SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 2 to
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 217
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.
FT 217
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The FT Series
of trust
6. Execution and termination The FT Series;
of trust agreement 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 FT Series
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The FT Series
11. Types of securities comprising The FT Series
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The FT Series
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The FT
Series; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The FT Series
by depositor, principal
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The FT Series; Rights of
Unit Holders
17. Withdrawal or redemption The FT Series; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The FT Series;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The FT
Series; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The FT Series
50. Trustee's lien The FT Series
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The FT Series; Rights
agreement with respect of Unit Holders
to selection or elimination
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The FT Series; Rights
substitution or elimination of Unit Holders
of underlying securities
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The FT Series
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED SEPTEMBER 9, 1997
AS AMENDED SEPTEMBER 22, 1997
First Trust (registered trademark)
ENERGY GROWTH TRUST, SERIES 3
BLUE CHIP INTERNATIONAL GROWTH TRUST, SERIES 1
INTERNET GROWTH TRUST, SERIES 3
INVESTMENT SERVICES GROWTH TRUST, SERIES 2
RETAIL GROWTH TRUST, SERIES 2
SMALL-CAP GROWTH TRUST, SERIES 2
The Trusts. FT 217 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts" and 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" for each Trust. 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 FT Series?" 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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
Nike Securities L.P.
Sponsor of First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is ______, 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 % of the Public Offering Price and the
maximum remaining deferred sales charge, initially $ per Unit.
Commencing on ______, 1998, and on the last business day of each month
thereafter, through ______, 1998, a deferred sales charge of $ will
be assessed per Unit per month. Units purchased subsequent to the
initial deferred sales charge payment but still during the initial
offering period will be 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 $_____. The total maximum sales charge assessed to
Unit holders on a per Unit basis will be % of the Public Offering
Price (equivalent to % of the net amount invested, exclusive of the
deferred sales charge), subject to a reduction beginning ______, 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 ($250 for Individual
Retirement Accounts). 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 % of the Public Offering Price
(equivalent to % of the net amount invested), which will be reduced
by 1/2 of 1% on each ______, commencing ______, 1998 to a minimum sales
charge of %. 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" for
each Trust. 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 either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of 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
Page 2
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
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-______, 1997
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Energy International Internet
Growth Trust Growth Trust Growth Trust
Series 3 Series 1 Series 3
______________ _____________ ____________
<S> <C> <C> <C>
General Information
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of
Equity Securities in Portfolio (2) $ $ $
Aggregate Offering Price Evaluation of Equity Securities per Unit $ $ $
Maximum Sales Charge of % of the Public Offering Price
per Unit ( % of the net amount invested, exclusive
of the deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $ ( ) $ ( ) $ ( )
Public Offering Price per Unit (3) $ $ $
Sponsor's Initial Repurchase Price per Unit $ $ $
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less deferred sales charge) (4) $ $ $
CUSIP Number
Trustee's Annual Fee per Unit outstanding $ ____ $ ____ $ ____
Evaluator's Annual Fee per Unit outstanding (5) $ ____ $ ____ $ ____
Maximum Supervisory Fee per Unit outstanding (6) $ ____ $ ____ $ ____
Estimated Annual Amortization of Organizational and
Offering Costs per Unit outstanding (7) $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date ______, 1997
Mandatory Termination Date ______, 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 initial offering period.
Income Distribution Record Date Fifteenth day of each June and December commencing ______, 1997.
Income Distribution Date (8) Last day of each June and December commencing ______, 1997.
_____________
<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 listed Equity Security 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 % of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $___ 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 $ per Unit per month commencing ______, 1998 and on
the last business day of each month thereafter through ______, 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 ______, 1998, the
secondary market sales charge will not include the deferred sales charge
payments but will instead include only a one-time initial sales charge
of % of the Public Offering Price and will decrease by 1/2 of 1% on
each subsequent ______, commencing ______, 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 $____ 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.
</FN>
</TABLE>
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-______, 1997
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
Investment
Services Retail Small-Cap
Growth Trust Growth Trust Growth Trust
Series 2 Series 2 Series 2
___________ ___________ ___________
<S> <C> <C> <C>
General Information
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/ 1/ 1/
Public Offering Price:
Aggregate Offering Price Evaluation of
Equity Securities in Portfolio (2) $ $ $
Aggregate Offering Price Evaluation of Equity Securities per Unit $ $ $
Maximum Sales Charge of % of the Public Offering Price
per Unit ( % of the net amount invested, exclusive
of the deferred sales charge) (3) $ $ $
Less Deferred Sales Charge per Unit $ ( ) $ ( ) $( )
Public Offering Price per Unit (3) $ $ $
Sponsor's Initial Repurchase Price per Unit $ $ $
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less deferred sales charge) (4) $ $ $
CUSIP Number
Trustee's Annual Fee per Unit outstanding $ ____ $ ____ $ ____
Evaluator's Annual Fee per Unit outstanding (5) $ ____ $ ____ $ ____
Maximum Supervisory Fee per Unit outstanding (6) $ ____ $ ____ $ ____
Estimated Annual Amortization of Organizational and
Offering Costs per Unit outstanding (7) $ $ $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date ______, 1997
Mandatory Termination Date ______, 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 initial offering period.
Income Distribution Record Date Fifteenth day of each month for the Retail Growth Trust, Series 2 commencing
August 15, 1997 and the fifteenth day of each June and December commencing
______, 1997 for the Small-Cap Growth Trust, Series 2.
Income Distribution Date (8) Last day of each month for the Retail Growth Trust, Series 2 commencing August
29, 1997 and the last day of each June and December commencing ______, 1997
for the Small-Cap Growth Trust, Series 2.
_____________
<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 listed Equity Security 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 % of the Public Offering Price and the amount
of the maximum remaining deferred sales charge (initially $___ 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 $ per Unit per month commencing ______, 1998 and on
the last business day of each month thereafter through ______, 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 ______, 1998, the
secondary market sales charge will not include the deferred sales charge
payments but will instead include only a one-time initial sales charge
of % of the Public Offering Price and will decrease by 1/2 of 1% on
each subsequent ______, commencing ______, 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 $____ 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.
</FN>
</TABLE>
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 approximately five years and are unit investment trusts
rather than a mutual fund, this information is presented to permit a
comparison of fees.
<TABLE>
<CAPTION>
ENERGY GROWTH TRUST, SERIES 3
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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</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 Energy Growth Trust, Series 3 has an estimated operating
expense ratio of % and a 5% annual return on the investment
throughout the periods $ $ $
</TABLE>
<TABLE>
<CAPTION>
BLUE CHIP INTERNATIONAL GROWTH TRUST, SERIES 1
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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</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 Blue Chip International Growth Trust, Series 1 has
an estimated operating expense ratio of % and a 5% annual return
on the investment throughout the periods $ $ $
</TABLE>
<TABLE>
<CAPTION>
INTERNET GROWTH TRUST, SERIES 3
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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</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 Internet Growth Trust, Series 3 has an estimated operating
expense ratio of % and a 5% annual return on the investment throughout
the periods $ $ $
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT SERVICES 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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</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 Investment Services Growth Trust, Series 2 has an estimated
operating expense ratio of % and a 5% annual return on the investment
throughout the periods $ $ $
</TABLE>
<TABLE>
<CAPTION>
RETAIL 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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</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 Retail Growth Trust, Series 2 has an estimated operating
expense ratio of % and a 5% annual return on the investment throughout
the periods $ $ $
</TABLE>
<TABLE>
<CAPTION>
SMALL-CAP 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 % $
Portfolio supervision, bookkeeping, administrative, amortization of
organizational and offering expenses and evaluation fees %
Other operating expenses %
________ ________
Total % $
======== ========
</TABLE>
Page 8
<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 2 has an estimated operating
expense ratio of % and a 5% annual return on the investment throughout
the periods $ $ $
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. For purposes
of the examples, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
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 % and the maximum remaining deferred
sales charge (initially $ per Unit) and would exceed 1.0% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $ per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing ______, 1998 through
______, 1998. If a Unit holder sells or redeems Units before all of
these deductions have been made, the balance of the deferred sales
charge payments remaining will be deducted from the sales or redemption
proceeds. If the Unit price 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.
</FN>
</TABLE>
Page 9
ENERGY GROWTH TRUST, SERIES 3
BLUE CHIP INTERNATIONAL GROWTH TRUST, SERIES 1
INTERNET GROWTH TRUST, SERIES 3
INVESTMENT SERVICES GROWTH TRUST, SERIES 2
RETAIL GROWTH TRUST, SERIES 2
SMALL-CAP GROWTH TRUST, SERIES 2
FT 217
What is the FT Series?
FT 217 is one of a series of investment companies created by the Sponsor
under the name of the FT Series, all of which are generally similar, but
each of which is separate and is designated by a different series
number. The FT Series was previously known as The First Trust Special
Situations Trust Series. 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 (the
"Equity Securities"), together with an irrevocable letter or letters of
credit of a financial institution in an amount at least equal to the
purchase price of such 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.
Energy Growth Trust, Series 3
The objective of the Energy Growth Trust, Series 3 (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.
Page 10
Blue Chip International Growth Trust, Series 1
The objective of the Blue Chip International Growth Trust, Series 1 (the
"International Growth Trust") is to provide for potential capital
appreciation through an investment in a diversified portfolio of foreign
companies which the Sponsor believes will significantly expand an
investor's choices and opportunity to participate in the long-term
growth potential of foreign companies. See "What are the Equity
Securities"? There is, of course, no guarantee that the objectives of
the Trust will be achieved. Of the 100 largest companies in the world,
46% reside outside the United States. Furthermore, a number of foreign
economies are growing at a faster rate than the United States. The
portfolio of the Blue Chip International Growth Trust is diversified
across many industry sectors and countries. Diversifying a portfolio
helps to offset the risks normally associated with equity investments,
however, an investment in foreign securities should be made with an
understanding of the additional risks involved, such as currency
fluctuation, political risk, the lack of adequate financial information
and exchange control restrictions impacting foreign issuers.
In addition to providing access to expanding markets and companies,
international investing can add a measure of diversification to an
investor's portfolio. The portfolio for the Trust has been chosen using
database screening techniques, fundamental analysis and the judgment of
the research analysts at Nike Securities L.P.
In general, the Sponsor believes the Trust will provide the investor
access to expanding markets across the globe; diversification across
several developed countries; diversification across several industries;
a portfolio of well capitalized, attractively priced, global blue chip
companies. Although risk cannot be entirely eliminated from an
investment in foreign equity securities, it can be reduced by
diversifying the Trust's portfolio across many industry sectors and
countries. While the companies selected for the Trust are chosen for
their potential to provide above average returns, there is no assurance
that the Trust's objectives will be met.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the International Growth Trust. There is no assurance that
the objective of the International Growth Trust will be achieved.
Internet Growth Trust, Series 3
The objective of the Internet Growth Trust, Series 3 (the "Internet
Growth Trust") is to provide for potential capital appreciation through
an investment in equity securities issued by companies that, in the
opinion of the Sponsor, are best positioned to take advantage of the
rapid growth of the Internet. See "What are Equity Securities?" There
is, of course, no guarantee that the objectives of the Trust will be
achieved. The portfolio of the Internet Growth Trust is diversified
across many related sectors: computer networking, communications
equipment, communications services, computer software, computers,
semiconductors and information providers. Diversifying a portfolio helps
to offset the risks normally associated with equity investments,
although risk cannot be entirely eliminated. This type of
diversification provides a convenient, efficient way for the investor to
own several stocks without considerable time and capital commitments.
In the Sponsor's opinion, the growing numbers of users and web sites
along with expanding capabilities makes the Internet Growth Trust an
attractive investment opportunity. The number of people connecting to
the worldwide Web is growing daily. More people are signing up with
Internet access companies, and still more are upgrading their computers
to make Internet linkage possible. Currently, more than 40 million users
from 170 countries enjoy Internet access. Moreover, many of the current
250 million personal-computer owners around the world are expected to
connect in the next three years, boosting user totals to more than 160
million by the year 2000. Furthermore, nearly 3,000 web sites are being
added to the Internet every day. As of March 1997, there were 1.2
million registered sites, 900,000 of which were created over the
previous 12 months. Corporations have made huge strides in the way they
conduct business-to-business transactions over the Internet, making it
more commercially feasible for the mass market. Previously, only about
2% of America's six million companies were able to link buyers and
suppliers to order and pay for services and merchandise by purchasing
expensive private phone networks. As the Internet continues to expand
its scope and becomes easier to use, electronic banking is anticipated
to be another significant area of growth.
Page 11
The companies selected for the Internet Growth Trust have been
researched and evaluated using database screening techniques,
fundamental analysis, and the judgment of research experts at Nike
Securities L.P. To help reduce risk, the Internet Growth Trust avoids
small companies, newly-issued stocks, and stocks with little or no
earnings. In general, the Sponsor believes the companies selected have
above-average growth prospects for both sales and earnings, and lower
than average debt.
The Sponsor believes that the enormous growth potential of the Internet
offers a compelling investment opportunity. However, since the Internet
is in the early stages of its development and the direction of its
evolution is unpredictable, there exist tremendous risks. It is
important to note that companies engaged in business related to the
Internet are subject to fierce competition and their products and
services may be subject to rapid obsolescence.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Internet Growth Trust. There is no assurance that the
objective of the Internet Growth Trust will be achieved.
Investment Services Growth Trust, Series 2
The objective of the Investment Services Growth Trust (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. There is no assurance
that the objective of the Investment Services Trust will be achieved.
Retail Growth Trust, Series 2
The objective of the Trust is to provide for potential capital
appreciation through an investment in equity securities issued by retail
companies incorporated or headquartered in the United States (the
"Equity Securities"). The Retail Growth Trust is a unit investment trust
investing in a diversified portfolio of common stocks of U.S. based
companies in the retail sector. The Sponsor believes the companies
chosen are currently undervalued and are the best positioned for long-
term earnings growth in the current retail environment.
The companies selected for the Retail Growth Trust have been researched
and evaluated using database screening techniques, fundamental analysis
and the judgment of research experts at Nike Securities L.P., Sponsor of
the Trust. To help reduce risk, the Trust avoids small market
capitalization companies, newly-issued stocks and stocks with little or
no earnings. In general, the Sponsor believes the companies chosen for
this Trust have above-average growth prospects for both sales and
earnings.
The portfolio is diversified both by geographic region and by different
areas of the retail sector. Although risk cannot be entirely eliminated,
Page 12
the risks normally associated with equity investments can be offset by
diversification. This type of diversification provides a convenient,
efficient way to own several stocks without considerable time and
capital commitments on your part.
In the Sponsor's opinion, the stocks selected are of undervalued
companies with attractive growth prospects. While the stock market
performance of retail companies has improved over the past year (nearly
keeping pace with the overall equity market), retail shares have
generally lagged the stock market over the past several years. This
gives investors an opportunity to purchase quality companies at a lower
price. As investor sentiment improves towards the retail sector, the
Sponsor believes a portfolio of industry leading retailers with above-
average growth prospects offers value and growth potential for the future.
The portfolio has been carefully selected to include retailers that have
demonstrated the ability to consistently provide the best combination of
price, selection and service. The Sponsor believes it is these
innovative retailers that will be able to successfully expand their
market share.
Moreover, the Sponsor believes growth in the retailing sector will come
from the following:
- - Opening of new stores;
- - Increasing sales volume at existing locations;
- - Raising of profit margins through efficiency gains and
enhanced use of technology;
- - Expansion of retailing concepts in a global economy.
See "Schedule of Investments" and "What are Equity Securities?-Risk
Factors" for the Retail Growth Trust. There is no assurance that the
objective of the Retail Growth Trust will be achieved.
Small-Cap Growth Trust, Series 2
The objective of the Small-Cap Growth Trust (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. There is 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
of Essential Information." There is, of course, no guarantee that the
objective of any Trust will be achieved. 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
Page 13
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 the Trusts, 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 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
Page 14
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.
Certain or all 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
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
Page 15
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 closest to the date the Unit holder
purchases his Units) in order to determine his tax basis for his pro
rata portion of each Equity Security held by such Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by a Trust is taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceed such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, 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 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.
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
Page 16
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.
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
advisers with regard to any 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
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
Page 17
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 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
paid with respect to such Equity Security are received by a Trust which
are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by a Trust to such Unit holder (including amounts received
upon the redemption of Units) will be subject to back-up withholding.
Distributions by a Trust will generally be subject to United States
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of dividends
includable in the Unit holder's gross income and amounts of Trust
expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trusts Suitable for
Retirement Plans?"
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.
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 Stock Market or
traded in the over-the-counter market. See "What are the Equity
Page 18
Securities Selected for Energy Growth Trust, Series 3?," "What are the
Equity Securities Selected for Blue Chip International Growth
Trust, Series 1?," "What are the Equity Securities Selected for Internet
Growth Trust, Series 3?," "What are the Equity Securities Selected for
Investment Services Growth Trust, Series 2?," "What are the Equity
Securities Selected for Retail Growth Trust, Series 2?" and "What are
the Equity Securities Selected for Small-Cap Growth Trust, Series 2?"
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.
Energy Growth Trust, Series 3. 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
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
Page 19
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.
Blue Chip International Growth Trust, Series 1. An investment
in Units of the Blue Chip International Growth Trust should be
made with an understanding of the risks such an investment may entail.
Since the Equity Securities in the Trust consist of securities of
foreign issuers, 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 the foreign issuers that are not 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 Equity Securities
included in the Trust, the Sponsor believes that adequate information
will be available to allow the Portfolio Supervisor to provide portfolio
surveillance.
On the basis of the best information available to the Sponsor at the
present time, none of the Equity Securities are subject to exchange
control restrictions under existing law which would materially interfere
with payment to the Trust of dividends due on, or proceeds from the sale
of, the Equity Securities. However, there can be no assurance that
exchange control regulations might not be adopted in the future which
might adversely affect payment to the Trust. In addition, the adoption
of exchange control regulations and other legal restrictions could have
an adverse impact on the marketability of international securities in
the Trust and on the ability of the Trust to satisfy its obligation to
redeem Units tendered to the Trustee for redemption.
Internet Growth Trust, Series 3. The Internet Growth Trust, Series 3
concentrates its Equity Securities in the technology industry and, as a
result, the value of the Units of the Trust may be susceptible to
factors affecting the technology industry.
Page 20
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers, computer-related
equipment, computer networks, communications systems, telecommunications
products, electronic products and other related products, systems and
services. The market for these products, especially those specifically
related to the Internet, 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. 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 common stock, 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 at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Equity Securities will obtain orders of similar magnitude as past orders
from other customers. Similarly, the success of certain technology
companies is tied to a relatively small concentration of products or
technologies. Accordingly, a decline in demand of such products,
technologies or from such customers could have a material adverse impact
on issuers of the Equity Securities.
Many technology 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. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the securities in
the Trust.
Investment Services Growth Trust, Series 2. An investment in Units of
the Investment Services Trust should be made with an understanding of
the problems and 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 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
Page 21
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.
Retail Growth Trust, Series 2. An investment of Units of the Retail
Growth Trust should be made with an understanding of the problems and
risks inherent in the retail industry in general. The profitability of
companies engaged in the retail industry will be affected by various
factors including the general state of the economy and consumer spending
trends. Recently, there have been major changes in the retail
environment due to the declaration of bankruptcy by some of the major
corporations involved in the retail industry, particularly the
department store segment. The continued viability of the retail industry
will depend on the industry's ability to adapt and to compete in
changing economic and social conditions, to attract and retain capable
management, and to finance expansion. Weakness in the banking or real
estate industry, a recessionary economic climate with the consequent
slowdown in employment growth, less favorable trends in unemployment or
a marked deceleration in real disposable personal income growth could
result in significant pressure on both consumer wealth and consumer
confidence, adversely affecting consumer spending habits. In addition,
competitiveness of the retail industry will require large capital
outlays for investment in the installation of automated checkout
equipment to control inventory, to track the sale of individual items
and to gauge the success of sales campaigns. Increasing employee and
retiree benefit costs may also have an adverse effect on the industry.
In many sectors of the retail industry, competition may be fierce due to
market saturation, converging consumer tastes and other factors. Because
of these factors and the recent increase in trade opportunities with
other countries, American retailers are now entering global markets
which entail added risks such as sudden weakening of foreign economies,
difficulty in adapting to local conditions and constraints and added
research costs.
Small-Cap Growth Trust, Series 2. 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
Page 22
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.
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.
Page 23
Certain of the securities in Blue Chip International Growth
Trust, Series 1 and Investment Services Growth Trust, Series 2 are 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 Energy Growth Trust, Series 3?
OIL AND GAS - DRILLING
Diamond Offshore Drilling, headquartered in Houston, Texas, performs
contract drilling of offshore oil and gas wells. The company operates a
fleet of mobile offshore drilling rigs, including semisubmersible rigs,
deployed in Australia, the Black Sea, the Gulf of Mexico, the North Sea,
South America and Southeast Asia.
Ensco International Inc., headquartered in Dallas, Texas, conducts
contract drilling and marine transportation services for the oil and gas
industry in the Gulf of Mexico, the North Sea and Venezuela.
Falcon Drilling Company, Inc., headquartered in Houston, Texas, provides
contract drilling and workover services for the domestic and
Page 24
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.
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, support services and offshore drilling
services in the major offshore markets.
Noble Affiliates, Inc., headquartered in Ardmore, Oklahoma, through
subsidiaries, explores for, develops and markets oil and gas in the
United States including the Gulf of Mexico, as well as internationally,
mainly in the U.K. sector of the North Sea, Argentina, Canada and
Equatorial Guinea. The company also markets oil and natural gas for
itself and others.
Rowan Companies, Inc., headquartered in Houston, Texas, operates oil and
gas drilling rigs worldwide as well as a fleet of helicopters and fixed-
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.
Transocean Offshore Inc., headquartered in Houston, Texas, provides
contract drilling of oil and gas wells in offshore areas throughout the
world and provides related services, including well engineering and
planning, platform drilling, well intervention, engineering and
construction services.
OIL AND GAS - EXPLORATION AND PRODUCTIONS
Noble Affiliates, Inc., headquartered in Ardmore, Oklahoma, through
subsidiaries, explores for, develops and markets oil and gas in the
United States including the Gulf of Mexico, as well as internationally,
mainly in the U.K. sector of the North Sea, Argentina, Canada and
Equatorial Guinea. The company also markets oil and natural gas for
itself and others.
Nuevo Energy Company, headquartered in Houston, Texas, explores and
produces oil and natural gas properties mainly in Alabama, California,
the Gulf of Mexico, Mississippi, Nevada, Texas and the Republic of Congo
in West Africa and owns and operates gas plants, pipeline facilities and
other oil and gas related assets.
OIL - FIELD SERVICES
BJ Services Co., 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.
Global Industries, Ltd., headquartered in Lafayette, Louisiana, provides
pipeline construction, platform installation and removal and diving
services, mainly to the offshore oil and gas industry in the U.S. Gulf
of Mexico. The company also transports oilfield equipment and pipe; and
offers well control services worldwide.
Schlumberger Industries, Inc., headquartered in New York, New York,
through subsidiaries, provides oilfield services to the petroleum
industry, including measurement of physical properties of underground
formations, well testing, pressure measurements, perforating, completion
and workover services, reservoir evaluation and data services.
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.
Tuboscope Inc., headquartered in Houston, Texas, provides oilfield
tubular coating and inspection services, oilfield solids control
services and coiled tubing equipment to the international petroleum
industry. The company also supplies inspection equipment to
manufacturers of tubular goods. The company markets its services in 54
countries.
Page 25
Veritas DGC Inc., headquartered in Houston, Texas, provides seismic data
acquisition, data processing, multi-client data surveys and information
services to the oil and gas industry in selected markets worldwide to
the petroleum industry.
Weatherford Enterra, Inc., headquartered in Houston, Texas, through
subsidiaries, provides a variety of services and equipment to the
exploration, production and transmission sectors of the oil and gas
industry, operating in virtually every oil and gas exploration and
production region in the world.
OIL - INTEGRATED
British Petroleum Plc, headquartered in London, England, one of the
world's largest petroleum and petrochemical groups, produces,
transports, refines and markets crude oil, natural gas and related
products; and makes and markets petrochemicals and related products. The
company also operates tankers for its own use and for third parties.
Mobil Corporation, headquartered in Fairfax, Virginia, produces,
transports, refines and markets petroleum, natural gas and related
products and makes and markets chemicals.
Royal Dutch Petroleum Company, headquartered in The Hague, The
Netherlands, owns 60% of the Royal Dutch/Shell Group of companies. These
companies are involved in all phases of the petroleum industry from
exploration to final processing and delivery. The company has no
operations of its own and virtually the whole of its income is derived
from its 60% interest.
Total SA, headquartered in Paris, France, makes rubber-based products
and specialty chemicals; explores for and produces crude oil and natural
gas; and refines and markets petroleum products.
USX-Marathon Corporation, headquartered in Pittsburgh, Pennsylvania,
explores, produces, refines, distributes and markets crude oil, natural
gas and petroleum products.
YPF Socied Anonima, headquartered in Buenos Aires, Argentina, with
subsidiaries, explores for, develops and produces oil and natural gas in
Argentina, Bolivia, Ecuador, Indonesia, the United States and Venezuela.
The company refines, markets, transports and distributes oil and a broad
range of petroleum products, petroleum derivatives, petrochemicals and
liquid petroleum gas.
OIL - REFINING AND MARKETING
Giant Industries, Inc., headquartered in Scottsdale, Arizona, owns and
operates a refinery near Gallup, New Mexico, which produces gasoline,
diesel fuel and jet fuel; and is equipped to produce a gasoline slate
that is 100% unleaded. The company also transports crude oil and natural
gas.
Tosco Corporation, headquartered in Stamford, Connecticut, with
subsidiaries, refines crude oil and other feedstocks into petroleum
products including gasoline, diesel, jet fuel and heating oil through
three refineries in California, New Jersey and Washington; sells
gasoline and distillates wholesale; sells gasoline through 3,900 retail
locations; and owns interests in oil shale properties.
What are the Equity Securities Selected for Blue Chip International
Companies Growth Trust, Series 1?
BASF AG, headquartered in Ludwigshafen, Germany, produces plastics,
fibers, health and nutrition products, colorants, finishing products,
oil, gas, chemicals and information systems products.
Bayer AG, headquartered in Leverkusen, Germany, provides a wide variety
of products and services in areas ranging from healthcare and
agriculture to plastics, specialty chemicals and imaging technologies.
JE The British Petroleum Company Plc, headquartered in London, England,
one of the world's largest petroleum and petrochemical groups, produces,
transports, refines and markets crude oil, natural gas and related
products; and makes and markets petrochemicals and related products. The
company also operates tankers for its own use and for third parties.
JE The Broken Hill Proprietary Company, headquartered in Melbourne,
Australia, explores for, mines, processes and markets coal, iron ore,
manganese ore, gold, copper and other minerals with subsidiaries. The
company makes and markets steel products; explores for, produces,
processes, refines, trades and markets oil and gas; and also provides
transport and engineering services.
Cadbury Schweppes Plc, headquartered in London, England, with
subsidiaries, makes, markets and distributes internationally branded
Page 26
chocolate and other confectionery products in the form of bars, blocks,
bagged products, boxed assortments, chocolate eggs, novelties and
beverages, which are sold in cans, glass bottles, plastic containers and
aseptic packages.
Daimler-Benz AG, headquartered in Stuttgart, West Germany, makes cars
under the Mercedes-Benz nameplate and commercial vehicles; aircraft,
space systems, defense and civil systems and propulsion systems. The
company also provides financial services and insurance brokerage.
JE ENI SpA, headquartered in Rome, Italy, through subsidiaries,
explores, develops and produces oil and natural gas in Italy, North
Africa, West Africa and the North Sea; supplies, transmits and
distributes natural gas; refines and markets oil and petroleum products;
produces and sells petrochemicals; and provides oilfield services
contracting and engineering.
JE LM Ericsson, headquartered in Stockholm, Sweden, provides advanced
systems, products and services for handling voice, data, image and text
in public and private wired and mobile telecommunications network,
telecommunications power equipment, and telecommunications and power
cable.
Grand Metropolitan Plc, headquartered in London, England, with
subsidiaries, makes and sells food, wine, spirits and other consumer
goods under a variety of brand names, including "Pillsbury," "Haagen-
Dazs," "Smirnoff," "J&B Rare," "Belays," "Old El Paso," "Green Giant"
and "Progresso." The company also operates and franchises the Burger
King chain of restaurants.
HSBC Holdings Plc, headquartered in London, England, is the holding
company for the HSBC Group, which is an international banking and
financial services organizations with operations in the Asia-Pacific
region, Europe, the Middle East and the United States. Services provided
include retail and corporate banking, trade, trustee, securities,
custody, capital markets, treasury services, insurance and private and
investment banking.
Hitachi Ltd., headquartered in Tokyo, Japan, makes nuclear,
hydroelectric and thermal power plants, electrical equipment and
automotive parts; audio and video equipment, appliances, lighting
fixtures and dry batteries; telephone exchanges, broadcasting equipment,
computer equipment, and semiconductors; compressors; and wire and cable.
Honda Motor Co., Ltd., headquartered in Tokyo, Japan, with subsidiaries,
makes a wide variety of products using internal combustion engines,
including motorcycles, automobiles, and power products such as portable
generators, small general purpose engines, lawn mowers and tractors,
power tillers, outboard engines and four-wheeled all-terrain vehicles.
ING Groep NV, headquartered in Amsterdam, The Netherlands, is an
international financial service group of companies which offers a wide
range of financial services to individuals, corporations and other
institutions. The company's services include commercial, savings and
investment banking, as well as life, property and commercial insurance
and has offices throughout the world.
LVMH Moet Hennessy Louis Vuitton, headquartered in Paris, France,
through subsidiaries and affiliates, makes luxury products including
"Dom Perignon," "Moet & Chandon" and "Veuve Clicquot Ponsardin"
champagnes; "Hennessy," "Hine" and "F.O.V." cognacs; "Louis Vuitton" and
"Loewe" luggage, leather goods and accessories; "Christian Dior,"
"Givenchy" and "Kenzo" perfumes and cosmetics.
JE NEC Corporation, headquartered in Tokyo, Japan, makes and sells
switching and transmission systems, communications terminal equipment
and radio systems; designs, makes and sells computers; makes integrated
circuits and discrete semiconductor devices; and makes consumer
electronic products.
Nestle SA, headquartered in Switzerland, through subsidiaries and allied
companies, makes chocolate and confectionery products, Hills Bros.
coffees, milk and cheese, infant foods, soups, frozen foods, pet foods,
ice cream and refrigerated desserts. The company also operates
foodservice and pharmaceutical businesses.
Oy Nokia AB, headquartered in Finland, makes mobile phones, computer
monitors, multimedia network terminals, battery chargers for mobile
phones, satellite receivers and video conferencing equipment.
Novartis AG, headquartered in Batel, Switzerland, is a world leader in
Life Sciences with core businesses in Healthcare, Agribusiness and
Nutrition. The company was created by the merger of Sandoz and Ciba-
Geigy, the Swiss pharmaceutical companies.
Philips Electronics N.V., headquartered in Eindhoven, The Netherlands,
through subsidiaries, makes and distributes lighting products, consumer
Page 27
electronics, software, medical systems for diagnosis and therapy and
other professional equipment, dies, molds, semiconductors and other
components. The company also distributes recorded music and engages in
other entertainment activities.
Roche Holding AG, headquartered in Batel, Switzerland, through
divisions, makes a variety of pharmaceuticals, vitamins and carotenoids;
develops and sells reagents and analytical systems; and makes fragrances
and flavors.
Royal Dutch Petroleum Company N.V., headquartered in The Hague, The
Netherlands, owns 60% of the Royal Dutch/Shell Group of companies. These
companies are involved in all phases of the petroleum industry from
exploration to final processing and delivery. The company has no
operations of its own and virtually the whole of its income is derived
from its 60% interest.
SAP AG, headquartered in Walldorf, Germany, is a multinational software
company which develops software, consults on organization and
application of software and trains users. The company also provides
products and services through subsidiaries, distributors and other
business partners worldwide.
SGS-THOMSON Microelectronics NV, headquartered in Saint Genis Pouilly,
France, designs, develops, manufactures and markets a broad range of
semiconductor integrated circuits (ICs) and discrete devices used in a
wide variety of microelectronic applications, including
telecommunications systems, computer systems, consumer products and
industrial automation and control systems.
Siemens AG, headquartered in Munich, Germany, provides industrial and
building systems, drives and standard products, automation systems,
power generation and transmission products, healthcare products,
communications systems, lighting products; transportation systems,
information technology products, and electromechanical components.
SmithKline Beecham, headquartered in Middlesex, England, through
subsidiaries, develops, makes and markets human pharmaceuticals, over-
the-counter medicines, consumer healthcare products and clinical
laboratory testing services.
Sony Corporation, headquartered in Tokyo, Japan, develops, makes,
markets and sells a broad range of electronic equipment and devices,
including video and audio equipment and televisions; and produces,
makes, markets and distributes music, motion pictures and television
programs throughout the world.
Telefonica de Espana SA, headquartered in Madrid, Spain, is the
exclusive supplier of voice telephone services in Spain under a contract
with the Spanish State. The company is also the largest Spanish mobile
communications operator in Spain; a leading telecommunications operator
in Latin America; and the world's second largest owner of submarine
cables.
JE Total SA, headquartered in Paris, France, makes rubber-based products
and specialty chemicals; explores for and produces crude oil and natural
gas; and refines and markets petroleum products.
Unilever H.V., headquartered in Rotterdam, The Netherlands, with
Unilever Plc makes and markets branded and packaged consumer goods,
mainly foods, beverages, detergents and personal products. Other
operations include specialty chemicals, textiles, power applications and
investment in breweries.
YPF Sociedad Anonima, headquartered in Buenos Aires, Argentina, explores
for, develops and produces oil and natural gas with subsidiaries in
Argentina, Bolivia, Ecuador, Indonesia, the United States and Venezuela.
The company 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 Internet Growth Trust,
Series 3?
ACCESS/INFORMATION PROVIDERS
America Online, Inc., headquartered in Dulles, Virginia, provides online
services to consumers in the United States, Canada and Europe, offering
subscribers a wide variety of services, including electronic mail,
conferencing, news, sports, Internet access, entertainment, weather,
stock quotes, software, computing support and online classes.
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.
Page 28
WorldCom, Inc. (Class A), headquartered in Jackson, Mississippi, through
subsidiaries, provides long distance and local products, 800 services,
calling cards, domestic and international private lines, broadband data
services, debit cards, conference calling, fax and data connections and
interconnection to Internet service providers.
COMMUNICATIONS EQUIPMENT
ADC Telecommunications, Inc., headquartered in Minnetonka, Minnesota,
designs, makes and markets transmission, enterprise networking systems
and connectivity products for use in fiber optic, twisted pair, coaxial
and wireless broadband networks. Products employ fiber optic, hybrid
fiber coax, wireless and traditional copper-based technologies.
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.
PairGain Technologies, Inc., headquartered in Tustin, California,
designs, manufactures, markets and supports products that allow
telecommunications carriers and private networks to more efficiently
provide high speed digital service to end-users over the large existing
infrastructure of unconditioned copper wires. This service, typically
delivered over T1 lines in North America and E1 lines in international
markets, enables high speed data transmission for applications such as
wide area networking and video teleconferencing.
Tellabs, Inc., headquartered in Lisle, Illinois, designs, makes and
services voice and data transport and network access systems used by
public telephone companies, long-distance carriers, alternate service
providers, cellular and other wireless service providers, cable
operators, government agencies, utilities and business end-users.
COMPUTER NETWORKING
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.
Bay Networks, Inc., headquartered in Santa Clara, California, develops,
makes, markets and supports a line of data networking products and
services which enable end users to build or enhance their data network
systems.
3Com Corporation, headquartered in Santa Clara, California, designs,
makes, markets and supports a wide range of global data networking
computer systems based on industry standards and an open systems
architecture. The company also offers integrated services, digital
network adapters, internet-working products and integrated digital
remote access systems.
Cisco Systems, Inc., headquartered in San Jose, California, develops,
makes, sells and supports high performance internet-working systems that
link geographically dispersed local-area and wide-area networks to form
a single, seamless information infrastructure.
Newbridge Networks Corporation, headquartered in Ontario, Canada,
designs, makes, markets and services a comprehensive desktop-to-desktop
family of networking products and systems that enables customers in more
than 100 countries to access the power of multimedia communications.
COMPUTERS
Compaq Computer Corporation, headquartered in Houston, Texas, makes and
markets desktop personal computers, portable computers, workstations,
communications products and tower PC servers and peripheral products
that store and manage data in network environments. Products are
marketed mainly to business, home, government and education customers.
Products are sold directly to full-service computer specialty dealers
for resale to end-users.
Dell Computer Corporation, headquartered in Round Rock, Texas, designs,
develops, makes, sells, services and supports a broad range of personal
Page 29
computers, including desktops, notebooks and servers compatible with
industry standards under the "Dell" brand name. The company also sells
software, peripheral equipment, and service and support programs.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, makes and services equipment and systems for measurement,
computation and communications, including computer systems, personal
computers, printers, calculators, electronic test equipment, medical
electronic equipment, solid state components and instrumentation for
chemical analysis.
Sun Microsystems, Inc., headquartered in Mountain View, California,
supplies network computing products, including workstations, servers,
software, microprocessors and a full range of services and support. The
company's software utilizes the UNIX operating system.
SEMICONDUCTORS
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Microcomputer
components are integrated circuits consisting of silicon-based
semiconductors etched with complex patterns of transistors.
Smart Modular Technologies, Inc., headquartered in Fremont, California,
designs, makes and markets memory modules, personal computer card
products and embedded processor modules primarily to leading original
equipment manufacturers in the computer, networking and
telecommunications industries.
SOFTWARE
BMC Software, Inc., headquartered in Houston, Texas, develops, markets
and supports standard systems software products to enhance IBM's
mainframe database management, network management and data
communications software systems.
Computer Associates International, Inc., headquartered in Islandia, New
York, designs, develops, markets and supports standardized computer
software products for mainframe, midrange and desktop computers from
various hardware manufacturers including IBM, Data General, Digital
Equipment Corp., Hewlett-Packard, Sun Microsystems, Tandem and Compaq.
McAfee Associates, Inc., headquartered in Santa Clara, California,
develops, markets, distributes and supports network security and
management software products including anti-virus protection as well as
client/server network management tools.
Microsoft Corporation, headquartered in Redmond, Washington, makes,
sells and licenses software products, including operating systems,
server applications, business and consumer products, Internet software
technologies and development tools. The company also markets personal
computer books and input devices and researches and develops software
technologies. The company is divided into four groups: the Platforms
Product Group, the Applications and Content Product Group, the Sales and
Support Group and the Operations Group.
Netscape Communications Corporation, headquartered in Mountain View,
California, provides open client and server, commercial applications and
development tools that link people and information over the Internet and
private transmission control protocol/Internet Protocol networks. Using
the company's software, organizations can extend their internal
information systems and enterprise applications to geographically
dispersed facilities, including remote offices and mobile employees. In
addition, the company's products allow individuals and organizations to
execute transactions across the Internet, such as the buying and selling
of information, software, merchandise and publications.
Oracle Corporation, headquartered in Redwood City, California, designs,
develops, markets and supports computer software products with a wide
variety of uses, including database management, network products,
application development, business intelligence productivity tools and
client server business applications.
PeopleSoft, Inc., headquartered in Pleasanton, California, develops
PeopleSoft Human Resource Management System, PeopleSoft Financials,
PeopleSoft Distribution and PeopleSoft Financials for Public Sector
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software products which are portable and scaleable families of cross-
industry client/server enterprise-wide applications for use throughout
companies.
What are the Equity Securities Selected for Investment Services Growth
Trust, Series 2?
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, American Stock Exchange, as well as other leading exchanges
and is registered with the Commodity Futures Trading Commission.
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.
Donaldson, Lufkin & Jenrette, Inc., headquartered in New York, New York,
provides securities underwriting, sales, trading, merchant banking,
financial advisory services, investment research, correspondent
brokerage services and asset management to institutional, corporate,
governmental and individual clients.
E Trade Group, Inc., headquartered in Palo Alto, California, provides
online discount brokerage services using its proprietary processing
technology. Services include automated order placement, portfolio
tracking, related market information, news and other information. The
company offers its services through the Internet, online service
providers, direct modem access, touch-tone telephone and interactive
television.
A.G. Edwards, Inc., headquartered in St. Louis, Missouri, through
subsidiaries, provides securities, commodities brokerage, asset
management, insurance, trust, investment banking and other related
financial services to individual, corporate, governmental and
institutional clients. Revenues are derived mainly from commissions,
asset management, service fees, principal transactions, investment
banking and interest.
EVEREN Capital Corporation, headquartered in Chicago, Illinois, through
EVEREN Securities, Inc., provides full-service, retail-oriented
securities brokerage operations with a distribution force of over 1,100
retail registered representatives located in 140 branch offices in 27
states.
Fahnestock Viner Holdings, Inc. (Class A), headquartered in Ontario,
Canada, through subsidiaries, provides securities brokerage services,
including retail securities brokerage, institutional sales, bond trading
and investment banking and offers corporate and public finance services,
underwriting, research, market making and investment advisory and asset
management services.
Franklin Resources, Inc., headquartered in San Mateo, California,
through subsidiaries, provides investment management, marketing,
distribution, transfer agency and administrative services to open-end
investment companies, managed and institutional accounts, 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 equity
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
and money management services.
Investment Technology Group, Inc., headquartered in New York, New York,
provides automated equity trading services and transaction research to
institutional investors and brokers. Main services are POSIT, an
electronic stock crossing system and QuantEX, a decision support and
execution system with integrated trade analysis, routing and management
capabilities.
Jeffries 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.
Legg Mason, Wood, Walker, Inc., headquartered in Baltimore, Maryland,
through subsidiaries, provides securities brokerage and trading,
investment of mutual funds, 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
Page 31
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, Inc., 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.
Merrill Lynch & Company, Inc., headquartered in New York, New York,
through subsidiaries, provides brokering, trading, underwriting,
investment banking, corporate finance advisory services, asset
management, trading of foreign exchange instruments, futures,
commodities, derivatives, securities clearance services, banking, trust,
lending and insurance services.
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 other countries as well as retail customers in the southeastern
United States.
Morgan Stanley, Dean Witter, Discover and Co., 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.
Paine Webber Group, Inc., headquartered in New York, New York, through
wholly-owned PaineWebber Inc. 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 investment banking activities.
Piper Jaffray Companies, Inc., headquartered in Minneapolis, Minnesota,
through wholly-owned Piper Jaffray, Inc., operates as a broker/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, Inc., headquartered in Baltimore, Maryland,
serves as investment adviser to the T. Rowe Price Mutual Funds, other
sponsored investment products, institutional and individual private
accounts, and provides certain administrative and shareholder services
to the Price Funds and other mutual funds.
Raymond James Financial, Inc., headquartered in St. Petersburg, Florida,
through subsidiaries, provides investment and financial planning
products and services, including securities brokerage, investment
banking, 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 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, health, credit,
property and casualty insurance and consumer finance services.
What are the Equity Securities Selected for Retail Growth Trust, Series 2?
AutoZone, Inc., headquartered in Memphis, Tennessee, retails automotive
parts and accessories, primarily focusing on do-it-yourself consumers,
operating over 1,400 stores in 27 states, mainly located in the Sunbelt
and Midwest regions of the United States.
Page 32
Barnes & Noble, Inc., headquartered in New York, New York, operates over
900 bookstores in 46 states, Washington, D.C. and Puerto Rico. The
company also publishes books under its Barnes & Noble Books imprint for
exclusive sale through retail stores and mail-order catalogs.
Bed Bath & Beyond, Inc., headquartered in Union, New Jersey, sells
domestic merchandise (bed linens, bath accessories and kitchen textiles)
and home furnishings (cookware, dinnerware, glassware and basic
housewares) through 86 stores in 22 states.
CompUSA, Inc., headquartered in Dallas, Texas, sells personal computer
hardware, software, accessories and related products through 106
computer superstores in 33 states. The company also provides direct
marketing to corporate, government, education and mail order customers
as well as training and technical services. In addition, the company
conducts mail order operations both through its stores and through
wholly-owned PCs Compleat, Inc.
Consolidated Stores Corporation, headquartered in Wilmington, Delaware,
buys and sells large quantities of close-out merchandise generally
obtained at a fraction of the initial wholesale price, as well as
currently promoted retail toys. The company's merchandise is comprised
of new, mainly brand name products, obtained from manufacturers' excess
inventories, overruns, packaging changes and discontinued goods.
Costco Companies, Inc., headquartered in Issaquah, Washington, operates
a chain of wholesale cash and carry membership warehouses that sell high
quality, nationally branded and selected private label merchandise at
low prices to businesses and individuals who are members of selected
employee groups.
Dayton Hudson Corporation, headquartered in Minneapolis, Minnesota,
operates 64 department stores under the names "Hudson's," "Marshall
Field's" and "Dayton's," 670 "Target" discount stores selling everyday
needs, apparel and recreational items and 295 retail stores under the
name "Mervyn's," selling mainly apparel and soft goods.
Dollar General Corporation, headquartered in Nashville, Tennessee, owns
and operates over 2,000 franchises and 10 retail general merchandise
stores in 24 states, located predominantly in the midwestern and
southeastern United States, operating under the name "Dollar General
Stores."
Federated Department Stores, Inc., headquartered in Cincinnati, Ohio,
operates over 400 department stores in 33 states under the
"Bloomingdale's," "The Bon Marche," "Burdines," "Macy's," "Lazarus,"
"Rich's," "Goldsmith's," and "Stern's" names. The company also operates
153 specialty stores under the "Aeropostale" and "Charter Club" names.
Gap, Inc., headquartered in San Francisco, California, operates over
1,800 specialty retail stores in Canada, France, Germany, Japan, the
United States and the United Kingdom. The stores sell casual apparel,
shoes and other accessories for men, women and children under a variety
of brand names, including "Gap," "GapKids," "babyGap," "Banana Republic"
and "Old Navy Clothing Co."
Gucci Group N.V., headquartered in Rotterdam, The Netherlands, designs,
produces and distributes leather goods, shoes, ties, scarves, ready-to-
wear, watches, gifts, jewelry, eyewear and perfume. The company also
operates 65 stores around the world and sells products through 83
franchise stores, 74 duty-free boutiques and 376 department and
specialty stores.
Tommy Hilfiger Corporation, headquartered in Kowloon, Hong Kong, through
subsidiaries, designs, sources and markets designer men's sportswear and
boyswear, including woven and knit shirts, pants, sweaters, outerwear,
athletic wear, denim products and certain licensed products under the
Tommy Hilfiger trademark.
Home Depot, Inc., headquartered in Atlanta, Georgia, operates over 400
do-it-yourself warehouse stores which sell plumbing, heating, lighting
and electrical supplies, building materials, lumber, floor and wall
coverings, hardware, tools, paint and other products.
Kohl's Corporation, headquartered in Menomonee Falls, Wisconsin,
operates 145 family-oriented, specialty department stores primarily in
the Midwest which sell moderately priced apparel, shoes, accessories,
soft home products and housewares. The company's merchandise is targeted
to middle-income customers shopping for their families and homes.
Kroger Co., headquartered in Cincinnati, Ohio, operates over 1,300
supermarkets in 24 states, 819 convenience stores in 15 states and 37
Page 33
food processing facilities which supply private label products to the
company's supermarkets.
Lowe's Companies, Inc., headquartered in North Wilkesboro, North
Carolina, through subsidiaries, operates 365 stores in 23 states which
sell building commodities, mill work, heating, cooling and water
systems, home decorating, illumination products, kitchens, bathrooms,
laundries, yard, patio and garden products and tools; home entertainment
products and special order products.
Nautica Enterprises, Inc., headquartered in New York, New York, through
subsidiaries, designs, sources and sells fine quality men's sportswear,
outerwear and activewear with a distinctive active outdoor image which
is sold through better department store chains and specialty stores.
Safeway, Inc., headquartered in Pleasanton, California, operates a chain
of over 1,000 conventional and superstore supermarkets under the name
"Safeway" in the United States and Canada. Stores offer broad lines of
nationally advertised, private label brands and unbranded products.
Sears, Roebuck and Co., headquartered in Hoffman Estates, Illinois,
operates a chain of over 800 retail stores in the United States, as well
as hardware superstores, auto supply and specialty stores.
St. John Knits, Inc., headquartered in Irvine, California, designs,
makes and markets women's clothing and accessories, sold mainly under
the St. John tradename. Products consist primarily of knitwear, designed
for year-round use and suitable for women's business, evening and casual
needs. The company operates 17 retail boutiques and five outlet stores
in the United States.
Staples, Inc., headquartered in Westborough, Massachusetts, operates
over 400 high volume office superstores throughout the United States and
Canada which provide office supplies, business machines, computer
products, office furniture and other business-related products.
Tiffany & Co., headquartered in New York, New York, retails, designs,
makes and distributes fine jewelry and gift items, including timepieces,
sterling silverware, china, crystal, stationery, leather goods, writing
instruments, fragrances, ties and scarves. Products are sold at retail
through stores in the United States, Europe and Asia.
The TJX Companies, Inc., headquartered in Framingham, Massachusetts,
through subsidiaries, operates over 500 T.J. Maxx stores, 496 Marshalls
stores, 52 Winners Apparel stores, 22 HomeGoods stores, and 9 T.K. Maxx
stores in the United States, Canada and the United Kingdom selling off-
price family apparel, accessories, domestics and giftware. The company
also sells women's wear through a mail order catalog.
Wal-Mart Stores, Inc., headquartered in Bentonville, Arkansas, operates
over 1,900 Wal-Mart retail discount department stores, 344 Wal-Mart
Supercenters and 436 Sam's wholesale clubs in the United States and 314
units in Argentina, Brazil, Canada, Indonesia, Mexico, Peoples' Republic
of China and Puerto Rico.
Walgreen Company, headquartered in Deerfield, Illinois, operates a
nationwide chain of over 2,000 retail Walgreens drugstores in 34 states
and Puerto Rico. Merchandise sold includes prescription and
nonprescription drugs, general merchandise, cosmetics, toiletries,
liquor, beverages and tobacco products. The company also operates two
mail order facilities.
What are the Equity Securities Selected for Small-Cap Growth Trust,
Series 2?
Aames Financial Corporation, headquartered in Los Angeles, California, a
consumer finance concern, originates, purchases, sells and services home
equity mortgage loans secured by single family residences. The company
operates 74 offices located throughout the United States.
Applebee's International, Inc., headquartered in Overland Park, Kansas,
develops, franchises and operates a national chain of over 800
restaurants in 45 states, including Canada, Curacao, Germany and The
Netherlands under the name "Applebee's Neighborhood Grill & Bar." The
company also operates 30 "Rio Bravo Cantina" restaurants and four
specialty restaurants in 11 states.
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 Concepts Corporation, headquartered in San Antonio, Texas,
Page 34
provides third-party billing clearinghouse and information management
services to the telecommunication industry.
BMC Industries, Inc., headquartered in Minneapolis, Minnesota, designs,
makes and sells aperture masks, precision etched metal products, printed
circuit boards and etched and filled glass products and also
manufactures and sells ophthalmic lenses made of glass, plastic and
polycarbonates.
Cavalier Homes, Inc., headquartered in Addison, Alabama, designs and
makes low-to-medium-priced manufactured homes sold through over 500
independent dealers operating in over 600 retail sales centers in more
than 30 states, mainly in the southeast, southwest and midwest regions
of the United States. Approximately 80% of revenues were generated from
sales in the core markets of Alabama, Georgia, Louisiana, Mississippi,
North Carolina, South Carolina, Tennessee and Texas.
Champion Enterprises, Inc., headquartered in Auburn Hills, Michigan,
through subsidiaries, makes manufactured homes and mid-size buses for
sale in the United States and Canada.
Coherent, Inc., headquartered in Santa Clara, California, develops and
makes over 150 laser, laser system, precision optics and component
products. The company operates in two major business segments: medical,
which serves the medical-surgical community and electro-optical, which
serves the needs of scientific and commercial customers.
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.
Excel Industries, Inc., headquartered in Elkhart, Indiana, produces
window, door and seating systems and injection molded plastic parts for
the North American automotive original equipment manufacturers and
appliances, window, door and seating systems and hardware products for
the recreational vehicle, mass transit and heavy truck industry.
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 Dallas, 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.
Giant Industries, Inc., headquartered in Scottsdale, Arizona, owns and
operates a refinery near Gallup, New Mexico, which produces gasoline,
diesel fuel and jet fuel; and is equipped to produce a gasoline slate
that is 100% unleaded. The company also transports crude oil and natural
gas.
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, other medical devices, flexible circuits and
chemically etched parts for the medical and computer industries and
software for document storage retrieval and management.
Investment Technology Group, Inc., headquartered in New York, New York,
provides automated equity trading services and transaction research to
institutional investors and brokers. Main services are POSIT, an
electronic stock crossing system and QuantEX, a decision support and
execution system with integrated trade analysis, routing and management
capabilities.
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.
Medical Resources, Inc., headquartered in Hackensack, New Jersey,
operates 37 outpatient diagnostic imaging centers which provide network
Page 35
management services to managed care organizations. The company also
provides temporary healthcare staffing to acute and sub-acute care
facilities nationwide.
Merrill Corporation, headquartered in St. Paul, Minnesota, provides on
demand, 24-hour-a-day typesetting, printing, management and
reproduction, distribution and marketing communication services to
financial, legal, funds and corporate markets.
MicroAge, Inc., headquartered in Tempe, Arizona, distributes and
integrates information technology products and services through and in
partnership with, a network of resellers, including 13 company-owned
resellers.
Mueller Industries, Inc., headquartered in Memphis, Tennessee, 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, refrigeration,
driers and flare fittings, 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,
overhead doors, self-storage buildings, metal home framing systems and
components. Metal building systems include primary and secondary
structural framing, roof and siding panels. The company markets its
products through its authorized builder networks, direct sales to
contractors and private label sales to certain large builders.
Nature's Sunshine Products, Inc., headquartered in Provo, Utah, makes
and markets nutritional and personal care products. Nutritional products
include herbs, beverages, vitamins, mineral and food supplements and a
line of homeopathic remedies. Personal care products include natural
skin, hair and beauty care products.
Oriental Financial Group, headquartered in San Juan, Puerto Rico,
through wholly-owned Oriental Bank & Trust, conducts a commercial
banking business through 16 banking offices throughout the greater
metropolitan area of San Juan, Mayaguez, Arecibo and Ponce, Puerto Rico.
Pomeroy Computer Resources, headquartered in Hebron, Kentucky, sells a
broad range of microcomputers and related products, provides
professional services ranging from basic equipment selection and
procurement, to complex network design, integration and system support.
Regal Cinemas, Inc., headquartered in Knoxville, Tennessee, operates 128
multi-screen motion picture theatres in the eastern United States. The
company intends to develop new theatres in existing and target markets,
add screens to existing theatres, acquire theatres and develop
complementary theatre concepts.
Rent-Way, Inc., headquartered in Erie, Pennsylvania, operates 108 rental-
purchase stores in 11 states and Washington, D.C., which rent household
products, such as television sets, video recorders and cameras, stereos,
major appliances, jewelry, and furniture, on a week-to-week or month-to-month
basis with an option to purchase.
Republic Group, Inc., headquartered in Hutchinson, Kansas, manufactures
and sells 100% recycled paperboard, reclaimed paper fiber and gypsum
wallboard.
Rotech Medical Corporation, headquartered in Orlando, Florida, provides
home healthcare products and services, including respiratory therapy
equipment, convalescent medical equipment, home infusion therapy
products and operates primary care physician practices. The company
operates 366 home healthcare locations and 24 primary care physician
practices.
Special Devices, Inc., headquartered in Newhall, California, designs and
makes pyrotechnic devices used by the automotive industry as initiators
in airbag systems and by the aerospace industry, mainly in tactile
missile systems, propellants, explosives and military aircraft crew
ejection systems.
SPSS, Inc., headquartered in Chicago, Illinois, develops, markets and
supports an integrated line of statistical software products and
services that enable users to effectively bring marketplace and
enterprise data to bear on decision making. Main users of the company's
software are managers and data analysts in corporate settings,
government agencies and academic institutions.
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.
Page 36
St. John Knits, Inc., headquartered in Irvine, California, designs,
makes and markets women's clothing and accessories, sold mainly under
the "St. John" tradename. Products consist primarily of knitwear,
designed for year-round use and suitable for women's business, evening
and casual needs. The company operates 17 retail boutiques and five
outlet stores in the United States.
Toll Brothers, Inc., headquartered in Huntingdon Valley, Pennsylvania,
designs, builds, markets and finances single family detached and
attached homes in middle- and high-income residential communities
located mainly on land. The company develops in suburban residential
areas and provides financing to customers.
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.
United Stationers, Inc., headquartered in Des Plaines, Illinois, through
subsidiaries, distributes traditional office products, computers
supplies, office furniture and facilities and maintenance supplies.
Universal Forest Products, headquartered in Grand Rapids, Michigan,
through subsidiaries, makes, treats and distributes lumber products for
the do-it-yourself, manufactured housing, wholesale lumber and
industrial markets. Principal products include pressure-treated wood,
engineered roof trusses, dimension lumber and value-added lumber
products, including lattice, fence panels, deck components and kits for
various outdoor products sold under the company's "PRO-WOOD," "Deck
Necessities," "Lattice Basics," "Fence Fundamentals" and "Outdoor
Essentials" trademarks.
World Fuel Services Corporation, headquartered in Miami Springs,
Florida, through subsidiaries, provides aviation and marine fueling
services and recycles non-hazardous used oil.
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.
Neither the Sponsor nor the Trustee shall 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
Page 37
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)
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.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisors. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Equity Securities in the Trust or the issuers of
the Equity Securities. Changing approaches to regulation, particularly
with respect to the environment or with respect to the petroleum
industry, may have a negative impact on certain companies represented in
the Trust. There can be no assurance that future legislation, regulation
or deregulation will not have a material adverse effect on the Trust or
will not impair the ability of the issuers of the Equity Securities to
achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in 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 % of the Public Offering Price and the maximum
remaining deferred sales charge, initially $___ per Unit. Commencing on
______, 1998, and on the last business day of each month thereafter,
through ______, 1998, a deferred sales charge of $ will be assessed
per Unit per month. Units purchased subsequent to the initial deferred
sales charge payment but still during the initial offering period will
be 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 % of the
Public Offering Price (equivalent to % of the net amount invested,
exclusive of the deferred sales charge) subject to reduction beginning
______, 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 % of
Page 38
the Public Offering Price (equivalent to % 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 ______, commencing ______,
1998 to a minimum sales charge of 3.0%.
The minimum amount which an investor may purchase of a Trust is $1,000
($250 for an Individual Retirement Account or other retirement plans).
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):
<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%
___________
<FN>
* The breakpoint sales charges are also applied on a Unit basis utilizing
a breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor. The
breakpoints will be adjusted to take into consideration purchase orders
stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
</FN>
</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. An investor may aggregate purchases of Units of Trusts contained
in this Prospectus and other trusts sponsored by Nike Securities L.P.
which are currently in the initial offering period and which have
substantially the same sales load and years to maturity as the Trusts
for purposes of qualifying for volume purchase discounts listed above.
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
Page 39
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, this evaluation is generally based
on the closing sale prices on that exchange (unless it is determined
that these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange, at the closing ask
prices. If the Equity Securities are not so listed or, if so listed and
the principal market therefor is other than on the exchange, the
evaluation shall generally be based on the current ask prices on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the
value of the Equity Securities on the ask side of the market or (c) by
any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of a Trust plus the applicable sales
charge. 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 ______, 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 ______,
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 on all
purchases of Units of the Trusts will be given to any broker/dealer or
Page 40
bank, who purchases from the Sponsor on the Initial Date of Deposit at
least $100,000 of any one of the Trusts or any one of the trusts
contained in The First Trust Special Situations Trust, Series 206, or
purchases $250,000 of any one of such trusts 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 ______, commencing ______, 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
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.
Information on percentage changes in the dollar value of Units, on the
basis of changes in Unit price may be included from time to time in
advertisements, sales literature, reports and other information
furnished to current or prospective Unit holders. Total return figures
are not averaged, and may not reflect deduction of the sales charge,
which would decrease the return. Average annualized return figures
reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance may not be indicative of future results. The Trust's
portfolio is not managed. Unit price and return fluctuate with the value
of the common stocks in the Trust's portfolio, so there may be a gain or
loss when Units are sold.
Page 41
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, 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
% of the Public Offering Price of the Units (equivalent to % 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 % subject to
reduction beginning ______, 1998) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although not obligated to do so, the
Sponsor intends to maintain a market for the Units and continuously
offer to purchase Units at prices, subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in 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
Page 42
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
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?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. However, to
the extent that amounts in the Capital Account are insufficient to
satisfy the then current deferred sales charge obligation, Equity
Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made
to an account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
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
Page 43
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
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee (if such day is a
day on which the New York Stock Exchange is open for trading), except
that as regards Units received after 4:00 p.m. Eastern time (or as of
any earlier closing time on a day on which the New York Stock Exchange
is scheduled in advance to close at such earlier time), the date of
tender is the next day on which the New York Stock Exchange is open for
trading and such Units will be deemed to have been tendered to the
Trustee on such day for redemption at the redemption price computed on
that day. Units so redeemed shall be cancelled. Units tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more of a Trust for redemption
may request by written notice submitted at the time of tender from the
Trustee in lieu of a cash redemption a distribution of shares of Equity
Securities in an amount and value of Equity Securities per Unit equal to
the Redemption Price Per Unit as determined as of the evaluation next
following tender. To the extent possible, in-kind distributions ("In-
Kind Distributions") shall be made by the Trustee through the
distribution of each of the Equity Securities in book-entry form to the
account of the Unit holder's bank or broker-dealer at the Depository
Trust Company. An In-Kind Distribution will be reduced by customary
transfer and registration charges. The tendering Unit holder will
receive his pro rata number of whole shares of each of the Equity
Securities comprising 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
Page 44
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.
Unit holders of Retail Growth Trust, Series 2 electing a distribution of
shares of Equity Securities should be aware that the transaction is
subject to taxation and such Unit holders will recognize gain based on
the appreciation value of the Equity Securities received. 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. For further information regarding this withholding, see
"How are Income and Capital Distributed?" In the event the Trustee has
not been previously provided such number, one must be provided at the
time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of a Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of 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 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 redemption
price per Unit will be assessed the amount, if any, of the remaining
deferred sales charge at the time of redemption.
The aggregate value of the Equity Securities used to calculate the
Redemption Price per Unit will be determined in the following manner: if
the Equity Securities are listed, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is
no closing sale price on that exchange, at the closing ask prices
(during the initial offering period) or the closing bid prices
(subsequent to the initial offering period). 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 or bid prices (as appropriate) on the over-the-counter
market (unless these prices are inappropriate as a basis for
evaluation). If current ask or bid prices (as appropriate) are
unavailable, the evaluation is generally determined (a) on the basis of
current ask or bid prices (as appropriate) for comparable securities,
(b) by appraising the value of the Equity Securities on the ask or bid
side of the market (as appropriate) 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
Page 45
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.
In addition, the Sponsor will instruct the Trustee to dispose of certain
Equity Securities and to take such further action as may be needed from
time to time to ensure that the Retail Growth Trust, Series 2 continues
to satisfy the qualifications of a regulated investment company,
including the requirements with respect to diversification under Section
851 of the Internal Revenue Code. 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 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.
Page 46
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.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Page 47
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
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,
Page 48
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. Unit holders of
Retail Growth Trust, Series 2 electing a distribution of shares of
Equity Securities should be aware that the transaction is subject to
taxation and such Unit holders will recognize gain based on the
appreciation value of the Equity Securities received. 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 49
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 217
We have audited the accompanying statements of net assets, including the
schedules of investments, of FT 217, comprised of Energy Growth Trust,
Series 3, Blue Chip International Growth Trust, Series 1,
Internet Growth Trust, Series 3, Investment Services Growth Trust,
Series 2, Retail Growth Trust, Series 2 and Small-Cap Growth Trust,
Series 2 at the opening of business on ______, 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
______, 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 FT 217,
comprised of Energy Growth Trust, Series 3, Blue Chip International
Companies Growth Trust, Series 1, Internet Growth Trust, Series 3,
Investment Services Growth Trust, Series 2, Retail Growth Trust, Series
2 and Small-Cap Growth Trust, Series 2, at the opening of business on
______, 1997 in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
______, 1997
Page 50
Statements of Net Assets
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Energy International Internet
Growth Trust Growth Trust Growth Trust
Series 3 Series 1 Series 3
____________ _____________ ____________
<S> <C> <C> <C>
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ $ $
Organizational and offering costs (3)
________ ________ ________
Less accrued organizational and offering costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less sales charge (5) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
____________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) For each Trust, an irrevocable letter of credit totaling $
issued by The Chase Manhattan Bank has been deposited with the Trustee
as collateral, which is sufficient to cover the monies necessary for the
purchase of the Equity Securities pursuant to contracts for the purchase
of such Equity Securities.
(3) 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
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
($___ per Unit), payable to the Sponsor in five equal monthly
installments beginning on ______, 1998, and on the last business day of
each month thereafter through ______, 1998. If Units are redeemed prior
to ______, 1998, the remaining amount of the deferred sales charge
applicable to such Units will be payable at the time of redemption.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of % of the Public Offering Price (equivalent to % of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
</FN>
</TABLE>
Page 51
Statements of Net Assets (con't.)
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Investment
Services Retail Small-Cap
Growth Trust Growth Trust Growth Trust
Series 2 Series 2 Series 2
_______________ ____________ ____________
<S> <C> <C> <C>
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $ $ $
Organizational and offering costs (3)
________ ________ ________
Less accrued organizational and offering costs (3) ( ) ( ) ( )
Less liability for deferred sales charge (4) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $ $ $
Less sales charge (5) ( ) ( ) ( )
________ ________ ________
Net assets $ $ $
======== ======== ========
_____________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" for each Trust is based on their aggregate underlying value.
(2) For each Trust, an irrevocable letter of credit totaling $
issued by The Chase Manhattan Bank has been deposited with the Trustee
as collateral, which is sufficient to cover the monies necessary for the
purchase of the Equity Securities pursuant to contracts for the purchase
of such Equity Securities.
(3) 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
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
($___ per Unit), payable to the Sponsor in five equal monthly
installments beginning on ______, 1998, and on the last business day of
each month thereafter through ______, 1998. If Units are redeemed prior
to ______, 1998, the remaining amount of the deferred sales charge
applicable to such Units will be payable at the time of redemption.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of % of the Public Offering Price (equivalent to % of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
</FN>
</TABLE>
Page 52
Schedule of Investments
ENERGY GROWTH TRUST, SERIES 3
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ___________
<S> <C> <C> <C> <C>
OIL AND GAS-DRILLING
DO Diamond Offshore Drilling % $ $
ESV Ensco International Inc. %
FLC Falcon Drilling Company, Inc. %
GLM Global Marine, Inc. %
NBR Nabors Industries Inc. %
NBL Noble Affiliates, Inc. %
RDC Rowan Companies, Inc. %
RIG Transocean Offshore Inc. %
OIL AND GAS - EXPLORATION AND PRODUCTION
NBL Noble Affiliates, Inc. %
NEV Nuevo Energy Company %
OIL - FIELD SERVICES
BJS BJ Services Co. %
GLBL Global Industries, Ltd. %
SLB Schlumberger Industries, Inc. %
TDW Tidewater Inc. %
TBI Tuboscope Inc. %
VTS Veritas DGC Inc. %
WII Weatherford Enterra, Inc. %
OIL - INTEGRATED
BP British Petroleum Plc %
MOB Mobil Corporation %
RD Royal Dutch Petroleum Company %
TOT Total SA %
MRO USX-Marathon Corporation %
YPF YPF Socied Anonima %
OIL - REFINING AND MARKETING
GI Giant Industries, Inc. %
TOS Tosco Corporation %
______ _________
Total Investments 100% $
====== =========
____________
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
Page 53
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final
portfolio.
</FN>
</TABLE>
Page 54
Schedule of Investments
BLUE CHIP INTERNATIONAL GROWTH TRUST, SERIES 1
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ___________
<S> <C> <C> <C> <C>
BASFY BASF AG % $ $
BAYZY Bayer AG %
BP JE The British Petroleum Company Plc %
BHP JE The Broken Hill Proprietary Company %
CSG Cadbury Schweppes Plc %
DAI Daimler-Benz AG %
E JE ENI SpA %
ERICY JE LM Ericsson %
GRM Grand Metropolitan Plc %
HSBHY HSBC Holdings Plc %
HIT Hitachi Ltd. %
HMC Honda Motor Co., Ltd. %
ING ING Groep NV %
LVMHY LVMH Moet Hennessy Louis Vuitton %
NIPNY JE NEC Corporation %
NSRGY Nestle SA %
NOK/A Oy Nokia AB %
NVTSY Novartis AG %
PHG Philips Electronics N.V. %
ROHHY Roche Holding AG %
RD Royal Dutch Petroleum Company N.V. %
SAPHY SAP AG %
STM SGS-THOMSON Microelectronics NV %
SMAWY Siemens AG %
SBH SmithKline Beecham %
SNE Sony Corporation %
TEF Telefonica de Espana SA %
TOT JE Total SA %
UN Unilever H.V. %
YPF YPF Sociedad Anonima %
______ _________
Total Investments 100% $
====== =========
_________
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final
portfolio.
</FN>
</TABLE>
Page 55
Schedule of Investments
INTERNET GROWTH TRUST, SERIES 3
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
ACCESS/INFORMATION PROVIDERS
AOL America Online, Inc. % $ $
FDC First Data Corporation %
WCOM WorldCom, Inc. %
COMMUNICATIONS EQUIPMENT
ADCT ADC Telecommunications, Inc. %
LU Lucent Technologies, Inc. %
PAIR PairGain Technologies, Inc. %
TLAB Tellabs, Inc. %
COMPUTER NETWORKING
ASND Ascend Communications, Inc. %
BAY Bay Networks, Inc. %
COMS 3Com Corporation %
CSCO Cisco Systems, Inc. %
NN Newbridge Networks Corporation %
COMPUTERS
CPQ Compaq Computer Corporation %
DELL Dell Computer Corporation %
HWP Hewlett-Packard Company %
SUNW Sun Microsystems, Inc. %
SEMICONDUCTORS
INTC Intel Corporation %
SMOD Smart Modular Technologies, Inc. %
SOFTWARE
BMCS BMC Software, Inc. %
CA Computer Associates International, Inc. %
MCAF McAfee Associates, Inc. %
MSFT Microsoft Corporation %
NSCP Netscape Communications Corporation %
ORCL Oracle Corporation %
PSFT PeopleSoft, Inc. %
______ _________
Total Investments 100% $
====== =========
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
Page 56
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
</TABLE>
Page 57
Schedule of Investments
INVESTMENT SERVICES GROWTH TRUST, SERIES 2
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ ____________ ______ ___________
<S> <C> <C> <C> <C>
ADV Advest Group, Inc. % $ $
BSC Bear Stearns Companies, Inc. %
DLJ Donaldson, Lufkin & Jenrette, Inc. %
EGRP E Trade Group, Inc. %
AGE A.G. Edwards, Inc. %
EVR EVEREN Capital Corporation %
FVH Fahnestock Viner Holdings, Inc. %
BEN Franklin Resources, Inc. %
HQ Hambrecht & Quist Group %
IFI Interra Financial, Inc. %
ITGI Investment Technology Group, Inc. %
JEF Jeffries Group, Inc. %
LM Legg Mason, Wood, Walker, Inc. %
LEH Lehman Brothers Holdings, Inc. %
MDD McDonald & Company Investments, Inc. %
MER Merrill Lynch & Company, Inc. %
MOR Morgan Keegan, Inc. %
MWD Morgan Stanley, Dean Witter, Discover and Co. %
PWJ Paine Webber Group, Inc. %
PJC Piper Jaffray Companies, Inc. %
TROW T. Rowe Price Associates, Inc. %
RJF Raymond James Financial, Inc. %
SCH Charles Schwab Corporation %
SWST Southwest Securities Group, Inc. %
TRV Travelers Group, Inc. %
______ _________
Total Investments 100% $
====== =========
____________
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final
portfolio.
</FN>
</TABLE>
Page 58
Schedule of Investments
RETAIL GROWTH TRUST, SERIES 2
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _____________________________________ ____________ ______ ___________
<S> <C> <C> <C> <C>
AZO AutoZone, Inc. % $ $
BKS Barnes & Noble, Inc. %
BBBY Bed Bath & Beyond, Inc. %
CPU CompUSA, Inc. %
CNS Consolidated Stores Corporation %
COST Costco Companies, Inc. %
DH Dayton Hudson Corporation %
DG Dollar General Corporation %
FD Federated Department Stores, Inc. %
GPS Gap, Inc. %
GUC Gucci Group N.V. %
TOM Tommy Hilfiger Corporation %
HD Home Depot, Inc. %
KSS Kohl's Corporation %
KR Kroger Co. %
LOW Lowe's Companies, Inc. %
NAUT Nautica Enterprises, Inc. %
SWY Safeway, Inc. %
S Sears, Roebuck and Co. %
SJK St. John Knits, Inc. %
SPLS Staples, Inc. %
TIF Tiffany & Co. %
TJX The TJX Companies, Inc. %
WMT Wal-Mart Stores, Inc. %
WAG Walgreen Company %
______ _________
Total Investments 100% $
====== =========
____________
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and profit to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3) The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
</TABLE>
Page 59
Schedule of Investments
SMALL-CAP GROWTH TRUST, SERIES 2
FT 217
At the Opening of Business on the
Initial Date of Deposit-______, 1997
<TABLE>
<CAPTION>
Approximate
Percentage Cost of
of Aggregate Market Equity
Number Ticker Symbol and Offering Value Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) per Share to Trust (2)
_________ _______________________________________ ____________ _________ ___________
<S> <C> <C> <C> <C>
AAM Aames Financial Corporation % $ $
APPB Applebee's International, Inc. %
BHE Benchmark Electronics, Inc. %
BILL Billing Concepts Corporation %
BMC BMC Industries, Inc. %
CAV Cavalier Homes, Inc. %
CHB Champion Enterprises, Inc. %
COHR Coherent, Inc. %
DAYR Day Runner, Inc. %
ENCD ENCAD, Inc. %
EXC Excel Industries, Inc. %
FIC Fair Isaac & Company, Inc. %
FRES Fresh America Corporation %
GNTX Gentex Corporation %
GI Giant Industries, Inc. %
JKHY Jack Henry & Associates %
INVX Innovex, Inc. %
ITGI Investment Technology Group, Inc. %
MCRS MICROS Systems, Inc. %
MRII Medical Resources, Inc. %
MRLL Merrill Corporation %
MICA MicroAge, Inc. %
MLI Mueller Industries, Inc. %
BLDG NCI Building Systems, Inc. %
NATR Nature's Sunshine Products, Inc. %
OFG Oriental Financial Group %
PMRY Pomeroy Computer Resources %
REGL Regal Cinemas, Inc. %
RWAY Rent-Way, Inc. %
RGC Republic Group, Inc. %
ROTC Rotech Medical Corporation %
SPSS SPSS, Inc. %
SDII Special Devices, Inc. %
SPOR Sport-Haley, Inc. %
SJK St. John Knits, Inc. %
TOL Toll Brothers, Inc. %
UNF UniFirst Corporation %
USTR United Stationers, Inc. %
UFPI Universal Forest Products %
INT World Fuel Services Corporation %
______ _________
Total Investments 100% $
====== =========
____________
<FN>
(1)All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on ______, 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 $ .
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $ and $ , respectively.
(3)The portfolio may contain additional Equity Securities each of which
will not exceed approximately % of the Aggregate Offering Price.
Although it is not the Sponsor's intention, certain of the Equity
Securities listed above may not be included in the final portfolio.
Also, the percentages of the Aggregate Offering Price for the Equity
Securities are approximate amounts and may vary in the final portfolio.
</FN>
</TABLE>
Page 60
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Page 61
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Page 62
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Page 63
CONTENTS:
Summary of Essential Information:
Energy Growth Trust, Series 3 4
Blue Chip International Growth Trust, Series 1 4
Internet Growth Trust, Series 3 4
Investment Services Growth Trust, Series 2 5
Retail Growth Trust, Series 2 5
Small-Cap Growth Trust, Series 2 5
FT 217:
What is The FT Series? 10
What are the Expenses and Charges? 14
What is the Federal Tax Status of Unit Holders? 15
Why are Investments in the Trusts Suitable for
Retirement Plans? 18
Portfolio:
What are Equity Securities? 18
Risk Factors 19
What are the Equity Securities Selected for:
Energy Growth Trust, Series 3? 24
Blue Chip International Growth Trust, 26
Series 1?
Internet Growth Trust, Series 3? 28
Investment Services Growth Trust, Series 2? 31
Retail Growth Trust, Series 2? 32
Small-Cap Growth Trust, Series 2? 33
What are Some Additional Considerations for 33
Investors?
Public Offering:
How is the Public Offering Price Determined? 35
How are Units Distributed? 40
What are the Sponsor's Profits? 42
Will There be a Secondary Market? 42
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 42
How are Income and Capital Distributed? 43
What Reports will Unit Holders Receive? 44
How May Units be Redeemed? 44
How May Units be Purchased by the Sponsor? 46
How May Equity Securities be Removed from a Trust? 46
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 47
Who is the Trustee? 47
Limitations on Liabilities of Sponsor and Trustee 48
Who is the Evaluator? 48
Other Information:
How May the Indenture be Amended or Terminated? 48
Legal Opinions 49
Experts 49
Report of Independent Auditors 50
Statements of Net Assets:
Energy Growth Trust, Series 3 51
Blue Chip International Growth Trust, Series 1 51
Internet Growth Trust, Series 3 51
Investment Services Growth Trust, Series 2 52
Retail Growth Trust, Series 2 52
Small-Cap Growth Trust, Series 2 52
Schedules of Investments:
Energy Growth Trust, Series 3 53
Blue Chip International Growth Trust, Series 1 55
Internet Growth Trust, Series 3 56
Investment Services Growth Trust, Series 2 58
Retail Growth Trust, Series 2 59
Small-Cap Growth Trust, Series 2 60
_____________
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)
ENERGY GROWTH TRUST SERIES 3
BLUE CHIP INTERNATIONAL GROWTH TRUST, SERIES 1
INTERNET GROWTH TRUST SERIES 3
INVESTMENT SERVICES GROWTH TRUST, SERIES 2
RETAIL GROWTH TRUST SERIES 2
SMALL-CAP GROWTH TRUST, SERIES 2
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
______, 1997
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 64
MEMORANDUM
Re: FT 217
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 205, which is the
current fund, and FT 217, 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 205 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 217 has duly caused this Amendment No. 2 to
the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on September 22, 1997.
FT 217
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities September 22, 1997
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of Nike
Securities Corporation,
the General Partner of
Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 217 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
