are allowing
businesses, individuals and governments greater access to a variety of
communications services at greatly reduced costs. This increased access,
in turn, is fueling the demand for products from manufacturers of
communications equipment and computer networks. In addition, future
technological advances will only serve to further lower communications-
related costs and continue to stimulate demand.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Communications Growth Trust Series. There is, however,
no assurance that the objective of the Communications Trust will be
achieved.
Page 9
Energy Growth Trust, Series 2
The objective of the Energy Growth Trust, Series 2 (the "Energy Growth
Trust") is to provide investors with the potential for above-average
capital appreciation through an investment in a diversified portfolio of
common stocks of energy companies which the Sponsor believes are
positioned to take advantage of the world's increasing demand for
energy. The Energy Trust's portfolio is diversified across many energy
sectors, including integrated oil, oilfield services and equipment, oil
and gas production and natural gas. The companies selected for the
Energy Trust have been researched and evaluated using database screening
techniques, fundamental analysis and the judgment of the Sponsor's
research experts. To help reduce risk, the Energy Trust avoids small
companies, newly-issued stocks and stocks with little or no earnings. In
general, the Sponsor believes the companies selected for the Energy
Trust have above-average growth prospects for both sales and earnings
and lower-than-average levels of debt.
Worldwide demand for energy continues to increase daily, driven
primarily by the rapid developments in newly-industrialized countries in
Asia, Eastern Europe and Latin America. Energy prices are expected to
rise by decade's end because current energy supplies are being drained
by the world's demands for energy. Industry overcapacity and declining
energy prices in the 1980s forced energy companies to become more
competitive under difficult conditions. Energy companies have greatly
improved their operating efficiencies through cost cutting,
consolidation and new technologies as discussed below:
- - Cost cutting has occurred through sizable workforce reductions and the
use of technology to lower overhead and production costs.
- - Consolidation and the divestiture of non-core assets has reduced
industry capacity and allowed companies to focus on their core operations.
- - New technologies are expected to lead to the discovery of additional
energy reserves and lower the cost of developing these reserves. Given
these measures, energy companies are positioned for significantly
improved profitability when energy prices increase, as analysts expect.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Energy Growth Trust. There is, however, no assurance
that the objective of the Energy Trust will be achieved.
Investment Services Growth Trust Series
The objective of the Investment Services Growth Trust Series (the
"Investment Services Trust") is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of brokerage and investment
services companies which the Sponsor believes are experiencing record-
setting earnings and profits growth. The Investment Services Trust's
portfolio is diversified across 25 companies engaged in stock brokerage,
commodity brokerage, investment banking, tax-advantaged investment or
investment sales, investment management or related investment advisory
services. The companies selected for the Investment Services Trust have
been researched and evaluated using database screening techniques,
fundamental analysis and the judgment of the Sponsor's research experts.
In general, the Sponsor believes these companies have above-average
growth prospects for both sales and earnings and established market
shares for their services.
An unprecedented long-running bull market, stable interest rates and low
inflation are among the favorable factors influencing the brokerage and
investment services industry's record-setting earnings/profits boom.
Their stocks, historically, have outperformed market averages; and
although past performance is no guarantee of future results, the Sponsor
believes this trend should continue while the investment climate is
favorable. Many brokerage/investment services firms are setting their
prospects overseas. Industry giants with formidable multi-dimensional
and global profit-generating capabilities are buying out brokerage firms
in many countries, while others are entering into joint ventures with
their foreign counterparts. Gaining a global foothold has, in many
cases, bolstered earnings, profits and stock prices. Late in 1996, the
Federal Reserve loosened its limitations on banks underwriting
securities, which will allow banks to acquire brokerage firms. Brokerage
firms could also benefit from proposed capital-gains tax cuts.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Investment Services Growth Trust Series. There is,
however, no assurance that the objective of the Investment Services
Trust will be achieved.
Page 10
Outsourcing Growth Trust Series
The objective of the Outsourcing Growth Trust Series (the "Outsourcing
Trust") is to provide investors with above-average capital appreciation
potential through an investment in a diversified portfolio of common
stocks of outsourcing companies which the Sponsor believes are
positioned to take advantage of the trend among institutions, such as
corporations and government entities, toward utilizing specialized,
vendor-supplied services. The Outsourcing Trust's portfolio is
diversified across several outsourcing companies involved in various
industries such as business services, electronics manufacturing,
information services and staffing. The companies selected for the
Outsourcing Trust have been researched and evaluated using database
screening techniques, fundamental analysis and the judgment of the
Sponsor's research experts. In general, the Sponsor believes the
companies selected for the Outsourcing Trust have above-average growth
prospects for both sales and earnings, established market shares for
their services and lower-than-average levels of debt.
In today's increasingly competitive business environment, many
businesses are reducing internal costs in order to maintain or enhance
their profitability. Outsourcing has become a way to help many
businesses reduce fixed costs which, consequently, has enabled them to
concentrate more on core operations. Outsourcing firms specialize in a
particular task and can perform the work more cost-effectively.
Outsourcing, furthermore, provides greater financial flexibility by
converting fixed costs into variable costs. Financial resources
otherwise spent on hiring/training in-house personnel become available
to spend on core operations. As a result, mundane but necessary tasks,
such as temporary staffing and uniform maintenance, are increasingly
being outsourced to firms with specialized services. With technological
and communications advancements occurring almost daily, the Sponsor
believes outsourcing firms are in an ideal position to meet businesses'
needs more quickly and profitably than an internal division. These
advancements also create a tremendous opportunity for firms to provide
solutions to businesses which are unable, or unwilling, to dedicate the
necessary resources internally to keep pace.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Outsourcing Growth Trust Series. There is, however, no
assurance that the objective of the Outsourcing Trust will be achieved.
Small-Cap Growth Trust Series
The objective of the Small-Cap Growth Trust Series (the "Small-Cap
Growth Trust") is to provide investors with above-average capital
appreciation potential through an investment in a diversified portfolio
of 40 small capitalization companies which the Sponsor believes have
substantial growth potential. The Small-Cap Growth Trust's portfolio is
well-diversified across several industries and concentrates on United
States-based small-cap companies included in the Russell 2000 Index.
Diversifying a portfolio helps to offset the risks normally associated
with equity investments, although risk cannot be entirely eliminated.
This type of diversification, furthermore, provides a convenient,
efficient way to own several stocks without considerable time and
capital commitments on the investor's part. The companies selected for
the Small-Cap Growth Trust have been researched and evaluated using
database screening techniques, fundamental analysis and the judgment of
the Sponsor's research experts. In general, the Sponsor believes these
companies have above-average growth prospects for both sales and
earnings, established market shares for their products and services and
lower-than-average levels of debt.
Historically, United States small-cap stocks have outperformed the
overall stock market, large-cap stocks, bonds and inflation over the
long term. Because small-cap stocks have the potential to provide higher
total returns, they are ideal for the more aggressive investor who is
comfortable with the above-average volatility that is inherent in United
States small-cap companies. The small-cap companies selected for the
Small-Cap Growth Trust are believed to have attractive valuations with
prospects for above-average earnings growth. In general, the stock
market performance of small-cap stocks has lagged the returns of large-
cap stocks during the past few years. These companies do not have the
same level of analyst coverage as larger-cap companies which, if
coverage expands, might result in higher prices for these Equity
Securities.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Small-Cap Growth Trust Series. There is, however, no
assurance that the objective of the Small-Cap Growth Trust will be
achieved.
Each Trust has a Mandatory Termination Date, as set forth under "Summary
Page 11
of Essential Information." Each Unit of a Trust represents an undivided
fractional interest in all the Equity Securities deposited in such Trust.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in each Trust's portfolio, as set forth
under "Schedule of Investments" for each Trust. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Equity Securities in a Trust, or cash
(including a letter of credit) with instructions to purchase additional
Equity Securities in a Trust. Units may be continuously offered for sale
to the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of a Trust. Any deposit by
the Sponsor of additional Equity Securities, or the purchase of
additional Equity Securities pursuant to a cash deposit, will duplicate,
as nearly as is practicable, the original proportionate relationship and
not the actual proportionate relationship on the subsequent date of
deposit, since the two may differ. Any such difference may be due to the
sale, redemption or liquidation of any of the Equity Securities
deposited in a Trust on the Initial, or any subsequent, Date of Deposit.
See "How May Equity Securities be Removed from a Trust?" Since the
prices of the underlying Equity Securities will fluctuate daily, the
ratio, on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as a result
of the deposit of additional Equity Securities in a Trust. If the
Sponsor deposits cash, however, existing and new investors may
experience a dilution of their investment and a reduction in their
anticipated income because of fluctuations in the prices of the Equity
Securities between the time of the cash deposit and the purchase of the
Equity Securities and because such Trust will pay the associated
brokerage fees. To minimize this effect, the Trusts will try to purchase
the Equity Securities as close to the evaluation time 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 a Trust
with respect to acquiring Equity Securities for a Trust. In acting in
such capacity, the Sponsor or its affiliate will be subject to the
restrictions under the Investment Company Act of 1940, as amended.
On the Initial Date of Deposit, each Unit of a Trust represented the
undivided fractional interest in the Equity Securities deposited in such
Trust set forth under "Summary of Essential Information" for each Trust.
To the extent that Units of a Trust are redeemed, the aggregate value of
the Equity Securities in such Trust will be reduced and the undivided
fractional interest represented by each outstanding Unit of that Trust
will increase. However, if additional Units are issued by a Trust in
connection with the deposit of additional Equity Securities or cash by
the Sponsor, the aggregate value of the Equity Securities in that Trust
will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit of that Trust
will be decreased proportionately. See "How May Units be Redeemed?"
What are the Expenses and Charges?
With the exception of brokerage fees discussed above and bookkeeping and
other administrative services provided to each Trust, for which the
Sponsor will be reimbursed in amounts as set forth under "Summary of
Essential Information," the Sponsor will not receive any fees in
connection with its activities relating to a Trust. Certain of the
expenses incurred in establishing a Trust, including the cost of the
initial preparation of documents relating to a Trust, Federal and state
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 each Trust. Such fee is based on the number of
Units outstanding in a Trust on January 1 of each year except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. In providing such supervisory services, the Portfolio
Supervisor may purchase research services from a variety of sources
which may include dealers of the Trusts.
Subsequent to the initial offering period, First Trust Advisors L.P., in
its capacity as the Evaluator for the Trusts, will receive a fee as
indicated in the "Summary of Essential Information." The Trustee pays
certain expenses of each Trust for which it is reimbursed by such Trust.
The Trustee will receive for its ordinary recurring services to each
Trust an annual fee set forth in each "Summary of Essential
Information," which is based upon the largest aggregate number of Units
Page 12
of each Trust outstanding at any time during the year. For a discussion
of the services performed by the Trustee pursuant to its obligations
under the Indenture, reference is made to the material set forth under
"Rights of Unit Holders."
The Trustee's and the above described fees are payable from the Income
Account of a Trust to the extent funds are available and then from the
Capital Account of such Trust. Since the Trustee has the use of the
funds being held in the Capital and Income Accounts for payment of
expenses and redemptions and since such Accounts are noninterest-bearing
to Unit holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to each 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,
supervisor services and evaluation services, such individual fees may
exceed the actual costs of providing such services for a 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 Trusts,
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 each
Trust's portfolio and the initial fees and expenses of the Trustee and
any other out-of-pocket expenses, will be paid by each Trust and charged
off over a period not to exceed the life of the Trusts (approximately
five years). The following additional charges are or may be incurred by
a 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 a
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 a Trust; indemnification of the Sponsor for any loss,
liability or expense incurred without gross negligence, bad faith or
willful misconduct in acting as Depositor of such Trust; all taxes and
other government charges imposed upon the Securities or any part of a
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 each Trust. In addition, the Trustee is empowered to sell
Equity Securities in a Trust in order to make funds available to pay all
these amounts if funds are not otherwise available in the Income and
Capital Accounts of such Trust. Since the Equity Securities are all
common stocks and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any assurance that dividends
will be sufficient to meet any or all expenses of a Trust. As described
above, if dividends are insufficient to cover expenses, it is likely
that Equity Securities will have to be sold to meet such 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 each Trust to be audited on an annual basis at
the expense of such Trusts 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 a Trust
covered by an audit may obtain a copy of the audited financial
statements upon request.
What is the Federal Tax Status of Unit Holders?
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 Trusts. For purposes of the following
discussion and opinion, it is assumed that each Equity Security is
Page 13
equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of a Trust under the
Code; and the income of each 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 a 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 a Trust regardless of whether such
dividends are used to pay a portion of the deferred sales charge. Unit
holders will be taxed in this manner regardless of whether distributions
from such Trust are actually received by the Unit holder.
3. Each Unit holder will have a taxable event when a Trust disposes of
an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder (except to the extent an In-Kind distribution of stocks
is received by such Unit holder as described below). The price a Unit
holder pays for his Units is allocated among his pro rata portion of
each Equity Security held by a Trust (in proportion to the fair market
values thereof on the valuation date nearest to the date the Unit holder
purchases his Units) in order to determine his initial tax basis for his
pro rata portion of each Equity Security held by such Trust. It should
be noted that certain legislative proposals have been made which could
affect the calculation of basis for Unit holders holding securities
substantially identical to the Equity Securities. Unit holders should
consult their own tax advisors with regard to the calculation of basis.
For Federal income tax purposes, a Unit holder's pro rata portion of
dividends, as defined by Section 316 of the Code, paid with respect to
an Equity Security held by a Trust is taxable as ordinary income to the
extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceeds such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, any such capital gain will be short-term unless a Unit
holder has held his Units for more than one year.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by a
Trust will generally be considered a capital gain (except in the case of
a dealer or a financial institution) and will generally be long-term if
the Unit holder has held his Units for more than one year (the date on
which the Units are acquired (i.e., the trade date) is excluded for
purposes of determining whether the Units have been held for more than
one year). A Unit holder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by a
Trust will generally be considered a capital loss (except in the case of
a dealer or a financial institution) and, in general, will be long-term
if the Unit holder has held his Units for more than one year. Unit
holders should consult their tax 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 a 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.
Page 14
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 a Trust
(to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address
special rules that must be considered in determining whether the 46-day
holding period requirement is met. Moreover, the allowable percentage of
the deduction will be reduced from 70% if a corporate Unit holder owns
certain stock (or Units) the financing of which is directly attributable
to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
To the extent 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.
Limitations on Deductibility of a Trust's Expenses by Unit Holders. Each
Unit holder's pro rata share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by 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 a
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by a
Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by a Trust or if the Unit holder disposes of a Unit. For taxpayers other
than corporations, net capital gains (which is defined as net long-term
capital gain over net short-term capital loss for a taxable year) are
subject to a maximum stated marginal tax rate of 28%. However, it should
be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum
stated rate for taxpayers other than corporations. Because some or all
capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after
April 30, 1993. Unit holders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision
on their investment in Units.
If the Unit holder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all assets of a Trust
involved including his pro rata portion of all the Equity Securities
represented by the Unit.
Legislative proposals have been made that would treat certain
transactions designed to reduce or eliminate risk of loss and
opportunities for gain as constructive sales for purposes of recognition
of gain (but not loss). Unit holders should consult their own tax
advisors with regard to any such constructive sale rules.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units or Termination of a Trust. As discussed in "Rights of Unit Holders-
How are Income and Capital Distributed?", under certain circumstances a
Unit holder who owns at least 2,500 Units of a Trust may request an In-
Kind Distribution upon the redemption of Units or the termination of the
Trust. The Unit holder requesting an In-Kind Distribution will be liable
Page 15
for expenses related thereto (the "Distribution Expenses") and the
amount of such In-Kind Distribution will be reduced by the amount of the
Distribution Expenses. See "Rights of Unit Holders-How are Income and
Capital Distributed?" As previously discussed, prior to the redemption
of Units or the termination of a Trust, a Unit holder is considered as
owning a pro rata portion of each of a 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 a Trust. However, if a Unit holder also
receives cash in exchange for a fractional share of an Equity Security
held by a Trust, such Unit holder will generally recognize gain or loss
based upon the difference between the amount of cash received by the
Unit holder and his tax basis in such fractional share of an Equity
Security held by a Trust.
Because a Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by a Trust. The
amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by a Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
Computation of the Unit Holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among his pro
rata portion of each of the Equity Securities held in a 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 pro
rata portion of each Equity Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by a Trust will be reduced to the extent dividends
(other than designated capital gain dividends on a Closed-End Fund) paid
with respect to such Equity Security are received by a Trust which are
not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by a Trust to such Unit holder (including amounts received
upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust (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% 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 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
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 United States tax purposes with respect to such
taxes. Investors should consult their tax advisers with respect to
Page 16
foreign withholding taxes and foreign tax credits.
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. Legislative
proposals have been made which would impose a required holding period
for such credits.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trusts Suitable for
Retirement Plans?"
The foregoing discussion relates only to the tax treatment of United
States Unit holders; Unit holders may be subject to foreign, state and
local taxation. 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
Trusts for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of such Trusts will be treated as the income
of the Unit holders thereof.
The foregoing discussion relates only to the tax treatment of U.S. Unit
holders ("U.S. Unit holders") with regard to Federal and certain aspects
of New York State and City income taxes. Unit holders may be subject to
taxation in New York or in other jurisdictions and should consult their
own tax advisors in this regard. As used herein, the term "U.S. Unit
holder" means an owner of a Unit of 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.
The tax discussion set forth above is a summary included for general
information purposes only. In view of the individual nature of tax
consequences, each Unit holder is advised to consult with his own tax
advisor with respect to the specific tax consequences of being a Unit
holder of the Trust and the exercise or expiration of the rights,
including the effect and applicability of state, local, foreign and
other tax laws and the possible effects of changes in Federal, foreign
or other tax laws.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
The Trusts consist of different issues of Equity Securities which are
listed on a national securities exchange or the Nasdaq National Market
System or traded in the over-the-counter market. See "What are the
Equity Securities Selected for Communications Growth Trust Series?,"
"What are the Equity Securities Selected for Energy Growth Trust, Series
2?," "What are the Equity Securities Selected for Investment Services
Growth Trust Series?," "What are the Equity Securities Selected for
Outsourcing Growth Trust Series?" and "What are the Equity Securities
Selected for Small-Cap Growth Trust Series?" for a general description
of the companies.
Risk Factors. An investment in Units of the Trusts should be made with
an understanding of the problems and risks such an investment may entail.
Communications Growth Trust Series. An investment in Units of the
Communications Trust should be made with an understanding of the
problems and risks such an investment may entail.
Page 17
The market for high-technology telecommunications products and services
is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Equity Securities depends in substantial part on the timely and
successful introduction of new products and services. An unexpected
change in one or more of the technologies affecting an issuer's products
or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results.
Furthermore, there can be no assurance that the issuers of the Equity
Securities will be able to respond timely to compete in the rapidly
developing marketplace.
Based on trading history of technology stocks, factors such as
announcements of new products or development of new technologies and
general conditions of the industry have caused and are likely to cause
the market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Equity Securities and therefore
the ability of a Unit holder to redeem Units a price equal to or greater
than the original price paid for such Units.
The telecommunications industry is subject to governmental regulation.
However, as market forces develop, the government will continue to
deregulate the telecommunications industry, promoting vigorous economic
competition and resulting in the rapid development of new
telecommunications technologies. The products and services of
telecommunications companies may be subject to rapid obsolescence. These
factors could affect the value of the Communications Trust's Units. For
example, while telephone companies in the United States are subject to
both state and federal regulations affecting permitted rates of returns
and the kinds of services that may be offered, the prohibition against
phone companies delivering video services has been lifted. This creates
competition between phone companies and cable operators and encourages
phone companies to modernize their communications infrastructure.
Certain types of companies represented in the Communications Trust's
portfolio are engaged in fierce competition for a share of the market of
their products. As a result, competitive pressures are intense and the
stocks are subject to rapid price volatility.
Many telecommunications companies rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect
their proprietary rights in their products and technologies. There can
be no assurance that the steps taken by the issuers of the Equity
Securities to protect their proprietary rights will be adequate to
prevent misappropriation of their technology or that competitors will
not independently develop technologies that are substantially equivalent
or superior to such issuers' technology.
Energy Growth Trust, Series 2. An investment in Units of the Energy
Growth Trust should be made with an understanding of the problems and
risks such an investment may entail.
The Energy Growth Trust invests in Equity Securities of companies
involved in the energy industry, including the conventional areas of
oil, gas, electricity and coal, and newer sources of energy such as
nuclear, geothermal, oil shale and solar power. The business activities
of companies held in the Energy Growth Trust may include: production,
generation, transmission, marketing, control, or measurement of energy
or energy fuels; providing component parts or services to companies
engaged in the above activities; energy research or experimentation; and
environmental activities related to the solution of energy problems,
such as energy conservation and pollution control. Companies
participating in new activities resulting from technological advances or
research discoveries in the energy field were also considered for the
Energy Growth Trust.
The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
conservation, the success of exploration projects, and tax and other
regulatory policies of various governments. As a result of the
foregoing, the Equity Securities in the Energy Growth Trust may be
subject to rapid price volatility. The Sponsor is unable to predict what
impact the foregoing factors will have on the Equity Securities during
the life of the Energy Growth Trust.
According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in United States environmental
Page 18
policies and the continued decline in U.S. production of crude oil.
Possible effects of these factors may be increased U.S. and world
dependence on oil from the Organization of Petroleum Exporting Countries
("OPEC") and highly uncertain and potentially more volatile oil prices.
Factors which the Sponsor believes may increase the profitability of oil
and petroleum operations include increasing demand for oil and petroleum
products as a result of the continued increases in annual miles driven
and the improvement in refinery operating margins caused by increases in
average domestic refinery utilization rates. The existence of surplus
crude oil production capacity and the willingness to adjust production
levels are the two principal requirements for stable crude oil markets.
Without excess capacity, supply disruptions in some countries cannot be
compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
contributes to market uncertainty. The likely restoration of a large
portion of Kuwait and Iraq's production and export capacity over the
next few years could lead to such a development in the absence of
substantial growth in world oil demand. Formerly, OPEC members attempted
to exercise control over production levels in each country through a
system of mandatory production quotas. Because of the crisis in the
Middle East, the mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be
curtailed on at least one occasion as a result of weak prices, even in
the absence of supplies from Kuwait and Iraq. The pressure to deviate
from mandatory quotas, if they are reimposed, is likely to be
substantial and could lead to a weakening of prices. In the longer term,
additional capacity and production will be required to accommodate the
expected large increases in world oil demand and to compensate for
expected sharp drops in U.S. crude oil production and exports from the
Soviet Union. Only a few OPEC countries, particularly Saudi Arabia, have
the petroleum reserves that will allow the required increase in
production capacity to be attained. Given the large-scale financing that
is required, the prospect that such expansion will occur soon enough to
meet the increased demand is uncertain.
Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers to significantly affect production, the concomitant volatility
of crude oil prices, increasing public and governmental concern over air
emissions, waste product disposal, fuel quality and the environmental
effects of fossil-fuel use in general.
In addition, any future scientific advances concerning new sources of
energy and fuels or legislative changes relating to the energy industry
or the environment could have a negative impact on the petroleum
products industry. While legislation has been enacted to deregulate
certain aspects of the oil industry, no assurances can be given that new
or additional regulations will not be adopted. Each of the problems
referred to could adversely affect the financial stability of the
issuers of any petroleum industry stocks in the Energy Growth Trust.
Investment Services Growth Trust Series. An investment in Units of the
Investment Services Trust should be made with an understanding of the
risks such an investment may entail. The Investment Services Trust
consists of companies engaged in investment banking/brokerage and
investment management. Such companies include brokerage firms,
broker/dealers, investment banks, finance companies and mutual fund
Page 19
companies. Earnings and share prices of companies in this industry are
quite volatile, and often exceed the volatility levels of the market as
a whole. Recently, ongoing consolidation in the industry and the strong
stock market has benefited stocks which investors believe will benefit
from greater investor and issuer activity. Major determinants of future
earnings of these companies are the direction of the stock market,
investor confidence, equity transaction volume, the level and direction
of long-term and short-term interest rates, and the outlook for emerging
markets. Negative trends in any of these earnings determinants could
have a serious adverse effect on the financial stability, as well as the
stock prices, of these companies. Furthermore, there can be no assurance
that the issuers of the Equity Securities included in the Investment
Services Trust will be able to respond timely to compete in the rapidly
developing marketplace. In addition to the foregoing, profit margins of
these companies continue to shrink due to the commoditization of
traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.
Outsourcing Growth Trust Series. An investment in Units of the
Outsourcing Trust should be made with an understanding of the risks such
an investment may entail. The Outsourcing Trust consists of companies
engaged in providing specialized, vendor-supplied services, such as
temporary staffing, information technology services, electronics
manufacturing services, and industrial services. Companies in this field
are subject to rapidly changing technology, cyclical market patterns,
evolving industry standards, economic recession in the industries they
service, shifting corporate trends regarding the hiring of vendors and
general stock market volatility. An unexpected change in one or more of
the foregoing factors may have a material adverse affect on an issuer's
operating results. Furthermore, there can be no assurance that the
issuers of the Equity Securities will be able to respond timely to
compete in the rapidly developing marketplace.
Small-Cap Growth Trust Series. An investment of Units of the Small-Cap
Growth Trust should be made with an understanding of the risks such an
investment may entail. While historically small-cap company stocks have
outperformed the stocks of large companies, the former have customarily
involved more investment risk as well. Small-cap companies may have
limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
the companies in which the Small-Cap Growth Trust may invest may
distribute, sell or produce products which have recently been brought to
market and may be dependent on key personnel.
The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for the Small-
Cap Growth Trust to buy and sell significant amounts of such shares
without an unfavorable impact on prevailing market prices. The
securities of small companies are often traded over-the-counter and may
not be traded in the volumes typical on a national securities exchange.
General. Each Trust consists of such Equity Securities listed under the
"Schedule of Investments" for each Trust as may continue to be held from
time to time in the Trust and any additional Equity Securities acquired
and held by the Trusts pursuant to the provisions of the Trust
Agreement, together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Equity Securities. However, should any contract
for the purchase of any of the Equity Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of the moneys
held in a Trust to cover such purchase are reinvested in substitute
Equity Securities in accordance with the Trust Agreement, refund the
cash and sales charge attributable to such failed contract to all Unit
holders on the next distribution date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that a Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Equity
Securities under certain limited circumstances. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
Page 20
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities or
property are nonetheless acquired by a Trust, they may be accepted for
deposit in such Trust and either sold by the Trustee or held in the
Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities be
Removed from a Trust?" Equity Securities, however, will not be sold by a
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, a Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of a Trust,
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the
general condition of the common stock market may worsen and the value of
the Equity Securities and therefore the value of the Units may decline.
The past market and earnings performance of the Equity Securities
included in the Trusts is not predictive of their future performance.
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 a Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of a Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Certain of the Equity Securities in certain Trusts are of foreign
issuers, and therefore, an investment in the Trust involves some
investment risks that are different in some respects from an investment
in a trust that invests entirely in securities of domestic issuers.
Those investment risks include future political and governmental
restrictions which might adversely affect the payment or receipt of
payment of dividends on the relevant Equity Securities, currency
exchange rate fluctuations, exchange control policies, and the limited
liquidity and small market capitalization of such foreign countries'
securities markets. In addition, for foreign issuers that are not
Page 21
subject to the reporting requirements of the Securities Exchange Act of
1934, there may be less publicly available information than is available
from a domestic issuer. Also, foreign issuers are not necessarily
subject to uniform accounting, auditing and financial reporting
standards, practices and requirements comparable to those applicable to
domestic issuers. However, due to the nature of the issuers of the
Equity Securities included in such Trusts, the Sponsor believes that
adequate information will be available to allow the Portfolio Supervisor
to provide portfolio surveillance.
Certain of the securities of the foreign issuers in such Trusts may be
in ADR form. ADRs evidence American Depositary Receipts which represent
common stock deposited with a custodian in a depositary. American
Depositary Shares, and receipts therefor (ADRs), are issued by an
American 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
term ADR generally includes American Depositary Shares.
ADRs 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 ADR 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 an ADR generally charges a fee, based on the
price of the ADR, upon issuance and cancellation of the ADR. 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 ADR 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 ADR market may also exist with respect to certain ADRs.
In varying degrees, any or all of these factors may affect the value of
the ADR compared with the value of the underlying shares in the local
market. In addition, the rights of holders of ADRs may be different than
those of holders of the underlying shares, and the market for ADRs may
be less liquid than that for the underlying shares. ADRs 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 ADRs, 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 ADRs and consequently the value of the Equity Securities.
The foreign issuers of securities that are ADRs 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 and
other countries. Therefore, for any securities of issuers (whether or
not they are in ADR 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 a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in a Trust and will vote
such stocks in accordance with the instructions of the Sponsor.
What are the Equity Securities Selected for Communications Growth Trust
Series?
Computer Networking
3COM Corporation, headquartered in Santa Clara, California, designs,
makes, markets and supports a wide range of global data networking
Page 22
computer systems based on industry standards and an open systems
architecture. The company also offers integrated services digital
network adapters and internetworking products and integrated digital
remote access systems.
Ascend Communications, Inc., headquartered in Alameda, California,
develops, makes, markets, sells and supports a broad range of high-speed
digital wide area network access products that enable the company's
customers to build Internet access systems, extensions and enhancements
to corporate backbone networks, and videoconferencing and multimedia
access facilities. Internet access systems consist of point-of-presence
(POP) termination equipment for Internet service providers (ISPs) and
remote site Internet access equipment for Internet subscribers.
Cabletron Systems, Inc., headquartered in Rochester, New Hampshire,
develops, makes, markets, installs and supports standards-based local
area network (LAN) and wide area network (WAN) connectivity hardware and
software products, including network interconnection equipment, test
equipment, cable assemblies and various cables, and connectors and
accessories. Products are distributed mainly through a direct sales
force in 29 countries.
Cisco Systems, Inc., headquartered in San Jose, California, develops,
makes, sells and supports high performance, multiprotocol
internetworking systems that link geographically dispersed local-area
and wide-area networks to form a single, seamless information
infrastructure.
Communications Equipment
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets transmission and enterprise networking
systems and connectivity products for use in fiber optic, twisted pair,
coaxial and wireless broadband networks. The company's products employ
fiber optic, hybrid fiber coax, wireless and traditional copper-based
technologies.
ADTRAN, Inc., headquartered in Huntsville, Alabama, designs, develops,
makes, markets and services a broad range of high speed digital
transmission products utilized by telephone companies and corporate end-
users to implement advanced digital data services over existing
telephone networks. The company also customizes many of its products for
private label distribution and for original equipment manufacturers to
incorporate into their own products.
Lucent Technologies, Inc., headquartered in Murray Hill, New Jersey, is
one of the world's leading designers, developers and manufacturers of
telecommunications systems, software and products; and is a leading
global marketer of business communications systems and computers.
Motorola, Inc., headquartered in Schaumburg, Illinois, makes two-way
radios, pagers, and electronic communications systems; and provides
elements for distributed data systems, handling equipment, and
automotive and industrial electronic products.
Northern Telecom Limited, headquartered in Ontario, Canada, makes fully
digital telecommunications switching equipment and communications
equipment and systems for business and residential use.
Telecommunication equipment includes central office switching equipment;
private branch exchanges and key systems; multimedia communications
solutions; cellular mobile telecommunications switches and radios;
wireless business communications systems; and optical fiber transmission
and cable products.
Tellabs, Inc., headquartered in Lisle, Illinois, designs, makes, markets
and services voice and data transport and network access systems used
worldwide by telephone companies, interexchange carriers, governments
and businesses. The company has plants in Illinois and Texas in the
United States, as well as Finland and Ireland; and a warehouse in Canada.
Communications Services
Airtouch Communications, Inc., headquartered in San Francisco,
California, provides wireless telecommunications services to subscribers
in the United States, Europe and Asia. The company also provides paging
services in the United States.
Ameritech Corporation, headquartered in Chicago, Illinois, provides
advanced telecommunications services in Illinois, Indiana, Michigan,
Ohio and Wisconsin, including local exchange and toll service, network
access and telecommunications products; cellular and other wireless
services; leasing; directory and electronic advertising services; and
interactive services.
BellSouth Corporation, headquartered in Atlanta, Georgia, provides
wireline telecommunications to approximately two-thirds of the
Page 23
population and one-half of the territory within Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South
Carolina and Tennessee. The company also provides wireless and
international communications services and advertising and publishing
products.
Compania de Telefonos de Chile S.A. (ADR), headquartered in Santiago,
Chile, provides local telephone service, and to a lesser extent,
domestic long distance telephone services in Chile. The company also
operates a cellular telephone network in Santiago and Valparaiso, Chile;
and provides paging and trunking, public telephone and cable television
services, and equipment sales.
Hong Kong Telecommunications, Ltd. (ADR), headquartered in Quarry Bay,
Hong Kong, holds exclusive rights through the year 2010 to provide,
through its subsidiaries, Hong Kong's local and international public
telephone and telex facilities and services as well as international
facsimile and data transmission facilities. The company also provides
telecommunications products and services without exclusive rights.
LCI International, Inc., headquartered in McLean, Virginia, provides
long-distance telecommunications services, including a broad array of
domestic and international voice and data services to commercial and
residential customers, mainly through leased and owned digital fiber
optic facilities. The company provides services throughout the United
States and to over 220 international locations.
Reuters Holdings plc (ADR), headquartered in London, England, supplies
the global business community and news media with a variety of products
including real-time financial data, transaction systems, information
management systems, access to numeric and textual databases, news, news
pictures and television news. The company also offers brokerage services.
SBC Communications, Inc., headquartered in San Antonio, Texas, furnishes
exchange telecommunications and exchange access service in Arkansas,
Kansas, Missouri, Oklahoma and Texas, and advertises for and publishes
Yellow Pages and White Pages directories. The company also constructs
and operates cellular radio systems and provides cellular radio services.
Telefonica de Espana S.A. (ADR), headquartered in Madrid, Spain,
operates as the exclusive supplier of telecommunication services in
Spain pursuant to a contract with the Spanish State granting the
exclusive right to own, develop, maintain and operate domestic and
international telephone systems.
Telefonos de Mexico S.A. (ADR), headquartered in Mexico City, Mexico,
with subsidiaries, provides domestic and international long distance and
local telephone service to approximately 20,500 communities throughout
Mexico. The company also provides voice, data and cellular services.
Vodafone Group plc (ADR), headquartered in Berkshire, England, provides
mobile telecommunication services in the United Kingdom, including
cellular radio, wide-area paging, data transmission and value added
services.
WorldCom, Inc., headquartered in Jackson, Mississippi, through
subsidiaries, provides switched and dedicated long distance products;
calling and debit cards; operator, 800 and broadband data services;
domestic and international private lines, conference calling, enhanced
faxed and data connections, television and radio transmission and mobile
satellite communications.
Wireless Communications
Andrew Corporation, headquartered in Orland Park, Illinois, supplies
coaxial cable systems and bulk cables, microwave, specialized and earth
station antenna systems, electronic radar systems and network products
to commercial, industrial, governmental and military customers. The
company also sells cellular antenna products and cellular telephone
accessories. The company operates in three strategic business areas:
Commercial, Government and Network.
LM Ericsson AB (ADR), headquartered in Stockholm, Sweden, provides
advanced systems, products and services for handling voice, data, image
and text in public and private communication networks. The company also
provides defense electronics and communication systems, network
engineering and specialized circuitry components.
Oy Nokia AB (ADR), headquartered in Helsinki, Finland, makes mobile
phones, computer monitors, multimedia network terminals and battery
chargers for mobile phones and satellite receivers and video
conferencing equipment.
Page 24
What are the Equity Securities Selected for Energy Growth Trust, Series 2?
Natural Gas
Enron Corporation, headquartered in Houston, Texas, gathers, transports
and markets natural gas at wholesale; explores for and produces natural
gas and crude oil; produces, purchases, transports and markets natural
gas liquids, crude oil, and refined petroleum products; and develops,
constructs and operates natural gas-fired power plants.
Sonat, Inc., headquartered in Birmingham, Alabama, through subsidiaries,
explores, acquires, develops and produces oil and natural gas
properties; operates a pipeline system for the transmission of natural
gas; owns and operates natural gas storage fields; and provides natural
gas connection and transportation services for customers, mainly in the
southeastern United States.
Oil and Gas, Production
Apache Corporation, headquartered in Houston, Texas, explores for,
develops, produces, gathers, processes and markets natural gas, oil and
natural gas liquids in North America, Western Australia, Egypt, and
offshore Indonesia, China and the Ivory Coast. In North America, the
company's interests are concentrated in the Gulf of Mexico, the Permian
Basin, the Anadarko Basin, the Gulf Coast, East Texas and the Western
Sedimentary Basin of Canada.
Nuevo Energy Company, headquartered in Houston, Texas, explores for and
produces oil and natural gas from properties located mainly in Alabama,
California, Louisiana, Texas and the Gulf of Mexico, and has undeveloped
acreage in Alabama, North Dakota and Texas.
Oilfield Services and Equipment
American Oilfield Divers, Inc., headquartered in Lafayette, Louisiana,
with subsidiaries, provides undersea construction, installation, repair
and maintenance and diving services to the offshore oil and gas
industry, mainly in the Gulf of Mexico; inland underwater services to
industrial and governmental customers; and other related underwater and
undersea products and services.
BJ Services Company, headquartered in Houston, Texas, provides well
cementing and stimulation services used in the completion of new oil and
gas wells and in remedial work on existing wells, both offshore and
onshore.
Baker Hughes, Inc., headquartered in Houston, Texas, makes drilling
products for the oil and gas industry; production products used in
installing, cementing, and perforating the casing in the drilling hole;
and process equipment, pumps and instrumentation.
Falcon Drilling Company, Inc., headquartered in Houston, Texas, provides
contract drilling and workover services for the domestic and
international oil and gas industry. The company owns and operates the
largest fleet of barge drilling rigs in the world and the largest fleet
of mat-supported offshore drilling rigs in the U.S. Gulf of Mexico.
Global Marine, Inc., headquartered in Houston, Texas, conducts contract
drilling for oil and gas in offshore areas using jackup drilling rigs,
drillships, semisubmersible drilling rigs and a drilling system;
provides offshore drilling management services; and engages in oil and
gas exploration, development and production.
Input/Output, Inc., headquartered in Stafford, Texas, designs, makes and
markets land-based seismic data acquisition systems and peripheral
seismic instruments for the oil and gas exploration and production
industry worldwide.
Nabors Industries, Inc., headquartered in Houston, Texas, operates the
largest land oil and gas drilling contract business in the world. The
company also provides oilfield management, engineering, transportation,
construction, maintenance, and other support services, and offshore
drilling services in the major offshore markets.
Reading & Bates Corporation, headquartered in Houston, Texas, provides
contract drilling and other related services in major offshore oil and
gas producing areas worldwide. As of March 1, 1996, the company's
offshore drilling fleet consisted of 10 jack-up drilling units, eight
semisubmersible drilling units and two drilling tenders.
Rowan Companies, Inc., headquartered in Houston, Texas, operates oil and
gas drilling rigs worldwide, as well as a fleet of helicopters and fixed-
Page 25
wing aircraft. The company also operates a mini-steel mill that recycles
scrap and produces alloy steel and steel plate, produces heavy equipment
and operates a marine rig construction yard.
Schlumberger, Ltd., headquartered in New York, New York, with
subsidiaries, provides oilfield services to the petroleum industry,
including measurement of the physical properties of underground
formations; well testing; pressure measurements; perforating, completion
and workover services; reservoir evaluation; and data services. The
company also makes measurement and systems products.
Tidewater, Inc., headquartered in New Orleans, Louisiana, through
divisions, provides support services to the international offshore
petroleum industry through a large fleet of vessels operating on a
worldwide basis; and natural gas and air compression equipment and
services to the energy industry, mainly in the United States.
Transocean Offshore, Inc., headquartered in Houston, Texas, provides
contract drilling of oil and gas wells in offshore areas throughout the
world. Offshore contract drilling involves the drilling of wells for oil
and gas located beneath the sea bed.
Western Atlas, Inc., headquartered in Beverly Hills, California, with
subsidiaries, provides seismic surveys and well-logging data for
exploration, development and production of oil and gas; develops
software products for graphic presentation and analysis of reservoir
characteristics; and supplies industrial automation technologies and
products.
Oils, Integrated
Amoco Corporation, headquartered in Chicago, Illinois, operates one of
the largest worldwide integrated organizations in the petroleum industry
that explores, develops and produces crude oil and natural gas; refines,
sells and transports petroleum and related products; and makes and sells
chemical products.
Chevron Corporation, headquartered in San Francisco, California,
explores for, develops and produces crude oil and natural gas;
transports crude oil, natural gas and petroleum products; makes
chemicals; conducts real estate activities; and explores for, produces
and markets coal and other minerals.
Exxon Corporation, headquartered in Irving, Texas, with subsidiaries and
affiliates, explores, produces, transports and sells crude oil and
natural gas petroleum products; explores and mines coal and other
minerals properties; makes and sells petrochemicals; and owns interests
in electrical power generation in Hong Kong.
Mobil Corporation, headquartered in Fairfax, Virginia, produces,
transports, refines and markets petroleum and natural gas and related
products, makes and markets chemicals and mines phosphate rock.
Repsol S.A. (ADR), headquartered in Madrid, Spain, explores, develops
and produces crude oil and natural gas; is involved in the
transportation of petroleum products, liquefied petroleum gas (LPG) and
natural gas; petroleum refining and production of petrochemicals; and
markets petroleum products, petroleum derivatives, petrochemicals, LPG
and natural gas.
Royal Dutch Petroleum Company, headquartered in The Hague, Netherlands,
through subsidiaries, produces crude oil, natural gas, chemicals, coal
and metals worldwide; and provides integrated petroleum services in the
United States.
Texaco, Inc., headquartered in White Plains, New York, with
subsidiaries, explores for, produces, transports, refines, and markets
crude oil, natural gas and petroleum products, including petrochemicals.
The company conducts its operations in the United States, Europe and
elsewhere throughout the Eastern and Western Hemispheres.
YPF Socied Anonima (ADR), headquartered in Buenos Aires, Argentina, with
its subsidiaries, explores for, develops and produces oil and natural
gas in Argentina, the United States, Bolivia, Ecuador, Venezuela and
Indonesia; and refines, markets, transports and distributes oil and a
broad range of petroleum products, petroleum derivatives, petrochemicals
and liquid petroleum gas.
What are the Equity Securities Selected for Investment Services Growth
Trust Series?
Advest Group, Inc., headquartered in Hartford, Connecticut, through
subsidiaries, offers diverse financial services, mainly in securities-
related areas. The company holds memberships on the New York Stock
Exchange, the American Stock Exchange and other leading exchanges, and
is registered with the Commodity Futures Trading Commission.
Page 26
Bear Stearns Companies, Inc., headquartered in New York, New York,
through subsidiaries, provides investment banking, securities trading
and brokerage services to corporations, governments, and institutional
and individual investors worldwide.
Dean Witter, Discover and Company, headquartered in New York, New York,
issues, markets and services the Discover Card, a proprietary general
purpose credit and financial services card designed to appeal to the
value-conscious consumer, and provides a broad range of investment
products, with primary focus on individual customers.
Donaldson Lufkin & Jenrette, Inc., headquartered in New York, New York,
provides securities underwriting, sales and trading, merchant banking,
financial advisory services, investment research, correspondent
brokerage services and asset management to institutional, corporate,
governmental and individual clients.
Eaton Vance Corp., headquartered in Boston, Massachusetts, through
subsidiaries, provides investment advisory services to mutual funds,
institutional accounts and individuals; markets mutual funds; and
invests in income-producing real estate and precious metal mining
properties.
A.G. Edwards, Inc., headquartered in St. Louis, Missouri, through
subsidiaries, provides securities and commodities brokerage, asset
management, insurance, trust, investment banking, and other related
financial services to individual, retail, corporate, governmental and
institutional clients. Revenues are derived mainly from commissions,
asset management and service fees, principal transactions, investment
banking and interest income.
EVEREN Capital Corporation, headquartered in Chicago, Illinois, through
EVEREN Securities, Inc., provides full-service, retail-oriented
securities brokerage operations with a distribution force of
approximately 1,175 retail registered representatives located in 140
branch offices in 27 states.
Fahnestock Viner Holdings, Inc., headquartered in Ontario, Canada,
through subsidiaries, provides securities brokerage services, including
retail securities brokerage, institutional sales and bond trading; and
offers both corporate and public finance services, underwritings,
research, market making and investment advisory and asset management
services.
Franklin Resources, Inc., headquartered in San Mateo, California,
through subsidiaries, provides investment management, share
distribution, transfer agent and administrative services to open-end
investment companies and provides investment management and related
services to closed-end investment companies.
Hambrecht & Quist Group, headquartered in San Francisco, California,
provides investment banking services with a focus on emerging growth
companies and growth oriented investors. The company helps raise capital
and provides financial advice to emerging growth companies within its
areas of focus.
Interra Financial, Inc., headquartered in Minneapolis, Minnesota,
through subsidiaries, provides investment banking, securities brokerage,
money management and real estate management.
Jefferies Group, Inc., headquartered in Los Angeles, California, through
subsidiaries, provides equity securities brokerage and trading services;
automated securities trade execution and analysis services; and performs
execution services for the company.
Legg Mason, Inc., headquartered in Baltimore, Maryland, through
subsidiaries, provides securities brokerage and trading, investment of
mutual funds and individual and institutional accounts, investment
banking for corporations and municipalities, insurance and annuity
products, commercial mortgage banking and other financial services.
Lehman Brothers Holdings, Inc., headquartered in New York, New York,
through wholly-owned Lehman Brothers, Inc., provides securities
underwriting, financial advisory and investment and merchant banking
services, securities and commodities trading as principal and agent, and
asset management to institutional, corporate, government and high net
worth individual clients throughout the United States and the world.
McDonald & Company Investments, headquartered in Cleveland, Ohio,
through wholly-owned McDonald & Co. Securities, Inc., operates a
regional investment banking, investment advisory and brokerage business
through 42 sales offices in California, Florida, Georgia, Illinois,
Indiana, Kentucky, Massachusetts, Michigan, New Jersey, Ohio, South
Carolina and Texas. The company also provides personal trust services.
Page 27
Merrill Lynch & Company, Inc., headquartered in New York, New York,
through wholly-owned Merrill Lynch, Pierce, Fenner & Smith Inc.,
provides securities, commodities, futures, options and selected
insurance product brokerage services; equity, fixed income, and economic
research services; clearing services for other broker/dealers;
investment banking services; and deals in corporate and municipal
securities.
Morgan Keegan, Inc., headquartered in Memphis, Tennessee, through wholly-
owned Morgan Keegan & Co., Inc., operates as a regional securities
broker/dealer serving institutional clients throughout the United States
and in other countries and retail customers in the southeastern United
States.
Paine Webber Group Inc., headquartered in New York, New York, through
wholly-owned PaineWebber Incorporated and other subsidiaries, provides
services in connection with the purchase and sale of securities, option
contracts, commodities and financial futures contracts, direct
investments, selected insurance products, fixed income instruments, and
mutual funds; and conducts merchant banking activities.
Piper Jaffray Companies, Inc., headquartered in Minneapolis, Minnesota,
through wholly-owned Piper Jaffray, Inc., operates as a broker and
dealer in listed and unlisted securities, including municipal bonds; and
as an investment banker underwriting corporate and municipal securities
and selling mutual fund shares, U.S. Government securities and
investment-related insurance products. The company also acts as broker
of options and futures contracts and provides other financial services.
T. Rowe Price Associates, headquartered in Baltimore, Maryland, serves
as investment adviser to the T. Rowe Price Mutual Funds, other sponsored
investment products and institutional and individual private accounts,
and provides certain administrative and shareholder services to the
Price Funds. As of December 31, 1996, total assets under management
totaled approximately $100 billion.
Quick & Reilly Group, Inc., headquartered in Palm Beach, Florida,
through subsidiaries, provides discount brokerage services mainly to
retail customers throughout the United States; clears securities
transactions for its own customers and for other brokerage firms and
banks; and acts as a specialist on the floor of the New York Stock
Exchange.
Raymond James Financial, Inc., headquartered in St. Petersburg, Florida,
through subsidiaries, provides investment and financial planning
products and services, including securities brokerage, investment
banking and asset management, banking and cash management, trust
services and life insurance.
Charles Schwab Corporation, headquartered in San Francisco, California,
through subsidiaries, provides discount securities brokerage and related
financial services, mainly to individuals who make their own investment
decisions, and offers trade execution services for Nasdaq securities to
broker/dealers and institutional customers.
Southwest Securities Group, Inc., headquartered in Dallas, Texas, with
subsidiaries, provides securities transaction processing and related
services to broker/dealers; securities brokerage and investment services
to individuals; investment banking services to municipal and corporate
clients; fixed income and equity securities trading; and asset
management and trust services.
Travelers Group, Inc., headquartered in New York, New York, through
subsidiaries, provides investment banking and securities brokerage
services; insurance services, including life, accident and health,
credit, property and casualty insurance; and consumer finance services.
What are the Equity Securities Selected for Outsourcing Growth Trust
Series?
Business Services
APAC Teleservices, Inc., headquartered in Deerfield, Illinois, provides
high volume telephone-based sales, marketing and customer management
solutions for corporate clients operating in the financial, insurance,
telecommunications, and business and consumer industries throughout the
United States.
Catalina Marketing Corporation, headquartered in St. Petersburg,
Florida, delivers promotions at the checkout stand of retail stores
through its proprietary Catalina Marketing Network, which links the
company's software, personal computers, central data bases and specially
designed thermal printers to point-of-scan controllers and scanning
equipment. The system prints promotion incentives based upon information
generated at the point of sale, from the purchased products' Universal
Product Code.
Central Parking Corporation, headquartered in Nashville, Tennessee,
provides parking management services at multi-level parking facilities
and surface lots. The company also provides parking consulting services,
shuttle services, valet services, parking meter enforcement services and
billing and collection services.
Page 28
UniFirst Corporation, headquartered in Wilmington, Massachusetts, rents,
cleans and delivers industrial employment uniforms and protective
clothing to a variety of manufacturers, retailers and service companies;
decontaminates and cleans work clothes that may have been exposed to
radioactive materials; and makes work shirts and pants.
Electronics Manufacturing
SCI Systems, Inc., headquartered in Huntsville, Alabama, designs, makes,
markets and services electronic products and systems primarily for the
computer, aerospace, defense, telecommunications, medical and
entertainment industries, as well as the U.S. Government.
Sanmina Corporation, headquartered in San Jose, California, provides
customized integrated electronics manufacturing services, including
turnkey electronic assembly and manufacturing management services, to
original equipment manufacturers in the electronics industry and makes
custom cable assemblies for the electronics industry.
Solectron Corporation, headquartered in Milpitas, California, provides a
complete range of advanced manufacturing services, including
sophisticated electronic assembly and turnkey manufacturing management
services, to original equipment manufacturers in the electronics
industry. By providing these services to its original equipment
manufacturer (OEM) customers, the company allows OEMs to focus on their
own core strategies such as product development and marketing.
Information Services
ABR Information Systems, Inc., headquartered in Palm Harbor, Florida,
provides healthcare benefits administration, information and compliance
services relating to the continuation of healthcare coverage following
changes in employment status and certain other events.
Analysts International Corporation, headquartered in Minneapolis,
Minnesota, provides services to assist users of computer equipment in
the development and maintenance of custom applications software programs
and the maintenance of systems software, through 34 regional and branch
offices in 19 states.
Automatic Data Processing, Inc. (ADP), headquartered in Roseland, New
Jersey, through subsidiaries, provides computer services, including
employer services, brokerage services, dealer services and automotive
claims services.
Electronic Data Systems Corporation, headquartered in Detroit, Michigan,
offers a full range of information technology services to enterprises,
government entities and individuals worldwide. Services include
management consulting, systems development, systems integration, systems
management and process management.
Equifax, Inc., headquartered in Atlanta, Georgia, through subsidiaries,
provides credit and payment services to retailers, banks and financial
institutions; insurance services to life, health, property and casualty
insurance companies; and healthcare information services to healthcare
providers, payors, and managed care organizations.
Fair Isaac & Company, Inc., headquartered in San Rafael, California,
develops data management systems and services for the consumer credit,
personal lines insurance, and direct marketing industries. The company
employs various tools, such as database enhancement software, predictive
modeling, adaptive control and systems automation to help its customers
make decisions.
First Data Corporation, headquartered in Hackensack, New Jersey,
provides processing services to issuers of VISA and MasterCard; payment
instrument processing services to institutions and consumers; telephone
and information processing services; shareholder services; information
systems; and data processing.
Keane, Inc., headquartered in Boston, Massachusetts, through divisions,
provides software design, development and management services to
corporations and government agencies with large and recurring software
development needs, and develops, makes and supports financial, patient
care and clinical application software for hospitals and long-term care
facilities. Services and methodologies are designed to enable companies
to leverage their existing information systems capability and more
rapidly and cost effectively develop and manage mission critical
software applications.
Paychex, Inc., headquartered in Rochester, New York, provides
computerized payroll accounting services to small- and medium-sized
businesses through 75 branch operating centers and 23 sales offices
nationwide.
Page 29
SunGard Data Systems, Inc., headquartered in Wayne, Pennsylvania,
through subsidiaries, provides computer services and software, including
proprietary investment support systems, comprehensive computer disaster
recovery services and proprietary healthcare information systems.
Staffing
AccuStaff, Inc., headquartered in Jacksonville, Florida, provides
temporary staffing personnel to businesses, professional and service
organizations and government agencies through 142 branch offices in 26
states and the District of Columbia.
CDI Corporation, headquartered in Philadelphia, Pennsylvania, provides
to its clients technical services, temporary engineering, drafting,
designing and other technical personnel, and temporary clerical,
secretarial and office support personnel services, and operates a
contingency search and recruiting organization.
Robert Half International, Inc., headquartered in Menlo Park,
California, provides temporary and permanent personnel in the fields of
accounting and finance. The company also provides administrative and
office personnel, paralegal, legal administrative and other legal
support positions as well as temporary information technology
professionals.
Interim Services, Inc., headquartered in Fort Lauderdale, Florida,
provides a range of customized staffing solutions, including flexible
staffing, home care, full-time placement, consulting and other value-
added services on a national basis to businesses, professional and
service organizations, governmental agencies, healthcare facilities and
individuals.
Manpower, Inc., headquartered in Milwaukee, Wisconsin, through
subsidiaries, provides temporary employees, contract services, employee
training and testing and related services to office, industrial,
technical and other clients. The company has over 2,400 offices in 41
countries. The company also derives revenues from fees earned on sales
of services by its franchise operations.
Norrell Corporation, headquartered in Atlanta, Georgia, through
subsidiaries, provides temporary personnel and outsourcing services to
businesses, professional and service organizations, and government
agencies.
On Assignment, Inc., headquartered in Calabasas, California, provides
temporary and permanent placement of scientific personnel with
laboratories and other institutions, and provides temporary and
permanent placement of credit, collection and medical billing
professionals to the financial services and healthcare industries.
Romac International, Inc., headquartered in Tampa, Florida, through
divisions, provides temporary, contract and permanent placement of
professional and technical personnel under the name ROMAC.
What are the Equity Securities Selected for Small-Cap Growth Trust Series?
Aames Financial Corporation, headquartered in Los Angeles, California,
is a consumer finance concern which originates, purchases, sells and
services home equity mortgage loans secured by single family residences.
The company operates 74 offices located throughout the United States.
Air Express International, Inc., headquartered in Darien, Connecticut,
through subsidiaries, provides domestic and international air freight
forwarding services, ocean freight services and customs brokerage
clearance services in the United States and 18 foreign countries, as
well as ancillary services.
American Bankers Insurance Group, Inc., headquartered in Miami, Florida,
through subsidiaries, provides mainly credit-related insurance,
including life, disability, accidental death and dismemberment, property
(sold in connection with consumer financing), and unemployment in the
United States, Canada, Latin America, the Caribbean and the United
Kingdom.
Belden, Inc., headquartered in St. Louis, Missouri, designs, makes and
markets wire, cable and cord products for electronic and electrical
applications. Products include multiconductor cables, coaxial cables and
fiber optic backbone cables; and cords and lead, hook-up and other wire.
Benchmark Electronics, Inc., headquartered in Angleton, Texas, assembles
printed circuit boards with computer-automated equipment using surface
mount and pin-through-hole interconnection technologies for customers
requiring low- to medium-volume assembly of high quality,
technologically complex printed circuit boards.
Billing Information Concepts, headquartered in San Antonio, Texas,
provides third-party billing clearinghouse and information management
services to the telecommunication industry.
Page 30
CMAC Investment Corporation, headquartered in Philadelphia,
Pennsylvania, provides private mortgage insurance coverage in the United
States to residential mortgage lenders, including mortgage bankers,
mortgage brokers, commercial banks and savings institutions.
Cavalier Homes, Inc., headquartered in Addison, Alabama, designs and
makes low-to-medium-priced manufactured homes sold through approximately
475 independent dealers operating approximately 575 retail sales centers
in 30 states, mainly in the Southeast, Southwest and Midwest regions of
the United States.
Day Runner, Inc., headquartered in Irvine, California, develops, makes
and markets paper-based personal organizers for the retail market.
Products include paper-based personal organizers, loose-leaf and spiral
planners, related refills and accessories and other organizing products.
ENCAD, Inc., headquartered in San Diego, California, designs, makes and
markets wide-format, color inkjet printers to increase productivity of
computer applications requiring quality printed output. The company also
sells consumables and accessories, including specialty ink and media.
Express Scripts, Inc., headquartered in Maryland Heights, Missouri,
provides pharmacy benefit management services to health benefit plan
sponsors and vision care services and home infusion therapy services and
supplies in selected markets.
Fair Isaac & Company, Inc., headquartered in San Rafael, California,
develops data management systems and services for the consumer credit,
personal lines insurance and direct marketing industries. The company
employs various tools, such as database enhancement software, predictive
modeling, adaptive control, and systems automation to help its customers
make decisions.
Fresh America Corporation, headquartered in Houston, Texas, operates
fresh produce departments in 369 Sam's Club membership warehouse clubs
in 36 states under a license agreement with Sam's Wholesale Club, a
division of Wal-Mart Stores, Inc.
Gentex Corporation, headquartered in Zeeland, Michigan, designs, makes
and sells proprietary products employing electro-optical technology.
Product lines consist of automatic rearview mirrors for the automotive
industry and fire protection products for the commercial building
industry.
Jack Henry & Associates, headquartered in Monett, Missouri, provides
integrated computer systems for in-house data processing to banks and
other financial institutions. The company also installs software,
performs data conversion, customizes software for the implementation of
its systems, and provides customer support services after the systems
are installed.
Innovex, Inc., headquartered in Hopkins, Minnesota, develops and makes
components, mainly lead wire assemblies, for the disk drive industry;
pacemaker lead wires and other medical devices; flexible circuits and
chemically etched parts for the medical and computer industries; and
software for document storage retrieval and management.
KCS Energy, Inc., headquartered in Edison, New Jersey, through
subsidiaries, acquires, explores, develops and produces natural gas and
crude oil. The company also operates a natural gas transportation
business and an energy marketing and services business.
ML Bancorp, Inc., headquartered in Villanova, Pennsylvania, through
wholly-owned Main Line Bank, conducts a general savings bank business
through 19 offices in Chester, Delaware and Montgomery counties,
Pennsylvania, and nine mortgage loan offices in eastern Pennsylvania,
southern New Jersey and northern Delaware.
MICROS Systems, Inc., headquartered in Beltsville, Maryland, designs,
makes, supplies and services point-of-sale systems, property management
systems and central reservation systems software for hospitality
providers.
Mueller Industries, Inc., headquartered in Wichita, Kansas, through
subsidiaries, makes and sells copper tube and fittings, brass and copper
alloy rods, bars and shapes, aluminum and brass forgings, aluminum and
copper impact extrusions, plastic fittings and valves, and
refrigeration, driers and flare fittings; and mines gold, hauls coal and
operates a railway.
NCI Building Systems, Inc., headquartered in Houston, Texas, designs,
makes and markets pre-engineered metal building systems and components
for commercial, industrial, agricultural and community service uses; and
overhead doors, self-storage buildings and metal home framing systems
and components. Metal building systems include primary and secondary
structural framing, and roof and siding panels. The company markets its
Page 31
products through companies, authorized builder networks, direct sales to
contractors, and private label sales to certain large builders.
Nuevo Energy Company, headquartered in Houston, Texas, explores and
produces oil and natural gas properties mainly in Alabama, California,
Louisiana, Texas, and the Gulf of Mexico; and has undeveloped acreage in
Alabama, North Dakota, and Texas.
OM Group, Inc., headquartered in Cleveland, Ohio, through subsidiaries,
produces and markets metal-based specialty chemicals including custom
catalysts, specialty additives, bonding agents, coloring agents and
specialty powders. The company makes and sells more than 250 specialty
chemical products for diverse applications in more than 15 industries.
Outback Steakhouse, Inc., headquartered in Tampa, Florida, through
subsidiaries, owns, operates and franchises 297 full-service restaurants
under the name Outback Steakhouse in 34 states, and 23 restaurants under
the name Carrabba's Italian Grill in four states.
PMT Services, Inc., headquartered in Brentwood, Tennessee, markets
electronic credit card authorization and payment systems to retail
merchants located throughout the United States. The company also
provides customer service and support to its merchants requiring
consultative problem solving and account management. Revenues are
derived from discount and merchant service fees; rentals, commissions
and sales relating to credit card processing equipment; and installation
fees.
Phoenix International Inc., headquartered in Maitland, Florida, designs,
develops, markets and supports highly adaptable, enterprise-wide
client/server application software for the financial services industry,
with primary focus on middle market banks. Revenues are derived from
license fees for software products and fees from related services. The
company's subsidiary, Phoenix Retail Banking System, supports all core
areas of bank data processing, including system administration, account
processing, teller functions, holding company accounting and budgeting.
Regal Cinemas, Inc., headquartered in Knoxville, Tennessee, operates 128
multi-screen motion picture theaters in the eastern United States. The
company intends to develop new theaters in existing and target markets;
add screens to existing theaters; acquire theaters; and develop
complementary theater concepts.
Renal Treatment Centers, Inc., headquartered in Berwyn, Pennsylvania,
provides dialysis treatment to patients suffering from chronic kidney
failure, primarily in the patient's home and in 78 freestanding
outpatient dialysis treatment centers. The company also provides acute
inpatient dialysis services to hospitals.
Richfood Holdings Inc., headquartered in Richmond, Virginia, through
subsidiaries, distributes a wide variety of groceries, frozen foods,
meats, produce, dairy products, delicatessen and bakery products and
general merchandise to approximately 1,700 retail supermarkets
throughout the Mid-Atlantic region. The company also operates 17
supermarkets in Delaware and Maryland.
Roper Industries, Inc., headquartered in Bogart, Georgia, makes and
distributes valves, pneumatic panel components, pressure and temperature
sensors, turbomachinery control systems and vibration monitoring
instruments; pumps and precision chemical dispensing products; and
petroleum product analysis/test equipment, leak testers, and analytical
products.
Rotech Medical Corporation, headquartered in Orlando, Florida, provides
home healthcare products and services, including respiratory therapy
equipment, convalescent medical equipment and home infusion therapy
products; and operates primary care physician practices. As of July 31,
1996, the company operated 366 home health care locations and 24 primary
care physician practices.
SPSS, Inc., headquartered in Chicago, Illinois, develops, markets and
supports statistical software products that enable end-users to perform
statistical analysis, including the generation of graphs and reports, on
a wide variety of computing platforms.
St. John Knits, Inc., headquartered in Irvine, California, designs,
makes and markets women's clothing and accessories, sold mainly under
the "St. John" trade name. Products consist primarily of knitwear,
designed for year-round use and suitable for women's business, evening
and casual needs. The company operates 16 retail boutiques and five
outlet stores in the United States. The company's products are
distributed mainly through a selected group of specialty retailers as
well as its own retail boutiques and outlet stores.
Smart Modular Technologies, Inc., headquartered in Fremont, California,
designs, makes and markets memory modules, personal computer card
Page 32
products and embedded processor modules primarily to leading original
equipment manufacturers in the computer, networking and
telecommunications industries.
Speedway Motorsports, Inc., headquartered in Concord, North Carolina, is
a promoter, marketer and sponsor of motorsports activities in the United
States. The company currently owns and operates the "Atlanta Motor
Speedway," "Bristol Motor Speedway," "Charlotte Motor Speedway," "Texas
Motor Speedway" and "600 Racing" and also operates "Sears-Point Raceway."
Sport-Haley, Inc., headquartered in Denver, Colorado,
designs, contracts for the manufacture of, and markets, under the
"Haley" label, golf and active sportswear apparel mainly consisting of
men's and women's cotton shirts, pullovers, vests, shorts, sweaters,
jackets, visors and pants.
Ultratech Stepper, Inc., headquartered in San Jose, California,
manufactures and markets photolithography equipment designed to reduce
the cost of ownership for manufacturers of integrated circuits and thin-
film head magnetic recording devices.
UniFirst Corporation, headquartered in Wilmington, Massachusetts, rents,
cleans and delivers industrial employment uniforms and protective
clothing to a variety of manufacturers, retailers and service companies;
decontaminates and cleans work clothes that may have been exposed to
radioactive materials; and makes work shirts and pants.
Vectra Banking Corporation, headquartered in Denver, Colorado, through
wholly-owned Vectra Bank, conducts a general commercial banking business
through 12 banking offices located throughout the Denver/Boulder,
Colorado area.
Waters Corporation, headquartered in Milford, Massachusetts, makes,
distributes and provides high-performance liquid chromatography (HPLC)
instruments, chromatography columns and other consumables, and related
services.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trusts.
The value of the Equity Securities will fluctuate over the life of a
Trust and may be more or less than the price at which they were
deposited in such Trust. The Equity Securities may appreciate or
depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities.
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 ("Failed Contract
Obligations") to a Trust, the Sponsor is authorized under the Indenture
to direct the Trustee to acquire other Equity Securities ("Replacement
Securities"). Any Replacement Security will be identical to those which
were the subject of the failed contract. The Replacement Securities must
be purchased within 20 days after delivery of the notice of a failed
contract and the purchase price may not exceed the amount of funds
reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraph is not utilized to acquire Replacement Securities in the event
of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
a Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in a Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of a Trust.
The Indenture also authorizes the Sponsor to increase the size of a
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in such Trust and
the issuance of a corresponding number of additional Units. If the
Sponsor deposits cash, existing and new investors could experience a
dilution of their investments and a reduction in anticipated income
because of fluctuations in the prices of the Equity Securities between
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trusts will pay the brokerage fees associated
therewith.
Each Trust consists of the Equity Securities listed under "Schedule of
Investments" for each Trust (or contracts to purchase such Securities)
Page 33
as may continue to be held from time to time in such Trust and any
additional Equity Securities acquired and held by such Trust pursuant to
the provisions of the Indenture (including provisions with respect to
deposits into such Trust of Equity Securities in connection with the
issuance of additional Units).
Once all of the Equity Securities in a Trust are acquired, the Trustee
will have no power to vary the investments of such Trust, i.e., the
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, and may dispose of
Equity Securities only under limited circumstances. See "How May Equity
Securities be Removed from a Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
which might reasonably be expected to have a material adverse effect on
a 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 a Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in a 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 a Trust, plus
an initial sales charge equal to the difference between the maximum
sales charge of 4.5% of the Public Offering Price and the maximum
remaining deferred sales charge, initially $.35 per Unit. Commencing on
November 28, 1997, and on the last business day of each month
thereafter, through March 31, 1998, a deferred sales charge of $.07 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 subject to the initial sales charge and 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 4.5% of the Public Offering Price (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge) subject
to reduction beginning April 30, 1998.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in a
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 a Trust divided by the number of Units of a Trust
outstanding. For secondary market sales after the completion of the
deferred sales charge period, the Public Offering Price is also based on
the aggregate underlying value of the Equity Securities in a 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 a Trust, plus a one-time initial sales charge of 4.5% of the
Public Offering Price (equivalent to 4.712% of the net amount invested)
divided by the number of outstanding Units of a Trust and will be
reduced by 1/2 of 1% on each subsequent April 30, commencing April 30,
1998 to a minimum sales charge of 3.0%.
The minimum amount which an investor may purchase of a Trust is $1,000.
The applicable sales charge for the Trusts for both primary and
secondary market sales is reduced by a discount as indicated below for
aggregate volume purchases of the Trusts (except for sales made pursuant
to a "wrap fee account" or similar arrangements as set forth below):
Page 34
<TABLE>
<CAPTION>
Primary and Secondary
_____________________
Percent of Percent of
Dollar Amount of Transaction Offering Net Amount
at Public Offering Price Price Invested
____________________________ __________ __________
<S> <C> <C>
$ 50,000 but less than $100,000 0.25% 0.2506%
$100,000 but less than $250,000 0.50% 0.5025%
$250,000 but less than $500,000 1.00% 1.0101%
$500,000 or more 2.00% 2.0408%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. The reduced sales charge
structure will apply on all purchases of Units of a Trust by the same
person on any one day from any one broker/dealer, bank or other selling
agent. Additionally, Units purchased in the name of the spouse of a
purchaser or in the name of a child of such purchaser under 21 years of
age will be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced sales
charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the broker/dealer, bank or other
selling agent of any such combined purchase prior to the sale in order
to obtain the indicated discount. Unit holders of other unit investment
trusts in which the Sponsor acted as sole Principal Underwriter and
which at the time of their creation had an estimated life of at least
five years may utilize their termination proceeds from such trusts to
purchase Units of Trusts included in this Prospectus subject only to the
remaining deferred sales charge to be collected on such Units. In
addition, with respect to the employees, officers and directors
(including their immediate family members, defined as spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons) of the Sponsor and
broker/dealers, banks or other selling agents and their subsidiaries and
vendors providing services to the Sponsor, Units may be purchased at the
Public Offering Price less the concession the Sponsor typically allows
to dealers and other selling agents.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to
dealers and other selling agents for purchases (see "Public Offering-How
are Units Distributed?") by investors who purchase Units through
registered investment advisers, certified financial planners or
registered broker/dealers who in each case either charge periodic fees
for financial planning, investment advisory or asset management
services, or provide such services in connection with the establishment
of an investment account for which a comprehensive "wrap fee" charge is
imposed.
Had the Units of the Trusts been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Equity Securities. During the initial offering period,
the aggregate value of the Units of a Trust shall be determined on the
basis of the aggregate underlying value of the Equity Securities therein
plus or minus cash, if any, in the Income and Capital Accounts of a
Trust. The aggregate underlying value of the Equity Securities during
the initial offering period will be determined in the following manner:
if the Equity Securities are listed on a national securities exchange or
the Nasdaq National Market System, this evaluation is generally based on
the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current ask prices on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
Page 35
the Income and Capital Accounts of a 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 the Units on the date of
settlement provided payment has been received. Cash, if any, made
available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934. Delivery of Certificates representing
Units so ordered will be made three business days following such order
or shortly thereafter. See "Rights of Unit Holders-How May Units be
Redeemed?" for information regarding the ability to redeem Units ordered
for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the Initial
Date of Deposit and (ii) for additional Units issued after such date as
additional Equity Securities or cash are deposited by the Sponsor, Units
will be distributed to the public at the then current Public Offering
Price. The initial offering period may be up to approximately 360 days.
During such period, the Sponsor may deposit additional Equity Securities
or cash in a 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 a Trust plus or
minus a pro rata share of cash, if any in the Income and Capital
Accounts of such Trust) may be resold at the then current Public
Offering Price. Upon the termination of the initial offering period,
unsold Units created or reacquired during the initial offering period
will be sold or resold at the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trusts for
sale in a number of states. Sales initially will be made to dealers and
other selling agents at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price, and, for secondary
market sales, 3.2% of the Public Offering Price (or 65% of the then
current maximum sales charge after April 30, 1998). Dealers and other
selling agents will be allowed volume concessions or agency commissions
during the primary and secondary market of 2.2% of the Public Offering
Price (or 65% of the then current maximum sales charge after April 30,
1998) on the sale of Units purchased with termination proceeds from
other unit investment trusts of which the Sponsor acted as sole
Principal Underwriter and which at the time of their creation had an
estimated life of at least five years. Volume concessions or agency
commissions of an additional 0.30% of the Public Offering Price will be
given to any broker/dealer or bank, who purchases from the Sponsor, in
the aggregate, at least $100,000 of the Trusts on the Initial Date of
Deposit or $250,000 on any day thereafter. In addition, dealers and
other selling agents will receive an additional volume concession or
agency commission with respect to sales of Units of each individual
Trust in the amounts set forth below:
<TABLE>
<CAPTION>
Total Sales per Trust Additional Concession
_____________________ _____________________
<S> <C>
$1,000,000 but less than $2,000,000 .10%
$2,000,000 but less than $3,000,000 .15%
$3,000,000 or more .20%
</TABLE>
Effective on each April 30, commencing April 30, 1998, the sales charge
will be reduced by 1/2 of 1% to a minimum sales charge of 3.0%. However,
resales of Units of a Trust by such dealers and other selling agents to
the public will be made at the Public Offering Price described in the
prospectus. The Sponsor reserves the right to change the amount of the
concession or agency commission from time to time. Certain commercial
banks may be making Units of a Trust available to their customers on an
agency basis. A portion of the sales charge paid by these customers is
retained by or remitted to the banks in the amounts indicated above.
Under the Glass-Steagall Act, banks are prohibited from underwriting
Page 36
Trust Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have not indicated that these
particular agency transactions are not permitted under such Act. In
Texas and in certain other states, any banks making Units available must
be registered as broker/dealers under state law.
From time to time the Sponsor may implement programs under which
broker/dealers, banks or other selling agents of a Trust may receive
nominal awards from the Sponsor for each of their registered
representatives who have sold a minimum number of UIT Units during a
specified time period. In addition, at various times the Sponsor may
implement other programs under which the sales force of a broker/dealer,
bank or other selling agent may be eligible to win other nominal awards
for certain sales efforts, or under which the Sponsor will reallow to
any such dealer that sponsors sales contests or recognition programs
conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the
total applicable sales charges on the sales generated by such person at
the public offering price during such programs. Also, the Sponsor in its
discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying dealers for certain
services or activities which are primarily intended to result in sales
of Units of a Trust. Such payments are made by the Sponsor out of its
own assets, and not out of the assets of a Trust. These programs will
not change the price Unit holders pay for their Units or the amount that
the Trusts will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trusts and returns
over specified periods on other similar trusts sponsored by Nike
Securities L.P. with returns on other taxable investments such as
corporate or U.S. Government bonds, bank CDs and money market accounts
or money market funds, each of which has investment characteristics that
may differ from those of the Trusts. U.S. Government bonds, for example,
are backed by the full faith and credit of the U.S. Government and bank
CDs and money market accounts are insured by an agency of the federal
government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics
of the Trusts are described more fully elsewhere in this Prospectus.
Each Trust's 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, other investment indices or performance
data from Lipper Analytical Services, Inc. and Morningstar Publications,
Inc. or from publications such as Money, The New York Times, U.S. News
and World Report, Business Week, Forbes or Fortune. As with other
performance data, performance comparisons should not be considered
representative of a Trust's relative performance for any future period.
What are the Sponsor's Profits?
The Sponsor of the Trusts will receive a gross sales commission equal to
4.5% of the Public Offering Price of the Units (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge), less
any reduced sales charge for quantity purchases as described under
"Public Offering-How is the Public Offering Price Determined?" See
"Public Offering-How are Units Distributed?" for information regarding
the receipt of additional concessions available to dealers and other
selling agents. In addition, the Sponsor may be considered to have
realized a profit or to have sustained a loss, as the case may be, in
the amount of any difference between the cost of the Equity Securities
to the Trusts (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" for each Trust. During the initial offering
period, the dealers and other selling agents also may realize profits or
sustain losses as a result of fluctuations after the Initial Date of
Deposit in the Public Offering Price received by the dealers and other
selling agents upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a sales charge of 4.5% subject to reduction
beginning April 30, 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.
Page 37
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 a Trust
plus or minus cash, if any, in the Income and Capital Accounts of such
Trust. All expenses incurred in maintaining a secondary market, other
than the fees of the Evaluator and the costs of the Trustee in
transferring and recording the ownership of Units, will be borne by the
Sponsor. If the supply of Units exceeds demand, or for some other
business reason, the Sponsor may discontinue purchases of Units at such
prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS OR HER UNITS, HE OR
SHE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Units subject to a
deferred sales charge which are sold or tendered for redemption prior to
such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales
charge at the time of sale or redemption.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable 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 their respective Trust; the number of Units issued or
transferred; the name, address and taxpayer identification number, if
any, of the new registered owner; a notation of any liens and
restrictions of the issuer and any adverse claims to which such Units
are or may be subject or a statement that there are no such liens,
restrictions or adverse claims; and the date the transfer was
registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee and
no certificate will be issued upon the transfer unless requested by the
Unit holder. A Unit holder may at any time request the Trustee to issue
certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in a Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Distribution Record
Date. See "Summary of Essential Information." Persons who purchase Units
Page 38
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 a Trust will be computed as
of the fifteenth day of each month. Proceeds received on the sale of any
Equity Securities in a Trust, to the extent not used to meet redemptions
of Units or pay expenses, will, however, be distributed on the last day
of each month to Unit holders of record on the fifteenth day of such
month if the amount available for distribution equals at least $1.00 per
100 Units. The Trustee is not required to pay interest on funds held in
the Capital Account of a Trust (but may itself earn interest thereon and
therefore benefit from the use of such funds). Notwithstanding,
distributions of funds in the Capital Account, if any, will be made on
the last day of each December to Unit holders of record as of December
15. See "What is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
a Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder 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 each 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 a Trust, less expenses of such Trust.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Equity Securities therein. All other receipts (e.g.
return of capital, etc.) are credited to the Capital Account of each
Trust.
The Trustee may establish reserves (the "Reserve Account") within each
Trust for state and local taxes, if any, and any governmental charges
payable out of a 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 a Trust the following information in reasonable detail: (1) a summary
of transactions in such Trust for such year; (2) any Equity Securities
sold during the year and the Equity Securities held at the end of such
year by such Trust; (3) the redemption price per Unit based upon a
computation thereof on the 31st day of December of such year (or the
last business day prior thereto); and (4) amounts of income and capital
distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trusts furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its unit investment trust office in the City of New York of
the certificates representing the Units to be redeemed, or in the case
of uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Page 39
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after 4:00 p.m. Eastern time, the date of tender
is the next day on which the New York Stock Exchange is open for trading
and such Units will be deemed to have been tendered to the Trustee on
such day for redemption at the redemption price computed on that day.
Units so redeemed shall be cancelled.
Any Unit holder tendering 2,500 Units or more of a Trust for redemption
may request by written notice submitted at the time of tender from the
Trustee in lieu of a cash redemption a distribution of shares of Equity
Securities in an amount and value of Equity Securities per Unit equal to
the Redemption Price Per Unit as determined as of the evaluation next
following tender. To the extent possible, in-kind distributions ("In-
Kind Distributions") shall be made by the Trustee through the
distribution of each of the Equity Securities in book-entry form to the
account of the Unit holder's bank or broker/dealer at the Depository
Trust Company. An In-Kind Distribution will be reduced by customary
transfer and registration charges. The tendering Unit holder will
receive his pro rata number of whole shares of each of the Equity
Securities comprising 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.
See "What is the Federal Tax Status of Unit Holders?" 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. Any amount so withheld is transmitted to the Internal
Revenue Service and may be recovered by the Unit holder only when filing
a tax return. Under normal circumstances the Trustee obtains the Unit
holder's tax identification number from the selling broker. However, any
time a Unit holder elects to tender Units for redemption, such Unit
holder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of a Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of each Trust.
The Trustee is empowered to sell Equity Securities of each Trust in
order to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of each 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 (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate
underlying value of the Equity Securities in a Trust plus or minus cash,
if any, in the Income and Capital Accounts of such Trust. The Redemption
Price per Unit is the pro rata share of each Unit determined by the
Trustee by adding: (1) the cash on hand in a Trust other than cash
deposited in a Trust to purchase Equity Securities not applied to the
purchase of such Equity Securities; (2) the aggregate value of the
Equity Securities held in a Trust, as determined by the Evaluator on the
basis of the aggregate underlying value of the Equity Securities in such
Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation; and
deducting therefrom: (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust; (2) any amounts owing to
the Trustee for its advances; (3) an amount representing estimated
accrued expenses of a 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 a Trust as of the business day prior to the
evaluation being made; and (5) other liabilities incurred by a 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 used to calculate the
Redemption Price per Unit will be determined in the following manner: if
the Equity Securities are listed on a national securities exchange or
Page 40
the Nasdaq National Market System, this evaluation is generally based on
the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing bid prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefor is other than on the exchange,
the evaluation shall generally be based on the current bid 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 a Trust?
The Portfolios of the Trusts are not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to a Trust.
Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by a Trust of any securities or other property other than the Equity
Securities is prohibited. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by a Trust, they may be accepted for deposit in a Trust and
either sold by the Trustee or held in a Trust pursuant to the direction
of the Sponsor (who may rely on the advice of the Portfolio Supervisor).
Proceeds from the sale of Equity Securities (or any securities or other
property received by a Trust in exchange for Equity Securities) by the
Trustee are credited to the Capital Account of a Trust for distribution
to Unit holders or to meet redemptions. The Trustee may, from time to
time, retain and pay compensation to the Sponsor (or an affiliate of the
Page 41
Sponsor) to act as agent for the Trusts with respect to selling Equity
Securities from the Trusts. In acting in such capacity, the Sponsor or
its affiliate will be held subject to the restrictions under the
Investment Company Act of 1940, as amended.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of
expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for a Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold. The Sponsor
may consider sales of Units of unit investment trusts which it sponsors
in making recommendations to the Trustee as to the selection of
broker/dealers to execute the Trusts' portfolio transactions.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds 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 Trusts or to any series thereof or to any other dealer.
The information is included herein only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trusts
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.
Page 42
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 Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor or the Trustee, in
which event the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." A Trust may be liquidated at any time by consent of 100%
of the Unit holders of a Trust or by the Trustee when the value of the
Equity Securities owned by a 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 a Trust not yet sold aggregating more than
60% of the Units of such Trust are tendered for redemption by a
Page 43
broker/dealer, including the Sponsor. If a Trust is liquidated because
of the redemption of unsold Units of such Trust by a broker/dealer, the
Sponsor will refund to each purchaser of Units of such Trust the entire
sales charge paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit holders
of such Trust. Within a reasonable period after termination, the Trustee
will follow the procedures set forth under "How are Income and Capital
Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities will
begin to be sold in connection with the termination of a Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of a Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his address appearing on the registration books of the Trust
maintained by the Trustee. At least 60 days prior to the Mandatory
Termination Date of a Trust the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 2,500 Units of such Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business days
prior to the Mandatory Termination Date of a Trust. See "What is the
Federal Tax Status of Unit Holders?" 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 a Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the funds of such
Trust any accrued costs, expenses, advances or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee and
costs of liquidation and any amounts required as a reserve to provide
for payment of any applicable taxes or other governmental charges. Any
sale of Equity Securities in a Trust upon termination may result in a
lower amount than might otherwise be realized if such sale were not
required at such time. The Trustee will then distribute to each Unit
holder his pro rata share of the balance of the Income and Capital
Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trusts.
Experts
The statements of net assets, including the schedules of investments, of
the Trusts at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement, have been
audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein and in the Registration
Statement, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Page 44
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 193
We have audited the accompanying statements of net assets, including the
schedules of investments, of The First Trust Special Situations Trust,
Series 193, comprised of Communications Growth Trust Series, Energy
Growth Trust, Series 2, Investment Services Growth Trust Series,
Outsourcing Growth Trust Series, and Small-Cap Growth Trust Series, at
the opening of business on April 16, 1997. These statements of net
assets are the responsibility of the Trusts' Sponsor. Our responsibility
is to express an opinion on these statements of net assets based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statements of net assets
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
statements of net assets. Our procedures included confirmation of the
letters of credit held by the Trustee and deposited in the Trusts on
April 16, 1997. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well
as evaluating the overall presentation of the statements of net assets.
We believe that our audit of the statements of net assets provides a
reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 193, comprised of Communications
Growth Trust Series, Energy Growth Trust, Series 2, Investment Services
Growth Trust Series, Outsourcing Growth Trust Series, and Small-Cap
Growth Trust Series, at the opening of business on April 16, 1997 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
April 16, 1997
Page 45
Statements of Net Assets
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
Communications Energy Investment Services
Growth Trust Growth Trust Growth Trust
Series Series 2 Series
______________ ____________ ___________________
<S> <C> <C> <C>
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ 149,715 $ 149,510 $ 148,602
Organizational and offering costs (3) 45,000 45,000 45,000
_________ _________ _________
194,715 194,510 193,602
Less accrued organizational and
offering costs (3) (45,000) (45,000) (45,000)
Less liability for deferred sales charge (4) (5,293) (5,286) (5,254)
_________ _________ _________
Net assets $ 144,422 $ 144,224 $ 143,348
========= ========= =========
Units outstanding 15,122 15,102 15,010
ANALYSIS OF NET ASSETS
Cost to investors (5) $ 151,227 $ 151,020 $ 150,103
Less sales charge (5) (6,805) (6,796) (6,755)
_________ _________ ________
Net Assets $ 144,422 $ 144,224 $ 143,348
========= ========= ========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) For each Trust, an irrevocable letter of credit totaling $200,000
issued by The Chase Manhattan Bank has been deposited with the Trustee
as collateral, which is sufficient to cover the monies necessary for the
purchase of the Equity Securities pursuant to contracts for the purchase
of such Equity Securities.
(3) Each Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed the life of the Trusts (approximately five years). The
estimated organizational and offering costs are based on 2,000,000 Units
of each Trust expected to be issued. To the extent the number of Units
issued is larger or smaller, the estimate will vary.
(4) Represents the amount of mandatory distributions from each Trust
($.35 per Unit), payable to the Sponsor in five equal monthly
installments beginning on November 28, 1997, and on the last business
day of each month thereafter through March 31, 1998. If Units are
redeemed prior to March 31, 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 4.5% of the Public Offering Price (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
Page 46
Statements of Net Assets
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
Outsourcing Small-Cap
Growth Trust Growth Trust
Series Series
____________ ____________
<S> <C> <C>
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ 147,968 $ 149,961
Organizational and offering costs (3) 45,000 45,000
_________ _________
192,968 194,961
Less accrued organizational and offering costs (3) (45,000) (45,000)
Less liability for deferred sales charge (4) (5,231) (5,301)
_________ _________
Net assets $ 142,737 $ 144,660
========= =========
Units outstanding 14,946 15,147
ANALYSIS OF NET ASSETS
Cost to investors (5) $ 149,463 $ 151,476
Less sales charge (5) (6,726) (6,816)
_________ _________
Net Assets $ 142,737 $ 144,660
========= =========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) For each Trust, an irrevocable letter of credit totaling $200,000
issued by The Chase Manhattan Bank has been deposited with the Trustee
as collateral, which is sufficient to cover the monies necessary for the
purchase of the Equity Securities pursuant to contracts for the purchase
of such Equity Securities.
(3) Each Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed the life of the Trusts (approximately five years). The
estimated organizational and offering costs are based on 2,000,000 Units
of each Trust expected to be issued. To the extent the number of Units
issued is larger or smaller, the estimate will vary.
(4) Represents the amount of mandatory distributions from each Trust
($.35 per Unit), payable to the Sponsor in five equal monthly
installments beginning on November 28, 1997, and on the last business
day of each month thereafter through March 31, 1998. If Units are
redeemed prior to March 31, 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 4.5% of the Public Offering Price (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
Page 47
Schedule of Investments
COMMUNICATIONS GROWTH TRUST SERIES
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
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 Share to Trust (2)
_________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
COMPUTER NETWORKING
192 COMS 3COM Corporation 3.99% $31.125 $ 5,976
139 ASND Ascend Communications, Inc. 3.93% 42.375 5,890
190 CS Cabletron Systems, Inc. 3.98% 31.375 5,961
119 CSCO Cisco Systems, Inc. 3.99% 50.250 5,980
COMMUNICATIONS EQUIPMENT
222 ADCT ADC Telecommunications, Inc. 3.99% 26.875 5,966
215 ADTN ADTRAN, Inc. 4.22% 29.375 6,316
115 LU Lucent Technologies, Inc. 4.00% 52.125 5,994
102 MOT Motorola, Inc. 3.99% 58.625 5,980
91 NT Northern Telecom Limited (3) 3.97% 65.375 5,949
146 TLAB Tellabs, Inc. 3.99% 40.875 5,968
COMMUNICATIONS SERVICES
254 ATI Airtouch Communications, Inc. 4.05% 23.875 6,064
104 AIT Ameritech Corporation 4.04% 58.125 6,045
148 BLS BellSouth Corporation 4.02% 40.625 6,013
199 CTC Compania de Telefonos de Chile S.A. (ADR) 3.95% 29.750 5,920
337 HKT Hong Kong Telecommunications, Ltd. (ADR) 4.00% 17.750 5,982
349 LCI LCI International, Inc. 3.91% 16.750 5,846
104 RTRSY Reuters Holdings plc (ADR) 4.00% 57.625 5,993
117 SBC SBC Communications, Inc. 4.02% 51.375 6,011
83 TEF Telefonica de Espana S.A. (ADR) 4.00% 72.125 5,986
147 TMX Telefonos de Mexico S.A. (ADR) 4.04% 41.125 6,045
136 VOD Vodafone Group plc (ADR) 3.97% 43.750 5,950
263 WCOM WorldCom, Inc. 4.00% 22.750 5,983
WIRELESS COMMUNICATIONS
166 ANDW Andrew Corporation 4.02% 36.250 6,018
181 ERICY LM Ericsson AB (ADR) 3.99% 33.000 5,973
105 NOK/A Oy Nokia AB (ADR) 3.94% 56.250 5,906
______ ________
Total Investments 100% $149,715
====== ========
</TABLE>
[FN]
_____________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on April 15, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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
$149,715. Cost and profit to Sponsor relating to the Equity Securities
sold to the Trust were $149,575 and $140, respectively.
(3) This Equity Security is a U.S. dollar denominated common stock of a
Canadian company that trades directly on a United States national
securities exchange.
Page 48
Schedule of Investments
ENERGY GROWTH TRUST, SERIES 2
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
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 Share to Trust (2)
_________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
NATURAL GAS
162 ENE Enron Corporation 4.02% $ 37.125 $ 6,014
117 SNT Sonat, Inc. 3.99% 51.000 5,967
OIL AND GAS, PRODUCTION
192 APA Apache Corporation 3.98% 31.000 5,952
172 NEV Nuevo Energy Company 4.01% 34.875 5,998
OILFIELD SERVICES AND EQUIPMENT
580 DIVE American Oilfield Divers, Inc. 4.07% 10.500 6,090
129 BJS BJ Services Company 4.02% 46.625 6,015
169 BHI Baker Hughes, Inc. 4.03% 35.625 6,021
162 FLC Falcon Drilling Company, Inc. 3.98% 36.750 5,954
292 GLM Global Marine, Inc. 3.98% 20.375 5,950
399 IO Input/Output, Inc. 4.00% 15.000 5,985
301 NBR Nabors Industries, Inc. 3.95% 19.625 5,907
270 RB Reading & Bates Corporation 4.00% 22.125 5,974
297 RDC Rowan Companies, Inc. 4.02% 20.250 6,014
58 SLB Schlumberger, Ltd. 4.05% 104.250 6,046
131 TDW Tidewater, Inc. 3.99% 45.500 5,960
92 RIG Transocean Offshore, Inc. 3.75% 60.875 5,600
101 WAI Western Atlas, Inc. 3.98% 58.875 5,946
OILS, INTEGRATED
74 AN Amoco Corporation 4.02% 81.250 6,013
94 CHV Chevron Corporation 4.03% 64.125 6,028
115 XON Exxon Corporation 4.02% 52.250 6,009
49 MOB Mobil Corporation 4.06% 123.875 6,070
140 REP Repsol S.A. (ADR) 3.99% 42.625 5,967
35 RD Royal Dutch Petroleum Company (3) 4.04% 172.625 6,042
58 TX Texaco, Inc. 4.02% 103.500 6,003
228 YPF YPF Socied Anonima (ADR) 4.00% 26.250 5,985
______ ________
Total Investments 100% $149,510
====== ========
</TABLE>
[FN]
_______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on April 15, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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
$149,510. Cost and loss to Sponsor relating to the Equity Securities
sold to the Trust were $149,636 and $126, respectively.
(3) This Equity Security is a U.S. dollar denominated common stock of a
Dutch company that trades directly on a United States national
securities exchange.
Page 49
Schedule of Investments
INVESTMENT SERVICES GROWTH TRUST SERIES
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
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 Share to Trust (2)
_________ _______________________________________ ____________ _______ ____________
<S> <C> <C> <C> <C>
461 ADV Advest Group, Inc. 3.92% $12.625 $ 5,820
208 BSC Bear Stearns Companies, Inc. 4.04% 28.875 6,006
164 DWD Dean Witter, Discover and Company 3.99% 36.125 5,925
152 DLJ Donaldson Lufkin & Jenrette, Inc. 4.00% 39.125 5,947
132 EV Eaton Vance Corp. 4.00% 45.000 5,940
172 AGE A.G. Edwards, Inc. 3.99% 34.500 5,934
265 EVR EVEREN Capital Corporation 3.99% 22.375 5,929
383 FVH Fahnestock Viner Holdings, Inc. (3) 3.99% 15.500 5,936
110 BEN Franklin Resources, Inc. 4.00% 54.000 5,940
332 HMQ Hambrecht & Quist Group 4.02% 18.000 5,976
169 IFI Interra Financial, Inc. 4.02% 35.375 5,978
138 JEF Jefferies Group, Inc. 4.00% 43.125 5,951
129 LM Legg Mason, Inc. 4.05% 46.625 6,015
183 LEH Lehman Brothers Holdings, Inc. 4.00% 32.500 5,948
159 MDD McDonald & Company Investments 3.99% 37.250 5,923
67 MER Merrill Lynch & Company, Inc. 4.07% 90.250 6,047
360 MOR Morgan Keegan, Inc. 3.97% 16.375 5,895
186 PWJ Paine Webber Group Inc. 4.01% 32.000 5,952
339 PJC Piper Jaffray Companies, Inc. 3.99% 17.500 5,932
152 TROW T. Rowe Price Associates 4.05% 39.625 6,023
278 BQR Quick & Reilly Group, Inc. 4.00% 21.375 5,942
272 RJF Raymond James Financial, Inc. 4.00% 21.875 5,950
173 SCH Charles Schwab Corporation 3.97% 34.125 5,904
349 SWST Southwest Securities Group, Inc. 3.88% 16.500 5,759
120 TRV Travelers Group, Inc. 4.06% 50.250 6,030
______ ________
Total Investments 100% $148,602
====== ========
</TABLE>
[FN]
_____________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on April 15, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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
$148,602. Cost and loss to Sponsor relating to the Equity Securities
sold to the Trust were $148,916 and $314, respectively.
(3) This Equity Security is a U.S. dollar denominated common stock of a
Canadian company that trades directly on a United States national
securities exchange.
Page 50
Schedule of Investments
OUTSOURCING GROWTH TRUST SERIES
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
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 Share to Trust (2)
_________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
BUSINESS SERVICES
257 APAC APAC Teleservices, Inc. 4.06% $23.375 $ 6,007
228 POS Catalina Marketing Corporation 3.99% 25.875 5,900
227 PK Central Parking Corporation 3.99% 26.000 5,902
297 UNF UniFirst Corporation 3.99% 19.875 5,903
ELECTRONICS MANUFACTURING
116 SCI SCI Systems, Inc. 3.97% 50.625 5,872
123 SANM Sanmina Corporation 3.87% 46.500 5,720
116 SLR Solectron Corporation 4.00% 51.000 5,916
INFORMATION SERVICES
295 ABRX ABR Information Systems, Inc. 4.06% 20.375 6,011
233 ANLY Analysts International Corporation 4.05% 25.750 6,000
140 AUD Automatic Data Processing, Inc. (ADP) 4.07% 43.000 6,020
152 EDS Electronic Data Systems Corporation 3.98% 38.750 5,890
211 EFX Equifax, Inc. 3.99% 28.000 5,908
172 FIC Fair Isaac & Company, Inc. 4.02% 34.625 5,955
183 FDC First Data Corporation 4.07% 32.875 6,016
159 KEA Keane, Inc. 4.06% 37.750 6,002
133 PAYX Paychex, Inc. 4.02% 44.750 5,952
136 SNDT SunGard Data Systems, Inc. 3.95% 43.000 5,848
STAFFING
321 ASI AccuStaff, Inc. 4.04% 18.625 5,979
170 CDI CDI Corporation 4.04% 35.125 5,971
161 RHI Robert Half International, Inc. 3.98% 36.625 5,897
167 IS Interim Services, Inc. 4.03% 35.750 5,970
157 MAN Manpower, Inc. 4.01% 37.750 5,927
240 NRL Norrell Corporation 4.01% 24.750 5,940
219 ASGN On Assignment, Inc. 4.07% 27.500 6,022
272 ROMC Romac International, Inc. 3.68% 20.000 5,440
______ ________
Total Investments 100% $147,968
====== ========
</TABLE>
[FN]
______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on April 15 and 16, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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
$147,968. Cost and loss to Sponsor relating to the Equity Securities
sold to the Trust were $148,736 and $768, respectively.
Page 51
Schedule of Investments
Small-Cap Growth Trust Series
The First Trust Special Situations Trust, Series 193
At the Opening of Business on the Initial Date of Deposit
April 16, 1997
<TABLE>
<CAPTION>
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 Share to Trust (2)
_________ _______________________________________ ____________ _______ ____________
<S> <C> <C> <C> <C>
218 AAM Aames Financial Corporation 2.65% $18.250 $ 3,979
115 AEIC Air Express International, Inc. 2.49% 32.500 3,738
71 ABIG American Bankers Insurance Group, Inc. 2.51% 53.000 3,763
106 BWC Belden, Inc. 2.47% 35.000 3,710
137 BHE Benchmark Electronics, Inc. 2.48% 27.125 3,716
163 BILL Billing Information Concepts 2.50% 23.000 3,749
105 CMT CMAC Investment Corporation 2.49% 35.500 3,728
362 CAV Cavalier Homes, Inc. 2.41% 10.000 3,620
147 DAYR Day Runner, Inc. 2.54% 25.875 3,804
103 ENCD ENCAD, Inc. 2.53% 36.875 3,798
105 ESRX Express Scripts, Inc. 2.54% 36.250 3,806
108 FIC Fair Isaac & Company, Inc. 2.49% 34.625 3,739
330 FRES Fresh America Corporation 2.53% 11.500 3,795
206 GNTX Gentex Corporation 2.49% 18.125 3,734
195 JKHY Jack Henry & Associates 2.44% 18.750 3,656
124 INVX Innovex, Inc. 2.47% 29.875 3,705
130 KCS KCS Energy, Inc. 2.50% 28.875 3,754
238 MLBC ML Bancorp, Inc. 2.54% 16.000 3,808
116 MCRS MICROS Systems, Inc. 2.48% 32.000 3,712
97 MLI Mueller Industries, Inc. 2.47% 38.125 3,698
120 BLDG NCI Building Systems, Inc. 2.46% 30.750 3,690
108 NEV Nuevo Energy Company 2.51% 34.875 3,766
139 OMP OM Group, Inc. 2.53% 27.250 3,788
201 OSSI Outback Steakhouse, Inc. 2.50% 18.625 3,744
316 PMTS PMT Services, Inc. 2.53% 12.000 3,792
167 PHXX Phoenix International Inc. 2.59% 23.250 3,883
129 REGL Regal Cinemas, Inc. 2.49% 29.000 3,741
175 RXT Renal Treatment Centers, Inc. 2.49% 21.375 3,741
178 RFH Richfood Holdings Inc. 2.48% 20.875 3,716
91 ROP Roper Industries, Inc. 2.47% 40.750 3,708
252 ROTC Rotech Medical Corporation 2.52% 15.000 3,780
126 SPSS SPSS, Inc. 2.51% 29.875 3,764
89 SJK St. John Knits, Inc. 2.49% 41.875 3,727
130 SMOD Smart Modular Technologies, Inc. 2.49% 28.750 3,737
161 TRK Speedway Motorsports, Inc. 2.48% 23.125 3,723
227 SPOR Sport-Haley, Inc. 2.50% 16.500 3,745
164 UTEK Ultratech Stepper, Inc. 2.45% 22.375 3,669
186 UNF UniFirst Corporation 2.46% 19.875 3,697
179 VTRA Vectra Banking Corporation 2.54% 21.250 3,804
154 WAT Waters Corporation 2.49% 24.250 3,734
______ ________
Total Investments 100% $149,961
====== ========
</TABLE>
[FN]
_______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on April 15, 1997.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the 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
$149,961. Cost and loss to Sponsor relating to the Equity Securities
sold to the Trust were $150,151 and $190, respectively.
Page 52
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Page 54
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Page 55
CONTENTS:
Summary of Essential Information:
Communications Growth Trust Series 4
Energy Growth Trust, Series 2 4
Investment Services Growth Trust Series 4
Outsourcing Growth Trust Series 5
Small-Cap Growth Trust Series 5
The First Trust Special Situations Trust, Series 193:
What is The First Trust Special Situations Trust? 9
What are the Expenses and Charges? 12
What is the Federal Tax Status of Unit Holders? 13
Why are Investments in the Trusts Suitable for
Retirement Plans? 17
Portfolio:
What are Equity Securities? 17
Risk Factors 17
What are the Equity Securities Selected for:
Communications Growth Trust Series? 22
Energy Growth Trust, Series 2? 25
Investment Services Growth Trust Series? 26
Outsourcing Growth Trust Series? 28
Small-Cap Growth Trust Series? 30
What are Some Additional Considerations for 33
Investors?
Public Offering:
How is the Public Offering Price Determined? 34
How are Units Distributed? 36
What are the Sponsor's Profits? 37
Will There be a Secondary Market? 38
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 38
How are Income and Capital Distributed? 38
What Reports will Unit Holders Receive? 39
How May Units be Redeemed? 39
How May Units be Purchased by the Sponsor? 41
How May Equity Securities be Removed from a Trust? 41
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 42
Who is the Trustee? 42
Limitations on Liabilities of Sponsor and Trustee 43
Who is the Evaluator? 43
Other Information:
How May the Indenture be Amended or Terminated? 43
Legal Opinions 44
Experts 44
Report of Independent Auditors 45
Statements of Net Assets:
Communications Growth Trust Series 46
Energy Growth Trust, Series 2 46
Investment Services Growth Trust Series 46
Outsourcing Growth Trust Series 47
Small-Cap Growth Trust Series 47
Schedules of Investments:
Communications Growth Trust Series 48
Energy Growth Trust, Series 2 49
Investment Services Growth Trust Series 50
Outsourcing Growth Trust Series 51
Small-Cap Growth Trust Series 52
_____________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
COMMUNICATIONS GROWTH TRUST SERIES
ENERGY GROWTH TRUST, SERIES 2
INVESTMENT SERVICES GROWTH TRUST SERIES
OUTSOURCING GROWTH TRUST SERIES
SMALL-CAP GROWTH TRUST SERIES
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
April 16, 1997
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 56
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 205
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 193, which is the
current fund, and The First Trust Special Situations Trust,
Series 205, 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
Series 193 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, The First Trust Special Situations Trust, Series
205 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 June 25, 1997.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 205
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director of
Nike Securities June 25, 1997
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 205 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
