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 237
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
FT 237
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The FT Series
of trust
6. Execution and termination The FT Series; Other
of trust agreement Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The FT Series
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The FT Series
11. Types of securities comprising The FT Series
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The FT Series
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The FT
Series; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The FT Series
by depositor, principal
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The FT Series; Rights of
Unit Holders
17. Withdrawal or redemption The FT Series; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The FT Series;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The FT
Series; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The FT Series
50. Trustee's lien The FT Series
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The FT Series; Rights
agreement with respect of Unit Holders
to selection or elimination
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The FT Series; Rights
substitution or elimination of Unit Holders
of underlying securities
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The FT Series
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED DECEMBER 29, 1997
AS AMENDED JANUARY 13, 1998
STRATEGIC INCOME AND GROWTH TRUST, SERIES 1
The Trust. FT 237 (the "Trust") is a unit investment trust consisting
primarily of a portfolio of common stocks issued by companies which, in
the opinion of the Underwriter, have the potential for increasing
dividend income and capital appreciation (the "Equity Securities"). In
addition, up to 10% of the portfolio may consist of convertible
subordinated debentures (the "Convertible Bonds"). Collectively, the
Equity Securities and the Convertible Bonds are referred to herein as
the "Securities."
The objective of the Trust is to provide the potential for increasing
dividend income and capital appreciation by investing in the Securities.
See "Schedule of Investments." The Trust has a mandatory termination
date ("Mandatory Termination Date" or "Trust Ending Date") as set forth
under "Summary of Essential Information." There is, of course, no
guarantee that the objective of the Trust will be achieved. Each Unit of
the Trust represents an undivided fractional interest in all the
Securities deposited in the Trust.
The Equity Securities deposited in the Trust's portfolio have no fixed
maturity date and the value of these underlying Equity Securities will
fluctuate with changes in the values of stocks in general. Convertible
Bonds are securities that are convertible into shares of common stock of
the issuing corporation under specified conditions. See "Portfolio" and
"Rights of Unit Holders-How May Securities be Removed from the Trust?"
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Securities in the Trust or cash (including a letter of
credit) with instructions to purchase additional Securities in the
Trust. Such deposits of additional Securities or cash will be done in
such a manner that the original proportionate relationship amongst the
individual issues of the Securities shall be maintained. Any deposit by
the Sponsor of additional Securities, or the purchase of additional
Securities pursuant to a cash deposit, will duplicate, as nearly as is
practicable, the original proportionate relationship established on the
Initial Date of Deposit, not the actual proportionate relationship on
the subsequent date of deposit, since the two may differ. Any such
difference may be due to the sale, redemption or liquidation of any
Securities deposited in the Trust on the Initial, or any subsequent,
Date of Deposit. See "What is the FT Series?" and "Rights of Unit
Holders-How May Securities be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
during the initial offering period is equal to a pro rata share of the
offering prices of the Convertible Bonds and the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust,
plus an initial sales charge equal to the difference between the maximum
sales charge of 5.0% of the Public Offering Price and the maximum
remaining deferred sales charge, initially $.35 per Unit. Commencing on
________, 199_, and on the last business day of each month thereafter,
through ________, 199_, 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 5.0% of the Public Offering Price equivalent to 5.076% of the net
amount invested, exclusive of the deferred sales charge), subject to a re-
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
The Ohio Company
The date of this Prospectus is , 1998
Page 1
duction beginning _________ 1, 199_. A pro rata share of interest
accrued but unpaid on the Convertible Bonds after the First Settlement
Date to the date of settlement and accumulated dividends, if any, in the
Income Account is included in the Public Offering Price. Upon completion
of the deferred sales charge period, the secondary market Public
Offering Price per Unit for the Trust will not include deferred
payments, but will instead include only a one-time initial sales charge
of 5.0% of the Public Offering Price (equivalent to 5.076% of the net
amount invested), which will be reduced by 1/2 of 1% on each _________,
1, commencing _________ 1, 199_ to a minimum sales charge of 3.0%. The
minimum amount which an investor may purchase of the Trust is $1,000.
The sales charge is reduced on a graduated scale for sales involving at
least $ . See "Public Offering-How is the Public Offering
Price Determined?"
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
Estimated Net Annual Distributions. The estimated net annual
distributions per Unit to Unit holders (based on most recent quarterly
or semi-annual ordinary dividend declared with respect to the Equity
Securities and the stated coupon rate of the Convertible Bonds) at the
opening of business on the Initial Date of Deposit was $ . This
estimate will vary with changes in the Trust's fees and expenses, in
dividends or interest received, and with the sale of the Securities.
There is no assurance that the estimated net annual distributions will
be realized in the future.
Dividend and Capital Distributions. Distributions of dividends and
capital (in the case of the Equity Securities) and income and principal
(in the case of the Convertible Bonds), if any, received by the Trust,
net of expenses of the Trust, will be paid on the Distribution Date to
Unit holders of record on the Record Date as set forth in the "Summary
of Essential Information." Distributions of funds in the Capital
Account, if any, will be made at least annually in December of each
year. Any distribution will be net of the expenses of the Trust. See
"What is the Federal Tax Status of Unit Holders?" Additionally, upon
termination of the Trust, the Trustee will distribute, upon surrender of
Units for redemption, to each Unit holder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights of
Unit Holders-How are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period, while
under no obligation to do so, the Sponsor intends to, and the
Underwriter may, maintain a market for Units of the Trust and offer to
repurchase such Units at prices which are based on the aggregate bid
side evaluation of the Convertible Bonds and the aggregate underlying
value of Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the bid prices of
over-the-counter traded Equity Securities) plus or minus cash, if any,
in the Capital and Income Accounts of the Trust. If a secondary market
is maintained during the initial offering period, the prices at which
Units will be repurchased will also be based upon the aggregate offering
side evaluation of the Convertible Bonds and the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus cash, if any,
in the Capital and Income Accounts of the Trust. If a secondary market
is not maintained, a Unit holder may redeem Units through redemption at
prices based upon the aggregate offering side evaluation (during the
initial offering period) or aggregate bid side evaluation (subsequent to
the initial offering period) of the Convertible Bonds and the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and
either the ask prices (during the initial offering period) or the bid
prices (subsequent to the initial offering period) of over-the-counter
traded Equity Securities) plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of the Trust. A Unit holder
tendering 2,500 Units or more for redemption may request a distribution
of shares of Equity Securities (reduced by customary transfer and
registration charges) (an "In-Kind Distribution") in lieu of payment in
cash. Unit holders electing an In-Kind Distribution will receive a cash
payment representing their proportionate amount of the Convertible
Bonds. Any deferred sales charge remaining on Units at the time of their
sale or redemption will be collected at that time. See "Rights of Unit
Holders-How May Units be Redeemed?"
Termination. Commencing no later than the Mandatory Termination Date,
Equity Securities will begin to be sold as prescribed by the Sponsor.
The Trustee shall provide written notice of any termination of the Trust
to Unit holders which will specify when Unit holders may surrender their
certificates for cancellation and will include a form to enable Unit
holders to elect an In-Kind Distribution if such Unit holder owns at
Page 2
least 2,500 Units of the Trust, rather than to receive payment in cash
for such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Equity Securities. Unit holders electing
an In-Kind Distribution will receive a cash payment representing their
proportionate amount of the Convertible Bonds. To be effective, the
election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the Trustee
at least ten business days prior to the Mandatory Termination Date. Unit
holders not electing a distribution of shares of Equity Securities will
receive a cash distribution within a reasonable time after the Trust is
terminated. See "Rights of Unit Holders-How are Income and Capital
Distributed?" and "Other Information-How May the Indenture be Amended or
Terminated?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Securities or the general condition of the stock
market, volatile interest rates or economic recession. The Trust's
portfolio is not managed and Securities will not be sold by the Trust
regardless of market fluctuations, although some Securities may be sold
under certain limited circumstances. See "Portfolio-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities- , 1998
Underwriter: The Ohio Company
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount (Stated Value) of Convertible Bonds in the Trust $
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Securities per Unit $
Maximum Sales Charge of 5.0% of the Public Offering Price per Unit
(5.076% 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 the aggregate offering side evaluation of the
Convertible Bonds and the aggregate underlying value of Equity Securities) (4) $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number
First Settlement Date , 1998
Mandatory Termination Date
Discretionary Liquidation Amount The Trust may be terminated if the value thereof is less than the lower of
$2,000,000 or 20% of the total value of Equity Securities deposited in the
Trust during the initial offering period.
Trustee's Annual Fee $ per Unit outstanding.
Evaluator's Annual Fee $ per Unit outstanding, payable to an affiliate of the Sponsor.
Evaluations for purposes of sale, purchase or redemption of Units are made
as of the close of trading (generally 4:00 p.m. Eastern time) on the New
York Stock Exchange on each day on which it is open.
Supervisory Fee (5) Maximum of $ per Unit outstanding annually payable to an affiliate
of the Sponsor.
Estimated Annual Amortization of
Organizational and Offering Costs (6) $ per Unit.
Initial Distribution April 1, 1998 to Unit holders of record on March 15, 1998.
Regular Income Distribution Record Date Fifteenth day of each March, June, September and December commencing June
15, 1998.
Regular Income Distribution Date (7) Last day of each March, June, September and December commencing June 30,
1998.
____________
<FN>
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) Each 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. The Convertible Bonds are valued at
their aggregate offering side evaluation.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for the Trust of 5.0% 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 Trust. In addition to the
initial sales charge, Unit holders will pay a deferred sales charge of
$ per Unit per month commencing ________, 199_ and on the last
business day of each month thereafter through ________, 199_. 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 ________ 1, 199_,
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 5.0% of the Public Offering Price and will decrease by 1/2 of
1% on each subsequent _________, 1, commencing _________ 1, 199_ 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 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 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 "Rights of Unit Holders-How May Units be Redeemed?"
(5) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit.
(6) The Trust (and therefore Unit holders) will bear all or a portion of
its organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and
states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee but not including the expenses
incurred in the printing of preliminary and final prospectuses, and
expenses incurred in the preparation and printing of brochures and other
advertising materials and any other selling expenses) as is common for
mutual funds. Total organizational and offering expenses will be charged
off over a period not to exceed five years from the Initial Date of
Deposit. See "What are the Expenses and Charges?" and "Statement of Net
Assets."
(7) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $0.01 per Unit. Notwithstanding, distributions of funds in the
Capital Account, if any, will be made in December of each year.
</FN>
</TABLE>
Page 4
FEE TABLE
This Fee Table is intended to help you to understand the costs and
expenses that you will bear directly or indirectly. See "Public
Offering" and "What are the Expenses and Charges?" Although the Trust
has a term of approximately eight years and is a unit investment trust
rather than a mutual fund, this information is presented to permit a
comparison of fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of public offering price) %(a) $
Deferred sales charge
(as a percentage of public offering price) %(b)
________ ________
% $
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee % $
Portfolio supervision, bookkeeping, administrative, amortization
of organizational and offering costs and evaluation fees %
Other operating expenses
________ ________
Total % $
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 8 Years
______ _______ _______ _______
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Strategic Income and Growth Trust,
Series 1 has an estimated operating expense ratio of % and
a % annual return on the investment throughout the periods $ $ $ $
_____________
<FN>
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 5.0% and the maximum remaining deferred
sales charge (initially $ per Unit) and would exceed 1.5% 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 ________, 199_ through
________, 199_. If a Unit holder sells or redeems Units before all of
these deductions have been made, the balance of the deferred sales
charge payments remaining will be deducted from the sales or redemption
proceeds. If the Unit price is less than $10.00 per Unit, the deferred
sales charge will exceed 3.5%. Units purchased subsequent to the initial
deferred sales charge payment will be subject to the previously
collected deferred sales charge payments at the time of purchase and any
remaining deferred sales charge payments not yet collected.
</FN>
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example. In addition, while the Trust only has a term of approximately
eight years, investors may be able to reinvest their proceeds into a
subsequently offered trust, subject to additional sales charges. In this
scenario the actual expenses incurred by an investor would exceed those
set forth above.
Page 5
STRATEGIC INCOME AND GROWTH TRUST, SERIES 1
FT 237
What is the FT Series?
FT 237 is one of a series of investment companies created by the Sponsor
under the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated by
a different series number (the "Trust"). This Series consists of an
underlying separate unit investment trust designated as: Strategic
Income and Growth Trust, Series 1. The Trust was created under the laws
of the State of New York pursuant to a Trust Agreement (the
"Indenture"), dated the Initial Date of Deposit, with Nike Securities
L.P. as Sponsor, The Chase Manhattan Bank as Trustee and First Trust
Advisors L.P. as Portfolio Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of the 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 Trust, the Trustee delivered to the Sponsor
documents evidencing the entire ownership of the Trust.
The objective of the Trust is to provide for the potential for
increasing dividend income and capital appreciation by investing in the
Securities. The portfolio of the Trust consists primarily of Equity
Securities, although up to 10% of the portfolio may be invested in
Convertible Bonds. The portfolio consists of well-respected companies in
strong financial positions traded on major U.S. exchanges. The portfolio
distributions are expected to yield in excess of 4%. The Equity
Securities included in the portfolio have a good history of annual
dividend increases and currently have a low relative price to earnings
ratio. For example, the Equity Securities selected for the portfolio as
a whole have raised their dividends over the past five years at a rate
approximately double that of the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index") and have a price to earnings ratio as of
, 1998 of , which is approximately 27% lower than that of
the S&P 500 Index. In addition, the Equity Securities in the portfolio
have historically had approximately 30% less volatility than the S&P 500
Index over the last 12 months, as measured by Beta, a commonly used
measure of volatility. There is, however, no guarantee that the
objective of the Trust will be achieved and an investment in the Trust
should be made with an understanding of the market risks and investment
characteristics of both bonds and common stocks.
With the deposit of the Securities on the Initial Date of Deposit, the
Sponsor established a percentage relationship between the amounts of
individual Securities in the Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Securities in the Trust or cash
(including a letter of credit) with instructions to purchase additional
Securities in the Trust, and Units may be continuously offered for sale
to the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any deposit by
the Sponsor of additional Securities or cash will duplicate, as nearly
as is practicable, the original proportionate relationship and not the
actual proportionate relationship on the subsequent date of deposit,
since the two may differ. Any such difference may be due to the sale,
redemption or liquidation of any of the Securities deposited in the
Trust on the Initial, or any subsequent, Date of Deposit. See "Rights of
Unit Holders-How May Securities be Removed from the Trust?" The original
percentage relationship of each Security to the Trust is set forth
herein under "Schedule of Investments." Since the prices of the
underlying Securities will fluctuate daily, the ratio, on a market value
basis, will also change daily. The portion of Securities represented by
each Unit will not change as a result of the deposit of additional
Securities in the Trust. If the Sponsor deposits cash, however, existing
and new investors may experience a dilution of their investment and a
reduction in their anticipated income because of fluctuations in the
price of the Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Securities as close to the evaluation time or as close to the
evaluation price as possible. The Trustee may from time to time retain
and pay compensation to the Sponsor (or an affiliate of the Sponsor) to
act as agent for the Trust with respect to acquiring Securities for the
Trust. In acting in such capacity, the Sponsor or its affiliate will be
held subject to the restrictions under the Investment Company Act of
1940, as amended.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Securities as set forth under
Page 6
"Summary of Essential Information." To the extent that Units of the
Trust are redeemed, the aggregate value of the Securities in the Trust
will be reduced and the undivided fractional interest represented by
each outstanding Unit of the Trust will increase. However, if additional
Units are issued by the Trust in connection with the deposit of
additional Securities or cash by the Sponsor, the aggregate value of the
Securities in the Trust will be increased by amounts allocable to
additional Units, and the fractional undivided interest represented by
each Unit of the Trust will be decreased proportionately. See "Rights of
Unit Holders-How May Units be Redeemed?"
What are the Expenses and Charges?
With the exception of the brokerage fees discussed above and bookkeeping
and other administrative services provided to the Trust, for which the
Sponsor will be reimbursed in amounts as set forth under "Summary of
Essential Information," the Sponsor will not receive any fees in
connection with its activities relating to the Trust. Certain of the
expenses incurred in establishing the Trust, including the cost of the
initial preparation of documents relating to the Trust, Federal and
state registration fees, the initial fees and expenses of the Trustee,
legal expenses and any other out-of-pocket expenses may be paid by the
Sponsor, and may, in part, be paid by the Trustee.
First Trust Advisors L.P., an affiliate of the Sponsor, will receive an
annual supervisory fee, which is not to exceed the amount set forth
under "Summary of Essential Information," for providing portfolio
supervisory services for the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year, except for the
year or years in which an initial offering period occurs, in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. In providing such supervisory services, the Portfolio
Supervisor may purchase research services from a variety of sources
which may include the Underwriter or dealers of the Trust.
Subsequent to the initial offering period, First Trust Advisors L.P., an
affiliate of the Sponsor, in its capacity as Evaluator for the Trust,
will receive a fee as indicated in the "Summary of Essential Information."
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust an annual fee as set forth in "Summary
of Essential Information." Such fee will be based upon the largest
aggregate number of Units of the Trust outstanding at any time during
the year. For a discussion of the services performed by the Trustee
pursuant to its obligations under the Indenture, reference is made to
the material set forth under "Rights of Unit Holders."
The Trustee's and above described fees are payable from the Income
Account of the Trust to the extent funds are available, and then from
the Capital Account of the Trust. Since the Trustee has the use of the
funds being held in the Capital and Income Accounts for payment of
expenses and redemptions and since such Accounts are noninterest-bearing
to Unit holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to the Trust is expected to result from
the use of these funds.
Each of the above mentioned fees may be increased without approval of
the Unit holders by amounts not exceeding proportionate increases under
the category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor. In addition,
with respect to the fees payable to the Sponsor or an affiliate of the
Sponsor for providing bookkeeping and other administrative services,
supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for the Trust, but at
no time will the total amount received for such services rendered to all
unit investment trusts of which Nike Securities L.P. is the Sponsor in
any calendar year exceed the actual cost to the Sponsor or its affiliate
of supplying such services in such year.
Certain or all of the expenses incurred in establishing the Trust,
including costs of preparing the registration statement, the trust
indenture and other closing documents, registering Units with the
Securities and Exchange Commission and registering or qualifying the
Units with the states, the initial audit of the Trust's portfolio, legal
fees, the initial fees and expenses of the Trustee and any other out-of-
pocket expenses, will be paid by the Trust and charged off over a period
not to exceed five years from the Initial Date of Deposit. The following
additional charges are or may be incurred by the Trust: all legal and
annual auditing expenses of the Trustee incurred by or in connection
with its responsibilities under the Indenture; the expenses and costs of
any action undertaken by the Trustee to protect the Trust and the rights
Page 7
and interests of the Unit holders; fees of the Trustee for any
extraordinary services performed under the Indenture; indemnification of
the Trustee for any loss, liability or expense incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with its acceptance or administration of the Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee, when
paid or owing to the Trustee, are secured by a lien on the Trust. In
addition, the Trustee is empowered to sell Securities in the Trust in
order to make funds available to pay all these amounts if funds are not
otherwise available in the Income and Capital Accounts of the Trust.
Since the Securities are all common stocks and the income stream
produced by dividend payments is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Securities will have
to be sold to meet Trust expenses. These sales may result in capital
gains or losses to Unit holders. See "What is the Federal Tax Status of
Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. So
long as the Sponsor is making a secondary market for the Units, the
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.0050 per Unit. Unit holders of the Trust covered by
an audit may obtain a copy of the audited financial statements upon
request.
How is Accrued Interest Treated?
Accrued interest is the accumulation of unpaid interest on a security
from the last day on which interest thereon was paid. Interest on the
Convertible Bonds in the Trust generally is paid semi-annually to the
Trust. However, interest on the Convertible Bonds in the Trust is
accounted for daily on an accrual basis. Because of this, the Trust
always has an amount of interest earned but not yet collected by the
Trustee because of non-collected coupons. For this reason, with respect
to sales settling subsequent to the First Settlement Date, the Public
Offering Price of Units will have added to it the proportionate share of
accrued and undistributed interest to the date of settlement.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price in
the sale of Units to the public, the Trustee will advance the amount of
accrued interest as of the First Settlement Date and the same will be
distributed to the Sponsor as the Unit holder of record as of the First
Settlement Date. Consequently, the amount of accrued interest to be
added to the Public Offering Price of Units will include only accrued
interest from the First Settlement Date to the date of settlement, less
any distributions from the Interest Account subsequent to the First
Settlement Date.
Except through an advancement of its own funds, the Trustee has no cash
for distribution to Unit holders of amounts applicable to the
Convertible Bonds until it receives interest and dividend payments on
the Convertible Bonds in the Trust. The Trustee will recover its
advancements without interest or other costs to the Trust from interest
or dividends received on the Convertible Bonds in the Trust. When these
advancements have been recovered, regular distributions of income to
Unit holders will commence. See "Rights of Unit Holders-How are Income
and Capital Distributed?"
Because of the varying interest payment dates of the Convertible Bonds,
accrued interest at any point in time will be greater than the amount of
interest actually received by the Trust and distributed to Unit holders.
Therefore, there will always remain an item of accrued interest that is
added to the value of the Units. If a Unit holder sells or redeems all
or a portion of his Units, he will be entitled to receive his
proportionate share of the accrued interest from the purchase of his
Units. Since the Trustee has the use of amounts held in the Income
Account for distributions to Unit holders and since such Account is non-
interest-bearing to Unit holders, the Trustee benefits thereby.
Page 8
What is the Federal Tax Status of Unit Holders?
This is a general discussion of certain of the Federal income tax
consequences of the purchase, ownership and disposition of the Units.
The summary is limited to investors who hold the Units as "capital
assets" (generally, property held for investment) within the meaning of
Section 1221 of the Internal Revenue Code of 1986 (the "Code"). Unit
holders should consult their tax advisers in determining the Federal,
state, local and any other tax consequences of the purchase, ownership
and disposition of Units in the Trust.
Neither the Sponsor nor Chapman and Cutler has reviewed the Equity
Securities to be deposited in the Trust. Rather, they have assumed that
(i) (A) Equity Securities qualify as equity for Federal income tax
purposes and that, accordingly, amounts received by the Trust with
respect to the Equity Securities will qualify as dividends as defined in
Section 316 of the Code and (B) such dividends would generally be
eligible for the dividends received deduction if the Equity Securities
were directly held by a corporate Unit holder for at least 46 days and
(ii) the Convertible Bonds qualify as debt for Federal income tax
purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of the Trust under the
Code; and the income of the Trust will be treated as income of the Unit
holders thereof under the Code. Each Unit holder will be considered to
have received his pro rata share of the income derived from each
Security when such income is considered to be received by the Trust.
Each Unit holder will also be required to include in taxable income for
Federal income tax purposes, original issue discount with respect to his
interest in any Convertible Bonds held by the Trust at the same time and
in the same manner as though the Unit holder were the direct owner of
such interest.
2. Each Unit holder will be considered to have received all of the
dividends and interest paid on his or her pro rata portion of each
Security when such dividends and interest are received by the Trust
regardless of whether such dividends or interest are used to pay a
portion of the deferred sales charge. Unit holders will be taxed in this
manner regardless of whether distributions from the Trust are actually
received by the Unit holder or are automatically reinvested.
3. Each Unit holder will have a taxable event when the Trust disposes
of a 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, generally including sales charges, is
allocated among his pro rata portion of each Security held by the Trust
(in proportion to the fair market values thereof on the valuation date
closest to the date the Unit holder purchases his Units) in order to
determine his tax basis for his pro rata portion of each Security held
by such Trust. Unit holders must reduce the tax basis of their Units for
their share of accrued interest received, if any, on Convertible Bonds
delivered after the date the Unit holders pay for their Units to the
extent that such interest accrued on such Convertible Bonds during the
period from the Unit holder's settlement date to the date such
Convertible Bonds are delivered to the Trust and, consequently, such
Unit holders may have an increase in taxable gain or reduction in
capital loss upon the disposition of such Units. It should be noted that
certain legislative proposals have been made which could affect the
calculation of basis for Unit holders holding securities that are
substantially identical to the Securities. Unit holders should consult
their own tax advisors with regard to calculation of basis. For Federal
income tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with respect
to an Equity Security held by the Trust is taxable as ordinary income to
the extent of such corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends paid on such
Equity Security which exceed such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, the holding period for such capital gain will be
determined by the period of time a Unit holder has held his Units.
Page 9
4. The basis of each Unit and of each Convertible Bond which was
issued with original issue discount (or which has market discount) must
be increased by the amount of accrued original issue discount (and
market discount, if the Unit holder elects to include market discount in
income as it accrues) and the basis of each Unit and of each Convertible
Bond which was purchased by the Trust at a premium must be reduced by
the annual amortization of bond premium which the Unit holder has
properly elected to amortize under Section 171 of the Code. The tax
basis reduction requirements of the Code relating to amortization of
bond premium may, under some circumstances, result in the Unit holder
realizing a taxable gain when his Units are sold or redeemed for an
amount equal to or less than his original cost. Original issue discount
is effectively treated as interest for Federal income tax purposes and
the amount of original issue discount in this case is generally the
difference between the bond's purchase price and its stated redemption
price at maturity. A Unit holder will be required to include in gross
income for each taxable year the sum of his daily portions of any
original issue discount attributable to the Convertible Bonds held by
the Trust as such original issue discount accrues for such year even
though the income is not distributed to the Unit holders during such
year unless a Convertible Bond's original issue discount is less than a
"de minimis" amount as determined under the Code. To the extent the
amount of such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. In general, original issue
discount accrues daily under a constant interest rate method which takes
into account the semi-annual compounding of accrued interest. Unit
holders should consult their tax advisers regarding the Federal income
tax consequences and accretion of original issue discount.
5. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust
will generally be considered a capital gain (except in the case of a
dealer or a financial institution). A Unit holder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of
Securities held by the Trust will generally be considered a capital loss
(except in the case of a dealer or a financial institution). Unit
holders should consult their tax advisers regarding the recognition of
such capital gains and losses for Federal income tax purposes.
The Convertible Bonds-Premium. If a Unit holder's tax basis of his pro
rata portion in any Convertible Bonds held by the Trust exceeds the
amount payable by the issuer of the Convertible Bonds with respect to
such pro rata interest upon maturity (or, in certain cases, the call
date) of the Convertible Bond, such excess would be considered premium
which may be amortized by the Unit holder at the Unit holder's election
as provided in Section 171 of the Code. Unit holders should consult
their tax advisors regarding whether such election should be made and
the manner of amortizing premium.
The Convertible Bonds-Original Issue Discount. Certain of the
Convertible Bonds in the Trust may have been acquired with "original
issue discount." In the case of any Convertible Bonds in the Trust
acquired with "original issue discount" that exceeds a "de minimis"
amount as specified in the Code, such discount is includable in taxable
income of the Unit holders on an accrual basis computed daily, without
regard to when payments of interest on such Convertible Bonds are
received. The Code provides a complex set of rules regarding the accrual
of original issue discount. These rules provide that original issue
discount generally accrues on the basis of a constant compound interest
rate over the term of the Convertible Bonds. Unit holders should consult
their tax advisers as to the amount of original issue discount which
accrues.
Special original issue discount rules apply if the purchase price of the
Convertible Bond by the Trust exceeds its original issue price plus the
amount of original issue discount which would have previously accrued
based upon its issue price (its "adjusted issue price"). Similarly these
special rules would apply to a Unit holder if the tax basis of his pro
rata portion of a Convertible Bond issued with original issue discount
exceeds his pro rata portion of its adjusted issue price. Unit holders
should also consult their tax advisers regarding these special rules.
It is possible that a Corporate Bond that has been issued at an original
issue discount may be characterized as a "high-yield discount
obligation" within the meaning of Section 163(e)(5) of the Code. To the
extent that such an obligation is issued at a yield in excess of six
Page 10
percentage points over the applicable Federal rate, a portion of the
original issue discount on such obligation will be characterized as a
distribution on stock (e.g., dividends) for purposes of the dividends
received deduction which is available to certain corporations with
respect to certain dividends received by such corporation.
The Convertible Bonds-Market Discount. If a Unit holder's tax basis in
his pro rata portion of Convertible Bonds is less than the allocable
portion of such Convertible Bond's stated redemption price at maturity
(or, if issued with original issue discount, the allocable portion of
its "revised issue price"), such difference will constitute market
discount unless the amount of market discount is "de minimis" as
specified in the Code. Market discount accrues daily computed on a
straight line basis, unless the Unit holder elects to calculate accrued
market discount under a constant yield method. Unit holders should
consult their tax advisers as to the amount of market discount which
accrues.
Accrued market discount is generally includable in taxable income to the
Unit holders as ordinary income for Federal tax purposes upon the
receipt of serial principal payments on the Convertible Bonds, on the
sale, maturity or disposition of such Convertible Bonds by the Trust,
and on the sale by a Unit holder of Units, unless a Unit holder elects
to include the accrued market discount in taxable income as such
discount accrues. If a Unit holder does not elect to annually include
accrued market discount in taxable income as it accrues, deductions for
any interest expense incurred by the Unit holder which is incurred to
purchase or carry his Units will be reduced by such accrued market
discount. In general, the portion of any interest expense which was not
currently deductible would ultimately be deductible when the accrued
market discount is included in income. Unit holders should consult their
tax advisers regarding whether an election should be made to include
market discount in income as it accrues and as to the amount of interest
expense which may not be currently deductible.
The Convertible Bonds-Basis. The tax basis of a Unit holder with respect
to his interest in a Convertible Bond is increased by the amount of
original issue discount (and market discount, if the Unit holder elects
to include market discount, if any, on the Convertible Bonds held by the
Trust in income as it accrues) thereon properly included in the Unit
holder's gross income as determined for Federal income tax purposes and
reduced by the amount of any amortized premium which the Unit holder has
properly elected to amortize under Section 171 of the Code. A Unit
holder's tax basis in his Units will equal his tax basis in his pro rata
portion of all of the assets of the Trust.
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge for the Trust is deferred. It is possible that for
Federal income tax purposes a portion of the deferred sales charge may
be treated as interest which would be deductible by a Unit holder
subject to limitations on the deduction of investment interest. In such
a case, the non-interest portion of the deferred sales charge would be
added to the Unit holder's tax basis in his or her Units. The deferred
sales charge could cause the Unit holder's Units to be considered to be
debt-financed under Section 246A of the Code which would result in a
small reduction of the dividends-received deduction. In any case, the
income (or proceeds from redemption) a Unit holder must take into
account for Federal income tax purposes is not reduced by amounts
deducted to pay the deferred sales charge. Unit holders should consult
their own tax advisers as to the income tax consequences of the deferred
sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by the
Trust (to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under, and during
the period specified in, 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
Page 11
such corporation.
To the extent dividends received by a Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of
such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of the Trust's Expenses by Unit Holders.
Each Unit holder's pro rata share of each expense paid by the Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by such Unit holder. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when a Security is disposed of by the
Trust or if the Unit holder disposes of a Unit. For taxpayers other than
corporations, net capital gain (which is defined as net long-term
capital gain over net short-term capital loss for the taxable year) is
subject to a maximum marginal stated tax rate of either 28% or 20%,
depending upon the holding periods of the capital assets. Capital loss
is long-term if the holding period for the asset is more than one year,
and is short-term if the holding period for the asset is one year or
less. Generally, capital gains realized from assets held for more than
one year but not more than 18 months are taxed at a maximum marginal
stated tax rate of 28% and capital gains realized from assets (with
certain exclusions) held for more than 18 months are taxed at a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in
the lowest tax bracket). Further, capital gains realized from assets
held for one year or less are taxed at the same rates as ordinary
income. Legislation is currently pending that provides the appropriate
methodology that should be applied in netting the realized capital gains
and losses. Such legislation is proposed to be effective retroactively
for tax years ending after May 6, 1997. The Internal Revenue Service has
released preliminary guidance which provides that, in general, pass-
through entities may designate their capital gain dividends as either a
20% rate gain distribution or a 28% rate gain distribution, depending on
the nature of the gain received by the pass-through entity. Unit holders
should consult their own tax advisers as to the tax rate applicable to
capital gain dividends. The date on which a Unit is acquired (i.e., the
"trade date") is excluded for purposes of determining the holding period
of the Unit. It should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect
relative differences at which ordinary income and capital gains are taxed.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of
the Trust involved including his or her pro rata portion of all the
Securities represented by the Unit. The Taxpayer Relief Act of 1997 (the
"1997 Tax Act") includes provisions that treat certain transactions
designed to reduce or eliminate risk of loss and opportunities for gain
(e.g., short sales, offsetting notional principal contracts, futures or
forward contracts, or similar transactions) as constructive sales for
purposes of recognition of gain (but not loss) and for purposes of
determining the holding period. Unit holders should consult their own
tax advisors with regard to any such constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units or Termination of the Trust. As discussed in "Rights of Unit
Holders-How are Income and Capital Distributed?", under certain
circumstances a Unit holder who owns at least 2,500 Units of the Trust
may request an In-Kind Distribution upon the redemption of Units or the
termination of the Trust. The Unit holder requesting an In-Kind
Page 12
Distribution will be liable for expenses related thereto (the
"Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See "Rights
of Unit Holders-How are Income and Capital Distributed?" As previously
discussed, prior to the redemption of Units or the termination of the
Trust, a Unit holder is considered as owning a pro rata portion of each
of the Trust's assets for Federal income tax purposes. The receipt of an
In-Kind Distribution will result in a Unit holder receiving an undivided
interest in whole Securities 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 Securities. A "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 Securities in
exchange for his or her pro rata portion in the Securities held by the
Trust. However, if a Unit holder also receives cash in exchange for a
fractional share of an Security held by the Trust, such Unit holder will
generally recognize gain or loss based upon the difference between the
amount of cash received by the Unit holder and his tax basis in such
fractional share of an Security held by the Trust.
Because the Trust will own many Securities, a Unit holder who requests
an In-Kind Distribution will have to analyze the tax consequences with
respect to each Security owned by the Trust. The amount of taxable gain
(or loss) recognized upon such exchange will generally equal the sum of
the gain (or loss) recognized under the rules described above by such
Unit holder with respect to each Security owned by the 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
Securities held in the Trust in accordance with the proportion of the
fair market values of such Securities on the valuation date nearest the
date the Units are purchased in order to determine such Unit holder's
tax basis for his pro rata portion of each Security.
A Unit holder's tax basis in his Units and his pro rata portion of an
Equity Security held by the Trust will be reduced to the extent
dividends paid with respect to such Equity Security are received by the
Trust which are not taxable as ordinary income as described above. Unit
holders must reduce the tax basis of their Units for their share of
accrued interest received, if any, on Convertible Bonds delivered after
the date the Unit holders pay for their Units to the extent that such
interest accrued on such Convertible Bonds during the period from the
Unit holder's settlement date to the date such Convertible Bonds are
delivered to the Trust and, consequently, such Unit holders may have an
increase in taxable gain or reduction in capital loss upon the
disposition of such Units.
Foreign Investors. A Unit holder who is a foreign investor (i.e., an
investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust) will generally be subject to United States
Federal income taxes, including withholding taxes, on distributions from
the Trust relating to such investor's share of dividend income paid on
the Equity Securities (other than those that are not treated as United
States source income, if any). However, interest income (including any
original issue discount) on, or any gain from the sale or other
disposition of, his pro rata interest in any Convertible Bond or the
sale of his Units will not be subject to United States Federal income
taxes, including withholding taxes, provided that all of the following
conditions are met: (i) the interest income or gain is not effectively
connected with the conduct by the foreign investor of a trade or
business within the United States, (ii) if the interest is United States
source income (which is the case for each Convertible Bond held by the
Trust) and the Convertible Bond is issued after July 18, 1984 (which is
the case for each Convertible Bond held by the Trust), then the foreign
investor does not own, directly or indirectly, 10% or more of the total
combined voting power of all classes of voting stock of the issuer of
the Convertible Bond and the foreign investor is not a controlled
foreign corporation related (within the meaning of Section 864(d)(4) of
the Code) to the issuer of the Convertible Bond, (iii) with respect to
any gain, the foreign investor (if an individual) is not present in the
United States for 183 days or more during his or her taxable year and
(iv) the foreign investor provides all certification which may be
required of his status (foreign investors may contact the sponsor to
obtain a Form W-8 which must be filed with the Trustee and refiled every
three calendar years thereafter). Foreign investors should consult their
tax advisers with respect to United States tax consequences of ownership
of Units.
It should be noted that the Tax Act includes a provision which
eliminates the exemption from United States taxation, including
withholding taxes, for certain "contingent interest." The provision
applies to interest received after December 31, 1993. No opinion is
Page 13
expressed herein regarding the potential applicability of this provision
and whether United States taxation or withholding taxes could be imposed
with respect to income derived from the Units as a result thereof. Unit
holders and prospective investors should consult with their tax advisers
regarding the potential effect of this provision on their investment in
Units.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by the Trust to such Unit holder (including amounts
received upon the redemption of Units) will be subject to back-up
withholding. Distributions by the Trust (other than those that are not
treated as U.S. source income, if any) will generally be subject to U.S.
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-U.S.
persons. Such persons should consult their tax advisers.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unit holders should consult their tax
advisers regarding the potential tax consequences relating to the
payment of any such withholding taxes by the Trusts. Any dividends
withheld as a result thereof will nevertheless be treated as income to
the Unit holders. Because, under the grantor trust rules, an investor is
deemed to have paid directly his share of foreign taxes that have been
paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for U.S. income tax purposes with respect to such
taxes. The 1997 Tax Act imposes a required holding period for such
credits. Investors should consult their tax advisers with respect to
foreign withholding taxes and foreign tax credits.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trust Eligible for
Retirement Plans?"
Except as specifically provided above, the foregoing discussion relates
only to the tax treatment of United States Unit holders with regard to
United States Federal income taxes; Unit holders may be subject to
foreign, state and local taxation. As used herein, the term "U.S. Unit
holder" means an owner of a Unit in the Trust that (a) is (i) for United
States Federal income tax purposes a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is
subject to United States Federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unit holder in paragraph (a)
but whose income from a Unit is effectively connected with such Unit
holder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and
gain on the Units will be taxable. Unit holders should consult their tax
advisers regarding potential state or local taxation with respect to the
Units.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, each Trust is not an association taxable as a
corporation and the income of such Trusts will be treated as the income
of the Unit holders thereof.
Why are Investments in the Trust Eligible for Retirement Plans?
Units of the Trust are eligible for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans. Generally, the Federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
Page 14
PORTFOLIO
What are Convertible Bonds?
A portion of the Trust consists of different issues of Convertible
Bonds, all of which are listed on a national securities exchange or are
traded in the over-the-counter market. Convertible Bonds have a
conversion privilege which, under specified circumstances, offers the
holder the right to exchange such security for common stock of the
issuing corporation. Convertible Bonds obligate the issuing company to
pay a stated annual rate of interest and to return the principal amount
after a specified period of time. The income offered by Convertible
Bonds is generally higher than the dividends received from the
underlying common stock, but lower than similar quality non-convertible
debt securities. See "What are the Securities Selected for the Strategic
Income and Growth Trust, Series 1?" for a general description of the
companies.
What are Equity Securities?
The Trust consists of different issues of Equity Securities issued by
companies listed on a national securities exchange or The Nasdaq Stock
Market or traded in the over-the-counter market. See "What are the
Securities Selected for the Strategic Income and Growth Trust, Series
1?" for a general description of the companies.
Risk Factors. An investment in Units of the Trust should be made with an
understanding of the problems and risks such an investment may entail.
The Trust consists of such of the Convertible Bonds and Equity
Securities listed under "Schedule of Investments" as may continue to be
held from time to time in the Trust and any additional Securities
acquired and held by the Trust pursuant to the provisions of the Trust
Agreement, together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any
failure in any of the Securities. However, should any contract for the
purchase of any of the Securities initially deposited hereunder fail,
the Sponsor will, unless substantially all of the moneys held in the
Trust to cover such purchase are reinvested in substitute 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 Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from
such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Securities
under certain limited circumstances. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell or keep any securities or other
property acquired in exchange for Securities such as those acquired in
connection with a merger or other transaction. See "Rights of Unit
Holders-How May Securities be Removed from the Trust?" Securities,
however, will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation or
depreciation.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, the Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions and the value of the Trust
will be adversely affected if trading markets for the Equity Securities
are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Equity Securities or the
general condition of the common stock market may worsen, and the value
of the Equity Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
Page 15
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common
stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or
holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right
to receive dividends only when and if and in the amounts declared by the
issuer's board of directors, and they have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
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.
An investment in Units should also be made with an understanding of the
risks which an investment in convertible bonds entails. Convertible
bonds generally offer income yields that are higher than the dividend
yield, if any, of the underlying common stock, but lower than the yield
of non-convertible debt securities issued by the corporation of similar
investment quality. Convertible bonds are usually priced at a premium to
their conversion value-i.e., the value of the common stock received if
the holder were to exchange the convertible bond. The holder of the
convertible security may choose at any time to exchange the convertible
security for a specified number of shares of the common stock of the
corporation, or occasionally a subsidiary company, at a specified price,
as defined by the corporation when the security is issued. Accordingly,
the value of the convertible obligation may generally be expected to
increase (decrease) as the price of the associated common stock
increases (decreases). Also, the market value of convertible securities
tends to be influenced by the level of interest rates and tends to
decline as interest rates increase and, conversely, to increase as
interest rates decline. Convertible securities rank senior to common
stocks in an issuer's capital structure, but are junior to non-
convertible debt securities. As convertible securities are considered
junior to any non-convertible debt securities issued by the corporation,
convertible securities are typically rated by established credit rating
agencies at one level below the rating on such corporation's non-
convertible debt.
Certain of the Securities in the Trust are in ADR or GDR form. ADRs,
which evidence American Depositary Receipts and GDRs, which evidence
Global Depositary Receipts, represent common stock deposited with a
custodian in a depositary. American Depositary Shares and Global
Depositary Shares (collectively, the "Depositary Receipts") are issued
by a bank or trust company to evidence ownership of underlying
securities issued by a foreign corporation. These instruments may not
necessarily be denominated in the same currency as the securities into
which they may be converted. For purposes of the discussion herein, the
terms ADR and GDR generally include American Depositary Shares and
Global Depositary Shares, respectively.
Depositary Receipts may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the
request of market makers and acts as agent for the Depositary Receipts
holder, while the company itself is not involved in the transaction. In
a sponsored facility, the issuing company initiates the facility and
agrees to pay certain administrative and shareholder-related expenses.
Page 16
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary;
unsponsored facilities involve several depositaries with no contractual
relationship to the company. The depositary bank that issues Depositary
Receipts generally charges a fee, based on the price of the Depositary
Receipts, upon issuance and cancellation of the Depositary Receipts.
This fee would be in addition to the brokerage commissions paid upon the
acquisition or surrender of the security. In addition, the depositary
bank incurs expenses in connection with the conversion of dividends or
other cash distributions paid in local currency into U.S. dollars and
such expenses are deducted from the amount of the dividend or
distribution paid to holders, resulting in a lower payout per underlying
shares represented by the Depositary Receipts than would be the case if
the underlying share were held directly. Certain tax considerations,
including tax rate differentials and withholding requirements, arising
from applications of the tax laws of one nation to nationals of another
and from certain practices in the Depositary Receipts market may also
exist with respect to certain Depositary Receipts. In varying degrees,
any or all of these factors may affect the value of the Depositary
Receipts compared with the value of the underlying shares in the local
market. In addition, the rights of holders of Depositary Receipts may be
different than those of holders of the underlying shares, and the market
for Depositary Receipts may be less liquid than that for the underlying
shares. Depositary Receipts are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements
of the Securities Exchange Act of 1934.
For the Securities that are Depositary Receipts, currency fluctuations
will affect the U.S. dollar equivalent of the local currency price of
the underlying domestic share and, as a result, are likely to affect the
value of the Depositary Receipts and consequently the value of the
Securities. The foreign issuers of securities that are Depositary
Receipts may pay dividends in foreign currencies which must be converted
into dollars. Most foreign currencies have fluctuated widely in value
against the United States dollar for many reasons, including supply and
demand of the respective currency, the soundness of the world economy
and the strength of the respective economy as compared to the economies
of the United States and other countries. Therefore, for any securities
of issuers (whether or not they are in Depositary Receipt form) whose
earnings are stated in foreign currencies, or which pay dividends in
foreign currencies or which are traded in foreign currencies, there is a
risk that their United States dollar value will vary with fluctuations
in the United States dollar foreign exchange rates for the relevant
currencies.
Unit holders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. As the
holder of the Securities, the Trustee will have the right to vote all of
the voting stocks in the Trust and will vote such stocks in accordance
with the instructions of the Sponsor.
Investors should note that because the Underwriter uses the list of
Securities which comprise the portfolio in its independent capacity as
an investment advisor to individuals, mutual funds, employee benefit
plans and other institutions and persons and distributes this
information to various individuals and entities, the Underwriter may
recommend or effect from time to time the purchase or sale of one or
more of the Securities. This may have an effect on the prices of the
Securities which is adverse to the interest of the purchasers of Units
of the Trust. Additionally, this may have an impact on the price paid by
the Trust for the Securities as well as the price received upon
redemption of the Units or upon the termination of the Trust. Investors
should also note that Securities will not be removed from the Trust and
additional Units of the Trust may be created even if the Underwriter no
longer believes certain or all of the Securities have the potential to
provide capital appreciation over the life of the Trust or issues a sell
recommendation regarding any of the Securities included in the Trust.
The Underwriter has acquired or may acquire the Securities for the
Sponsor and thereby benefits from transaction fees. The Underwriter in
its general securities business acts as agent or principal in connection
with the purchase and sale of securities, including the Securities in
the Trust, and may act as a market maker in certain of the Equity
Securities. The Underwriter also from time to time may issue reports on
and make recommendations relating to securities, which may include the
Securities.
Page 17
What are the Securities Selected for the Strategic Income and Growth
Trust, Series 1?
CONVERTIBLE BONDS
Consolidated Natural Gas Company,
Hewlett-Packard Company,
National Semiconductor Corporation
EQUITY SECURITIES
American General Hospitality Corporation
American Home Products Corporation
Ameritech Corporation
Amoco Corporation
Anheuser-Busch Companies, Inc.
Banc One Corporation
Bankers Trust New York Corporation
B.A.T. Industries plc (ADR)
British Petroleum Company plc (ADR)
British Telecommunications plc (ADR)
Capstead Mortgage Corporation
Chrysler Corporation
Cinergy Corp.
Duke Energy Corporation
Duke Realty Investments, Inc.
E.I. du Pont de Nemours and Company
Emerson Electric Company
Fleet Financial Group, Inc.
GTE Corporation
H.J. Heinz Company
INMC Mortgage Holdings, Inc.
J.C. Penney Company, Inc.
Kimco Realty Corporation
Lucent Technologies, Inc.
Marsh & McLennan Companies, Inc.
Mellon Bank Corporation
Minnesota Mining & Manufacturing Company
Mobil Corporation
National City Corporation
NationsBank Corporation
Nationwide Health Properties, Inc.
PNC Bank Corp.
Phillip Morris Companies Inc.
Raytheon Company
Royal Dutch Petroleum Company
Telecom Corporation of New Zealand (ADR)
Texas Utilities Company
Western Resources, Inc.
Weyerhaeuser Company
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Securities will fluctuate over the life of the Trust
Page 18
and may be more or less than the price at which they were deposited in
the Trust. The Securities may appreciate or depreciate in value (or pay
dividends), depending on the full range of economic and market
influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Security will not be delivered ("Failed Contract Obligations")
to the Trust, the Sponsor is authorized under the Indenture to direct
the Trustee to acquire other Securities ("Replacement Securities"). Any
Replacement Security will be identical to those which were the subject
of the failed contract. The Replacement Securities must be purchased
within 20 days after delivery of the notice of a failed contract, and
the purchase price may not exceed the amount of funds reserved for the
purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
the Trust, and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Securities in the Trust and the
issuance of a corresponding number of additional Units. If the Sponsor
deposits cash, however, existing and new investors may experience a
dilution of their investment and a reduction in their anticipated income
because of fluctuations in the prices of the Securities between the time
of the cash deposit and the purchase of the Securities and because the
Trust will pay the associated brokerage fees.
The Trust consists of the Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) as may continue
to be held from time to time in the Trust and any additional Securities
acquired and held by the Trust pursuant to the provisions of the
Indenture (including provisions with respect to deposits into the Trust
of Securities or cash in connection with the issuance of additional
Units).
Once all of the Securities in the Trust are acquired, the Trustee will
have no power to vary the investments of the Trust, i.e., the Trustee
will have no managerial power to take advantage of market variations to
improve a Unit holder's investment, and may dispose of Securities only
under limited circumstances. See "Rights of Unit Holders-How May
Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Security which might
reasonably be expected to have a material adverse effect on the Trust.
At any time after the Initial Date of Deposit, litigation may be
instituted on a variety of grounds with respect to the Securities. The
Sponsor is unable to predict whether any such litigation will be
instituted, or if instituted, whether such litigation might have a
material adverse effect on the Trust.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisers. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Securities in the Trust or the issuers of the
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 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
offering side evaluation of the Convertible Bonds and the aggregate
Page 19
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and
the ask prices of over-the-counter traded Equity Securities), plus or
minus cash, if any, in the Income and Capital Accounts of the Trust,
plus an initial sales charge equal to the difference between the maximum
sales charge of 5.0% of the Public Offering Price and the maximum
remaining deferred sales charge, initially $ per Unit. Commencing on
________, 199_, and on the last business day of each month thereafter,
through ________, 199_, 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 Securities. The total maximum
sales charge assessed to Unit holders on a per Unit basis will be 5.0%
of the Public Offering Price (equivalent to 5.076% of the net amount
invested, exclusive of the deferred sales charge). Also added to the
Public Offering Price is a pro rata share of accumulated dividends, if
any, in the Income Account and a proportionate share of interest accrued
but unpaid on the Convertible Bonds after the First Settlement Date to
the date of settlement. See "How is Accrued Interest Treated?" Upon
completion of the deferred sales charge period, the secondary market
Public Offering Price per Unit for the Trust will not include deferred
payments, but will instead include only a one-time initial sales charge
of 5.0% of the Public Offering Price (equivalent to 5.076% of the net
amount invested), which will be reduced by 1/2 of 1% on each _________,
1, commencing _________ 1, 199_ to a minimum sales charge of 3.0%.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate offering side evaluation of the Convertible Bonds
and the aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the ask prices of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding, reduced by the deferred sales charge not yet paid. For
secondary market sales after the completion of the initial offering
period, the Sponsor's Repurchase Price is based on the aggregate bid
side evaluation of the Convertible Bonds and the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the bid prices of
over-the-counter traded Equity Securities), plus or minus cash, if any,
in the Income and Capital Accounts of the Trust, divided by the number
of outstanding Units in the Trust.
The minimum amount which an investor may purchase of the Trust is
$1,000. The applicable sales charge for both primary and secondary
market sales is reduced by a discount as indicated below for volume
purchases as a percentage of the Public Offering Price (except for sales
made pursuant to a "wrap fee account" or similar arrangements as set
forth below) as a percentage of the Public Offering Price (except for
sales made pursuant to a "wrap fee account" or similar arrangements as
set forth below):
<TABLE>
<CAPTION>
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
Underwriter, broker/dealer, bank or other selling agent. The reduced
sales charge structure will apply on all purchases of Units in the Trust
Page 20
by the same person on any one day from the Underwriter or any one
broker/dealer, bank or other selling agent. Additionally, Units
purchased in the name of the spouse of a purchaser or in the name of a
child of such purchaser under 21 years of age will be deemed, for the
purposes of calculating the applicable sales charge, to be additional
purchases by the purchaser. The reduced sales charges will also be
applicable to a trustee or other fiduciary purchasing securities for a
single trust estate or single fiduciary account. The purchaser must
inform the Underwriter, broker/dealer, bank or other selling agent of
any such combined purchase prior to the sale, in order to obtain the
indicated discount. In addition, with respect to 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, Underwriter, 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.
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or
asset management services or provide such services in connection with
the establishment of an investment account for which a comprehensive
"wrap fee" charge is imposed may purchase Units in the primary or
secondary market at the Public Offering Price, less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Securities and fluctuations in the amount of interest
accrued but unpaid on the Convertible Bonds. During the initial offering
period, the aggregate value of the Units of the Trust shall be
determined on the basis of the aggregate offering side evaluation of the
Convertible Bonds and the aggregate underlying value of the Equity
Securities therein plus or minus cash, if any, in the Income and Capital
Accounts of the Trust. The aggregate value of the Convertible Bonds is
determined by the Evaluator (1) on the basis of current offering prices
for the Convertible Bonds obtained from dealers or brokers who
customarily deal in convertible securities comparable to those held by
the Trust; (2) if such prices are not available for any of the
Convertible Bonds, on the basis of current market prices for comparable
securities; (3) by determining the value of the Convertible Bonds by
appraisal; or (4) by any combination of the above. The aggregate
underlying value of the Equity Securities 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 bid side
evaluation of the Convertible Bonds and the aggregate underlying value
of the Equity Securities therein, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. The aggregate underlying value of the Equity Securities for
secondary market sales is calculated in the same manner as described
above for sales made during the initial offering period with the
exception that bid prices are used instead of ask prices. The offering
price of the Convertible Bonds in the Trust may be expected to be
greater than the bid price of such Convertible Bonds by approximately 1-
2% of the aggregate principal amount or stated value of such Convertible
Bonds.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of Units on the date of settlement
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of
Page 21
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 Securities are deposited by the Sponsor, Units will be
distributed to the public at the then current Public Offering Price. The
initial offering period may be up to approximately 360 days. During such
period, the Sponsor may deposit additional Securities in the Trust and
create additional Units. Units reacquired by the Sponsor during the
initial offering period (at prices based upon the aggregate underlying
value of the Equity Securities in the Trust plus or minus a pro rata
share of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon the
termination of the initial offering period, unsold Units created or
reacquired during the initial offering period will be sold or resold at
the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Public Offering-Will There be a Secondary
Market?") may be offered by this prospectus at the secondary market
public offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales initially will be made to dealers and
other selling agents at prices which represent a concession or agency
commission of 3.5% of the Public Offering Price, and, for secondary
market sales, 3.5% of the Public Offering Price (or 65% of the then
current maximum sales charge on _________ 1, 199_ and thereafter).
Effective on each _________, 1, commencing _________ 1, 199_, such sales
charge will be reduced by 1/2 of 1% to a minimum sales charge of 3.0%.
However, resales of Units of the 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 the Trust available to their
customers on an agency basis. A portion of the sales charge paid by
these customers is retained by or remitted to the banks in the amounts
indicated above. Under the Glass-Steagall Act, banks are prohibited from
underwriting Trust Units; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have not
indicated that these particular agency transactions are not permitted
under such Act. In Texas and in certain other states, any banks making
Units available must be registered as broker/dealers under state law.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission equal
to 5.0% of the Public Offering Price of the Units (equivalent to 5.076%
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
"Underwriting" for information regarding the receipt of the excess gross
sales commissions by the Sponsor from the Underwriter and additional
concessions available to the Underwriter, 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 Securities to the Trust (which is
based on the Evaluator's determination of the aggregate offering price
of the underlying Securities of such Trust on the Initial Date of
Deposit as well as subsequent deposits) and the cost of such Securities
to the Sponsor. See Note (2) of "Schedule of Investments."
In maintaining a market for the Units, the Sponsor or Underwriter 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 5.0% subject to
reduction beginning _________ 1, 199_) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor or Underwriter.
Page 22
Will There be a Secondary Market?
After the initial offering period, although not obligated to do so, the
Sponsor intends to, and the Underwriter may, maintain a market for the
Units and continuously offer to purchase Units at prices, subject to
change at any time, based upon the aggregate bid side evaluation of the
Convertible Bonds and the aggregate underlying value of the Equity
Securities in the Trust plus or minus cash, if any, in the Income and
Capital Accounts of the Trust. All expenses incurred in maintaining a
secondary market, other than the fees of the Evaluator and the costs of
the Trustee in transferring and recording the ownership of Units, will
be borne by the Sponsor. If the supply of Units exceeds demand, or for
some other business reason, the Sponsor or Underwriter may discontinue
purchases of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE SPONSOR OR UNDERWRITER AS TO CURRENT
MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
Units subject to a deferred sales charge which are sold or tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of sale or redemption.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances, the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Record ownership
may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
Page 23
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the Securities in the Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See
"Summary of Essential Information." Persons who purchase Units will
commence receiving distributions only after such person becomes a record
owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker/dealer. The pro rata share
of cash in the Capital Account of the Trust will be computed as of the
fifteenth day of each month. Proceeds received on the sale of any
Securities in the 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 $0.01 per Unit.
The Trustee is not required to pay interest on funds held in the Capital
Account of the Trust (but may itself earn interest thereon and therefore
benefit from the use of such funds). Notwithstanding, distributions of
funds in the Capital Account, if any, will be made 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, Securities
may be sold to meet such shortfall. Distributions of amounts necessary
to pay the deferred portion of the sales charge will be made to an
account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
the Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
will, upon surrender of his Units for redemption, receive: (i) the pro
rata share of the amounts realized upon the disposition of Securities,
unless he elects an In-Kind Distribution as described under "Other
Information-How May the Indenture be Amended or Terminated?" and (ii) a
pro rata share of any other assets of the Trust, less expenses of the
Trust.
The Trustee will credit to the Income Account of the Trust any income or
dividends received on the Securities therein, including that part of the
proceeds of any disposition of Convertible Bonds which represents
accrued interest. All other receipts (e.g. return of capital, etc.) are
credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Equity
Securities sold during the year and the Securities held at the end of
such year by the Trust; (3) the redemption price per Unit based upon a
computation thereof on the 31st day of December of such year (or the
last business day prior thereto); and (4) amounts of income and capital
distributed during such year.
Page 24
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tendering to
the Trustee, at its unit investment trust office in the City of New
York, the certificates representing the Units to be redeemed, or in the
case of uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee (if such day is a
day in which the New York Stock Exchange is open for trading), except
that as regards Units received after 4:00 p.m. Eastern time (or as of
any earlier closing time on a day on which the New York Stock Exchange
is scheduled in advance to close at such earlier time), the date of
tender is the next day on which the New York Stock Exchange is open for
trading and such Units will be deemed to have been tendered to the
Trustee on such day for redemption at the redemption price computed on
that day. Units so redeemed shall be cancelled. Units tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of remaining
deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more for redemption may request
by written notice submitted at the time of tender from the Trustee, in
lieu of a cash redemption, a distribution of shares of Equity Securities
in an amount and value of Equity Securities per Unit equal to the
Redemption Price Per Unit as determined as of the evaluation next
following tender. Unit holders electing an In-Kind Distribution will
receive a cash payment representing their proportionate amount of the
Convertible Bonds. To the extent possible, In-Kind Distributions shall
be made by the Trustee through the distribution of each of the Equity
Securities in book-entry form to the account of the Unit holder's bank
or broker/dealer at the Depository Trust Company. An In-Kind
Distribution will be reduced by customary transfer and registration
charges. The tendering Unit holder will receive his pro rata number of
whole shares of each of the Equity Securities comprising the portfolio
and cash from the Capital Account equal to the fractional shares to
which the tendering Unit holder is entitled. The Trustee may adjust the
number of shares of any issue of Equity Securities included in a Unit
holder's In-Kind Distribution to facilitate the distribution of whole
shares, such adjustment to be made on the basis of the value of Equity
Securities on the date of tender. If funds in the Capital Account are
insufficient to cover the required cash distribution to the tendering
Unit holder, the Trustee may sell Equity Securities in the manner
described above.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. For further information regarding this withholding, see
"Rights of Unit Holders-How are Income and Capital Distributed?" In the
event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of the Trust.
The Trustee is empowered to sell Securities of the Trust in order to
make funds available for redemption. To the extent that Securities are
sold, the size and diversity of the Trust will be reduced. Such sales
may be required at a time when 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 bid side evaluation of the Convertible Bonds and the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of the listed Equity Securities
and either the ask prices (during the initial offering period) or the
bid prices (subsequent to the initial offering period) of the over-the-
counter traded Securities) plus or minus cash, if any, in the Income and
Page 25
Capital Accounts of the Trust. The Redemption Price per Unit is the pro
rata share of each Unit determined by the Trustee by adding: (1) the
cash on hand in the Trust other than cash deposited in the Trust to
purchase Securities not applied to the purchase of such Securities; (2)
the aggregate value of the Convertible Bonds based on the bid prices of
the Convertible Bonds and the aggregate value of the Equity Securities
held in the Trust, as determined by the Evaluator on the basis of the
aggregate underlying value of the Equity Securities in the Trust next
computed; and (3) interest accrued on the Convertible Bonds and
dividends receivable on the Equity Securities trading ex-dividend as of
the date of computation; and deducting therefrom: (1) amounts
representing any applicable taxes or governmental charges payable out of
the Trust; (2) any amounts owing to the Trustee for its advances; (3) an
amount representing estimated accrued expenses of the Trust, including
but not limited to fees and expenses of the Trustee (including legal and
auditing fees), the Evaluator and supervisory fees, if any; (4) cash
held for distribution to Unit holders of record of the Trust as of the
business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results of
such computation by the number of Units of the Trust outstanding as of
the date thereof. The 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 Convertible Bonds will be determined (1) on
the basis of current bid prices of the Convertible Bonds obtained from
dealers or brokers who customarily deal in convertible securities
comparable to those held by the Trust, (2) on the basis of bid prices
for convertible securities comparable to any convertible securities for
which bid prices are not available, (3) by determining the value of the
convertible securities by appraisal, or (4) by any combination of the
above.
The aggregate value of the Equity Securities 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 at 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 difference between the bid and offering prices of the Convertible
Bonds may be expected to average 1-2% of the principal amount or stated
value. Therefore, the price at which Units may be redeemed could be less
than the price paid by the Unit holder.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
Page 26
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 Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of a 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 principal, interest or dividends or there exists any
legal question or impediment affecting such Equity Security, that the
issuer of the Security has breached a covenant which would affect the
payments of principal, interest or dividends, the credit standing of the
issuer or otherwise impair the sound investment character of the
Security, that the issuer has defaulted on the payment on any other of
its outstanding obligations, or that the price of the 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 Securities would be
detrimental to the Trust. Except as stated under "Portfolio-What are
Some Additional Considerations for Investors?" for Failed Obligations,
the acquisition by the Trust of any securities or other property other
than the Securities is prohibited. The Sponsor shall instruct the
Trustee to reject any offer made by an issuer of any of the Convertible
Bonds to issue new obligations in exchange and substitution for any
Convertible Bonds pursuant to a refunding or refinancing plan, except
that the Sponsor may instruct the Trustee to accept such an offer or to
take any other action with respect thereto as the Sponsor may deem
proper if the issuer is in default with respect to such Convertible
Bonds or in the written opinion of the Sponsor the issuer will probably
default in respect to such Convertible Bonds in the foreseeable future.
Any obligations so received in exchange or substitution will be held by
the Trustee subject to the terms and conditions in the Indenture to the
same extent as Convertible Bonds originally deposited thereunder. Within
five days after the deposit of obligations in exchange or substitution
for underlying Convertible Bonds, the Trustee is required to give notice
thereof to each Unit holder of the affected Trust, identifying the
Convertible Bonds eliminated and the Convertible Bonds substituted
therefor.
Pursuant to the Indenture and with limited exceptions, the Trustee may
sell any securities or other property acquired in exchange for Equity
Securities such as those acquired in connection with a merger or other
transaction. If offered such new or exchanged securities or property,
the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the Trust, they may
be accepted for deposit in the Trust and either sold by the Trustee or
held in the Trust pursuant to the direction of the Sponsor (who may rely
on the advice of the Portfolio Supervisor). Proceeds from the sale of
Equity Securities (or any securities or other property received by the
Trust in exchange for Equity Securities) by the Trustee are credited to
the Capital Account of the Trust for distribution to Unit holders or to
meet redemptions. The Trustee may from time to time retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for the Trust with respect to selling Equity Securities from the
Trust. In acting in such capacity the Sponsor or its affiliate will be
held subject to the restrictions under the Investment Company Act of
1940, as amended.
Pursuant to the Indenture, the Trustee is not permitted to exercise the
conversion option on any of the Convertible Bonds in the Trust and
continue to hold securities received upon such exercise in the Trust. If
any of the Convertible Bonds are called for redemption, the Sponsor in
consultation with the Portfolio Supervisor will instruct the Trustee to
either (i) tender the Convertible Bonds for redemption; (ii) sell the
Convertible Bonds prior to redemption; or (iii) exercise the conversion
option on the Convertible Bonds and exchange the Convertible Bonds at
the specified price for a specified number of shares of common stock of
the issuer; and then sell the shares of common stock received upon the
exercise of such option.
The Trustee may also sell Securities designated by the Sponsor, or if
not so directed, in its own discretion, for the purpose of redeeming
Units of the Trust tendered for redemption and the payment of expenses.
Page 27
The Sponsor, in designating 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 Securities. To the extent this is not
practicable, the composition and diversity of the Securities may be
altered. In order to obtain the best price for the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
The Ohio Company is a full-service investment banking and brokerage firm
headquartered in Columbus, Ohio with over 50 branch offices spread
throughout Ohio, Florida, Indiana, Michigan and West Virginia. The Ohio
Company provides retail brokerage services with over 200 investment
executives and institutional service with eight investment executives. A
wide array of financial services are provided including: equity research
(following approximately 125 companies), Nasdaq and NYSE equity trading
(making markets in over 80 stocks and providing the services of a
dedicated NYSE floor broker), corporate and public finance, taxable and
municipal bond trading desks and asset management (approximately $2.0
billion under active management.)
Founded in 1925, The Ohio Company has a current capital position of
nearly $35 million, ranking near the top of regional securities firms.
The Ohio Company has built and maintained a reputation for over 70 years
of providing high quality investment banking and brokerage service to
institutions, corporations, municipalities and individuals.
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The FT Series (formerly known as The First Trust Special
Situations Trust Series), The First Trust Insured Corporate Trust, The
First Trust of Insured Municipal Bonds and The First Trust GNMA. First
Trust introduced the first insured unit investment trust in 1974 and to
date more than $9 billion in First Trust unit investment trusts have
been deposited. The Sponsor's employees include a team of professionals
with many years of experience in the unit investment trust industry. The
Sponsor is a member of the National Association of Securities Dealers,
Inc. and Securities Investor Protection Corporation and has its
principal offices at 1001 Warrenville Road, Lisle, Illinois 60532;
telephone number (630) 241-4141. As of December 31, 1996, the total
partners' capital of Nike Securities L.P. was $9,005,203 (audited).
(This paragraph relates only to the Sponsor and not to the Trust or to
any series thereof. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor
upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trust may
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 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
Page 28
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the 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).
Page 29
The Indenture provides that the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
Securities owned by the Trust as shown by any evaluation, is less than
the lower of $2,000,000 or 20% of the total value of Securities
deposited in such Trust during the initial offering period, or in the
event that Units of the Trust not yet sold aggregating more than 60% of
the Units of the Trust are tendered for redemption by a broker/dealer,
including the Sponsor. If the Trust is liquidated because of the
redemption of unsold Units of the Trust by a broker/dealer, the Sponsor
will refund to each purchaser of Units of the Trust the entire sales
charge and the transaction fees paid by such purchaser. In the event of
termination, written notice thereof will be sent by the Trustee to all
Unit holders of the Trust. Within a reasonable period after termination,
the Trustee will follow the procedures set forth under "Rights of Unit
Holders-How are Income and Capital Distributed?"
Commencing during the period beginning nine business days prior to, and
no later than, the Mandatory Termination Date, Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the
Securities. Written notice of any termination of the Trust specifying
the time or times at which Unit holders may surrender their certificates
for cancellation shall be given by the Trustee to each Unit holder at
his address appearing on the registration books of the Trust maintained
by the Trustee. At least 60 days prior to the Maturity Date of the
Trust, the Trustee will provide written notice thereof to all Unit
holders and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Equity Securities (reduced by
customary transfer and registration charges), if such Unit holder owns
at least 2,500 Units of the Trust, rather than to receive payment in
cash for such Unit holder's pro rata share of the amounts realized upon
the disposition by the Trustee of Securities. Unit holders electing an
In-Kind Distribution will receive payment in cash representing their
proportional amount of the Convertible Bonds. To be effective, the
election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the Trustee
at least ten business days prior to the Mandatory Termination Date of
the Trust. Unit holders not electing a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after the Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances
or indemnities provided by the Trust Agreement, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Securities in the Trust upon
termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. In addition, to
the extent that Securities are sold prior to the Mandatory Termination
Date, Unit holders will not benefit from any appreciation they would
have received by the Securities not been sold at such time. The Trustee
will then distribute to each Unit holder his pro rata share of the
balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
Page 30
UNDERWRITING
The Underwriter named below has purchased Units in the following amount:
<TABLE>
<CAPTION>
Number
Name Address of Units
____ _______ ________
<S> <C> <C>
The Ohio Company 155 East Broad Street
Columbus, OH 43215
=======
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became the
owner of the Units of the Trust and entitled to the benefits thereof, as
well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the Units
of the Trust will be made at the Public Offering Price described in the
Prospectus. Units may also be sold to or through dealers and others
during the initial offering period and in the secondary market at prices
representing a concession or agency commission as described in "Public
Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the Trust
as they become available. The Sponsor will receive from the Underwriter
the difference between the gross sales commission and the Underwriter
concession listed below. The Underwriter concession will be calculated
as a percentage of the Public Offering Price per Unit according to the
following schedule:
Underwriting Concession
____________ __________
Less than $15,000,000 3.60%
$15,000,000 but less than $20,000,000 3.75%
$20,000,000 but less than $25,000,000 3.90%
$25,000,000 or more 4.00%
From time to time the Sponsor may implement programs under which the
Underwriter and dealers of the Trust may receive nominal awards from the
Sponsor for each of their registered representatives who have sold a
minimum number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under which
the sales force of the Underwriter or dealers may be eligible to win
other nominal awards for certain sales efforts, or under which the
Sponsor will reallow to any such Underwriter or dealer that sponsors
sales contests or recognition programs conforming to criteria
established by the Sponsor, or participates in sales programs sponsored
by Sponsor, an amount not exceeding the total applicable sales charges
on the sales generated by such person at the public offering price
during such programs. Also, the Sponsor in its discretion may from time
to time pursuant to objective criteria established by the Sponsor pay
fees to the Underwriter or qualifying dealers for certain services or
activities which are primarily intended to result in sales of Units of
the Trust. Such payments are made by the Sponsor out of its own assets,
and not out of the assets of the Trust. These programs will not change
the price Unit holders pay for their Units or the amount that the Trust
will receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as the common stocks
comprising the Dow Jones Industrial Average, corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trust. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of the Trust are
described more fully elsewhere in this Prospectus.
Information on percentage changes in the dollar value of Units, on the
basis of changes in Unit price may be included from time to time in
advertisements, sales literature, reports and other information
Page 31
furnished to current or prospective Unit holders. Total return figures
are not averaged, and may not reflect deduction of the sales charge,
which would decrease the return. Average annualized return figures
reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance may not be indicative of future results. The Trust's
portfolio is not managed. Unit price and return fluctuate with the value
of the common stocks in the Trust's portfolio, so there may be a gain or
loss when Units are sold.
Trust performance may be compared to performance on a total return basis
of the Dow Jones Industrial Average, the S&P 500 Composite Price Stock
Index, or performance data from Lipper Analytical Services, Inc. and
Morningstar Publications, Inc. or from publications such as Money, The
New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
Page 32
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 237
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 237, comprised of Strategic Income and Growth Trust, Series 1, at
the opening of business on , 1998. This statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net assets
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on
, 1998. An audit also includes assessing the accounting
principles used and significant estimates made by the Sponsor, as well
as evaluating the overall presentation of the statement of net assets.
We believe that our audit of the statement of net assets provides a
reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 237, comprised of Strategic
Income and Growth Trust, Series 1 at the opening of business on
, 1998 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1998
Page 33
Statement of Net Assets
STRATEGIC INCOME AND GROWTH TRUST, SERIES 1
FT 237
At the Opening of Business on the Initial Date of Deposit
, 1998
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase contracts (1) (2) $
Accrued interest on underlying convertible bonds (2) (3)
Organizational and offering costs (4)
________
Less distributions payable (3) $
Less accrued organizational and offering costs (4) ( )
Less liability for deferred sales charge (5) ( )
________
Net assets $
========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (6) $
Less sales charge (6) ( )
________
Net assets $
========
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $ issued by
The Chase Manhattan Bank has been deposited with the Trustee as
collateral, which is sufficient to cover the monies necessary for the
purchase of the Securities pursuant to contracts for the purchase of
such Securities.
(3) The Trustee will advance to the Trust the amount of net interest
accrued on the convertible bonds to , 1998, the First Settlement
Date, for distribution to the Sponsor as the Unit holder of record.
(4) The Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed five years from the Initial Date of Deposit. The estimated
organizational and offering costs are based on Units of the
Trust expected to be issued. To the extent the number of Units issued is
larger or smaller, the estimate will vary.
(5) Represents the amount of mandatory distributions from the Trust
($.350 per Unit), payable to the Sponsor in seven equal monthly
installments beginning on ________, 199_, and on the last business day
of each month thereafter through ________, 199_. If Units are redeemed
prior to ________, 199_, the remaining amount of the deferred sales
charge applicable to such Units will be payable at the time of redemption.
(6) The aggregate cost to investors includes a sales charge computed at
the rate of 5.0% of the Public Offering Price (equivalent to 5.076% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge for quantity purchases.
</FN>
</TABLE>
Page 34
Schedule of Investments
STRATEGIC INCOME AND GROWTH TRUST, SERIES 1
FT 237
At the Opening of Business on the
Initial Date of Deposit- , 1998
<TABLE>
<CAPTION>
Convertible Bonds
_________________
Aggregate
Principal Cost of
Amount or Conversion Redemption Securities
Stated Value Name of Issuer and Title of Security (1) Rating (2) Provisions (3) Provisions to Trust (4)
____________ ________________________________________ __________ ______________ __________ ____________
<C> <S> <C> <C> <C> <C>
$ CNG Consolidated Natural Gas Company % $ $ $
HWP Hewlett-Packard Company
NSM National Semiconductor Corporation
Equity Securities
_________________
Approximate Market
Percentage Value per
of Aggregate Share of Cost of
Number Ticker Symbol and Offering Equity Securities
of Shares Name of Issuer of Equity Securities (1) Price (6) Securities to Trust (5)
_________ _______________________________________ __________ ___________ ___________
<C> <S> <C> <C> <C>
AGT American General Hospitality Corporation % $ $
AHP American Home Products Corporation %
AIT Ameritech Corporation %
AN Amoco Corporation %
BUD Anheuser-Busch Companies, Inc. %
ONE Banc One Corporation %
BT Bankers Trust New York Corporation %
BTI B.A.T. Industries plc (ADR) %
BP British Petroleum Company plc (ADR) %
BTY British Telecommunications plc (ADR) %
CMO Capstead Mortgage Corporation %
C Chrysler Corporation %
CIN Cinergy Corp. %
DUK Duke Energy Corporation %
DRE Duke Realty Investments, Inc. %
DD E.I. du Pont de Nemours and Company %
EMR Emerson Electric Company %
FLT Fleet Financial Group, Inc. %
GTE GTE Corporation %
HNZ H.J. Heinz Company %
NDE INMC Mortgage Holdings, Inc. %
JCP J.C. Penney Company, Inc. %
KIM Kimco Realty Corporation %
LU Lucent Technologies, Inc. %
MMC Marsh & McLennan Companies, Inc. %
MEL Mellon Bank Corporation %
MMM Minnesota Mining & Manufacturing Company %
MOB Mobil Corporation %
NCC National City Corporation %
NB NationsBank Corporation %
</TABLE>
Page 35
Schedule of Investments (cont.)
STRATEGIC INCOME AND GROWTH TRUST, SERIES 1
FT 237
At the Opening of Business on the
Initial Date of Deposit- , 1998
<TABLE>
<CAPTION>
Equity Securities
_________________
Approximate Market
Percentage Value per
of Aggregate Share of Cost of
Number Ticker Symbol and Offering Equity Securities
of Shares Name of Issuer of Equity Securities (1) Price (6) Securities to Trust (5)
_________ _______________________________________ ____________ ___________ ____________
<C> <S> <C> <C> <C>
NHP Nationwide Health Properties, Inc. % $ $
PNC PNC Bank Corp. %
MO Phillip Morris Companies Inc. %
RTN Raytheon Company %
RDW Royal Dutch Petroleum Company %
NZT Telecom Corporation of New Zealand (ADR) %
TXU Texas Utilities Company %
WR Western Resources, Inc. %
WY Weyerhaeuser Company %
______ ________
Total Investments 100% $
====== ========
____________
<FN>
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. The contracts to purchase
Securities were entered into by the Sponsor on , 1998.
(2) All ratings are by Standard & Poor's unless otherwise indicated (NR
indicates `No Rating"). All such ratings were obtained from an
information reporting service. See "Description of Bond Ratings."
(3) There is shown under this heading the number of shares of common
stock per $1,000 par value into which the Convertible Bonds are
convertible.
(4) There is shown under this heading the year in which each issue of
Convertible Bonds initially is redeemable and the redemption price for
that year or, if currently redeemable, the redemption price in effect on
the Initial Date of Deposit. Issues of Convertible Bonds are redeemable
at declining prices (but not below par value) in subsequent years.
"S.F." indicates a sinking fund is or may be, in the case of an optional
sinking fund, established with respect to an issue of Convertible Bonds.
Redemption pursuant to call provisions generally will, and redemption
pursuant to sinking fund provisions may, occur at times when the
redeemed Convertible Bonds have an offering side valuation which
represents a premium over par or for original issue discount Convertible
Bonds a premium over the accreted value. To the extent that the
Convertible Bonds were deposited in the Trust at a price higher than the
price at which they are redeemed, this will represent a loss of capital
when compared with the original Public Offering Price of the Units.
Conversely, to the extent that the Convertible Bonds were acquired at a
price lower than the redemption price, this will represent an increase
in capital when compared to the original Public Offering Price of the
Units. Distributions will generally be reduced by the amount of the
income which would otherwise have been paid with respect to redeemed
Convertible Bonds and there will be distributed to Unit holders the
principal amount and any premium received on such redemption (except to
the extent the proceeds of the redeemed Convertible Bonds are used to
pay for Unit redemptions).
(5) The cost of the Securities to the Trust represents the aggregate
offering side evaluation of the Convertible Bonds and the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last sale prices of the listed Securities and the ask
prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Securities on the Initial Date of
Deposit was $ . Cost and loss to Sponsor relating to the Securities
sold to the Trust were $ and $ , respectively.
(6) The portfolio may contain additional Securities each of which will
not exceed approximately __% of the Aggregate Offering Price. Although
it is not the Sponsor's intention, certain of the Securities listed
above may not be included in the final portfolio. Also, the percentages
of the Aggregate Offering Price for the Securities are approximate
amounts and may vary in the final portfolio.
</FN>
</TABLE>
Page 36
DESCRIPTION OF BOND RATINGS*
Standard & Poor's. A brief description of the applicable Standard &
Poor's rating symbols and their meanings follows:
A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a
specific debt obligation. This assessment may take into consideration
obligors such as guarantors, insurers, or lessees.
The bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or
suitability for a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in connection with any
rating and may, on occasion, rely on unaudited financial information.
The ratings may be changed, suspended or withdrawn as a result of
changes in, or unavailability of, such information, or for other
circumstances.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default-capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in accordance
with the terms of the obligation;
II. Nature of and provisions of the obligation;
III. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or other arrangements under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small
degree.
A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than bonds
in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for bonds in this category than for bonds
in higher rated categories.
Bonds rated `BB,' `B,' `CCC,' `CC' are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal.
`BB' indicates the least degree of speculation and `C,' the highest
degree of speculation. While such Bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB - Bonds rated BB have less near-term vulnerability to default than
other speculative grade debt. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or economic
conditions that could lead to inadequate capacity to meet timely
interest and principal payments.
B - Bonds rated B have greater vulnerability to default but presently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial or economic conditions would likely impair
capacity or willingness to pay interest and repay principal.
CCC - Bonds rated CCC have a current identifiable vulnerability to
default, and is dependent on favorable business, financial and economic
conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal.
CC - The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.
________________
* As published by the rating companies.
Page 37
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
D - Bonds are rated D when the issue is in payment default, or the
obligor has filed for bankruptcy. The D rating is used when interest or
principal payments are not made on the date due, even if the applicable
grace period has not expired, unless S&P believes that such payments
will be made during such grace period.
Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified by
the addition of a plus or minus sign to show relative standing within
the major rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of
the project being financed by the bonds being rated and indicates that
payment of debt service requirements is largely or entirely dependent
upon the successful and timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the
project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion. The investor should exercise his/her
own judgment with respect to such likelihood and risk.
Credit Watch: Credit Watch highlights potential changes in ratings of
bonds and other fixed income securities. It focuses on events and trends
which place companies and government units under special surveillance by
S&P's 180-member analytical staff. These may include mergers, voter
referendums, actions by regulatory authorities, or developments gleaned
from analytical reviews. Unless otherwise noted, a rating decision will
be made within 90 days. Issues appear on Credit Watch where an event,
situation, or deviation from trends occurred and needs to be evaluated
as to its impact on credit ratings. A listing, however, does not mean a
rating change is inevitable. Since S&P continuously monitors all of its
ratings, Credit Watch is not intended to include all issues under
review. Thus, rating changes will occur without issues appearing on
Credit Watch.
Moody's Investors Service, Inc. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:
Aaa - Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally
referred to as "gilt edge." Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues. Their safety is so absolute that with the occasional
exception of oversupply in a few specific instances, characteristically,
their market value is affected solely by money market fluctuations.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long term risks
appear somewhat larger than in Aaa securities. Their market value is
virtually immune to all but money market influences, with the occasional
exception of oversupply in a few specific instances.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future. The market value of A-rated bonds may be
influenced to some degree by economic performance during a sustained
period of depressed business conditions, but, during periods of
normalcy, A-rated bonds frequently move in parallel with Aaa and Aa
obligations, with the occasional exception of oversupply in a few
specific instances.
A 1 and Baa 1 - Bonds which are rated A 1 and Baa 1 offer the maximum in
security within their quality group, can be bought for possible
upgrading in quality, and additionally, afford the investor an
opportunity to gauge more precisely the relative attractiveness of
offerings in the market place.
Baa - Bonds which are rated Baa are considered as medium grade
obligations; i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have speculative
Page 38
characteristics as well. The market value of Baa-rated bonds is more
sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa
market valuations will move in parallel with Aaa, Aa, and A obligations
during periods of economic normalcy, except in instances of oversupply.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at
the high end of its category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
Con.(- - -) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated
conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation
experience, (c) rentals which begin when facilities are completed, or
(d) payments to which some other limiting condition attaches.
Parenthetical rating denotes probable credit stature upon completion of
construction or elimination of basis of condition.
Page 39
CONTENTS:
Summary of Essential Information 4
Strategic Income and Growth Trust, Series 1
FT 237:
What is the FT Series? 6
What are the Expenses and Charges? 7
How is Accrued Interest Treated? 8
What is the Federal Tax Status of Unit Holders? 9
Why are Investments in the Trust Eligible for
Retirement Plans? 14
Portfolio:
What are Convertible Bonds? 15
What are Equity Securities? 15
Risk Factors 15
What are the Securities Selected for the
Strategic Income and Growth Trust, Series 1? 18
What are Some Additional Considerations
for Investors? 18
Public Offering:
How is the Public Offering Price Determined? 19
How are Units Distributed? 22
What are the Sponsor's and Underwriter's Profits? 22
Will There be a Secondary Market? 23
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 23
How are Income and Capital Distributed? 24
What Reports will Unit Holders Receive? 24
How May Units be Redeemed? 25
How May Units be Purchased by the Sponsor? 26
How May Securities be Removed
from the Trust? 27
Information as to Underwriter, Sponsor, Trustee and
Evaluator:
Who is the Underwriter? 28
Who is the Sponsor? 28
Who is the Trustee? 28
Limitations on Liabilities of Sponsor and Trustee 29
Who is the Evaluator? 29
Other Information:
How May the Indenture be Amended or Terminated? 29
Legal Opinions 30
Experts 30
Underwriting 31
Report of Independent Auditors 33
Statement of Net Assets 34
Notes to Statement of Net Assets 34
Schedule of Investments 35
Description of Bond Ratings 37
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 Trust
has filed with the Securities and Exchange Commission, Washington, D.C.
under the Securities Act of 1933 and the Investment Company Act of 1940,
and to which reference is hereby made.
The Ohio Company
STRATEGIC INCOME AND GROWTH TRUST
SERIES 1
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215
1-800-255-1825
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
, 1998
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 40
MEMORANDUM
Re: FT 237
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between FT
230, which is the current fund, and FT 237, the filing of which
this memorandum accompanies, is the change in the series number.
The list of securities comprising the Fund, the evaluation,
record and distribution dates and other changes pertaining
specifically to the new series, such as size and number of Units
in the Fund and the statement of condition of the new Fund, will
be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the FT
230 Prospectus relate to the series number and size and the date
and various items of information which will be derived from and
apply specifically to the securities deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 237 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 January 13, 1998.
FT 237
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities January 13, 1998
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of Nike
Securities Corporation,
the General Partner
of Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for FT 237 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
