Registration No. 333-59955
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
FT 276
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title 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 public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on August 18, 1998 at 2:00 p.m. pursuant to Rule
487.
________________________________
FT 276
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The FT Series
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The FT Series
securities
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The FT Series
11. Types of securities comprising The FT Series
units Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The FT
Series
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The FT
Series; Public
Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The FT Series
affiliated persons
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The FT Series; Rights
of Unit Holders;
17. Withdrawal or redemption The FT Series; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The 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 employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The 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 in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The FT Series
50. Trustee's lien The FT Series
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's securities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The FT Series;
agreement with respect to Rights of Unit Holders
selection or elimination of
underlying securities
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The FT Series;
or elimination of underlying Rights of Unit Holders
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.
56.
57. Certain information regarding
periodic payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors
Statement of Net
Assets
* Inapplicable, answer negative or not required.
Semiconductor Growth Trust Series
The Trust. FT 276 (the "Trust") is a unit investment trust consisting of
a diversified portfolio of common stocks issued by companies in the
semiconductor industry.
The objective of the Trust is to provide for potential capital
appreciation by investing the Trust's portfolio in common stocks (the
"Equity Securities") of companies in the semiconductor industry. 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 Equity Securities deposited in such 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. See "Portfolio."
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Equity Securities in the Trust. Such
deposits of additional Equity Securities will be done in such a manner
that the original proportionate relationship amongst the individual
issues of the Equity Securities in the Trust shall be maintained. Any
deposit by the Sponsor of additional Equity Securities, or the purchase
of additional Equity Securities pursuant to a cash deposit, will
duplicate, as nearly as is practicable, the original proportionate
relationship established on the Initial Date of Deposit, and not the
actual proportionate relationship on the subsequent date of deposit,
since the two may differ. Any such difference may be due to the sale,
redemption or liquidation of any Equity Securities deposited in the
Trust on the Initial, or any subsequent, Date of Deposit. See "What is
the FT Series?" and "Rights of Unit Holders-How May Equity Securities be
Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
during the initial offering period is equal to the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the
Trust, plus an initial sales charge equal to the difference between the
maximum sales charge of 4.5% of the Public Offering Price and the
maximum remaining deferred sales charge, initially $.35 per Unit,
divided by the number of Units of the Trust outstanding. Commencing on
March 19, 1999, and on the twentieth day of each month thereafter (or if
such date is not a business day, on the preceding business day) through
July 20, 1999, a deferred sales charge of $.07 will be assessed per Unit
per month. Units purchased subsequent to the initial deferred sales
charge payment but still during the initial offering period will be
subject to the initial sales charge and the remaining deferred sales
charge payments not yet collected. The deferred sales charge will be
paid from funds in the Income and/or Capital Accounts, if sufficient, or
from the periodic sale of Equity Securities. The total maximum sales
charge assessed to Unit holders on a per Unit basis
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.
First Trust (registered trademark)
1-800-621-9533
The date of this Prospectus is August 18, 1998
Page 1
will be 4.5% of the Public Offering Price (equivalent to 4.545% of the
net amount invested, exclusive of the deferred sales charge). A pro rata
share of accumulated dividends, if any, in the Income Account of the
Trust is included in the Public Offering Price. In addition, a portion
of the Public Offering Price on Units purchased prior to the earlier of
six months after the Initial Date of Deposit or the end of the initial
offering period also consists of Equity Securities in an amount
sufficient to pay for all or a portion of the costs incurred in
establishing the Trust. The organizational and offering costs will be
deducted from the assets of the Trust as of the earlier of six months
after the Initial Date of Deposit or the end of the initial offering
period. 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 4.5% of the Public Offering Price (equivalent to
4.712% of the net amount invested), which will be reduced by 1/2 of 1%
on each August 31, commencing August 31, 1999 to a minimum sales charge
of 3.0%. The minimum amount which an investor may purchase of the Trust
is $1,000 ($500 for Individual Retirement Accounts or other retirement
plans). The sales charge of the Trust is reduced on a graduated scale
for sales involving at least $50,000. See "Public Offering-How is the
Public Offering Price Determined?"
UNITS OF THE TRUSTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trust, net of expenses of such Trust,
will be paid on the Distribution Date to Unit holders of record on the
Record Date as set forth in the "Summary of Essential Information" for
the Trust. Distributions of funds in the Capital Account, if any, will
be made at least annually in December of each year. Any distribution of
income and/or capital will be net of the expenses of the respective
Trust. See "What is the Federal Tax Status of Unit Holders?"
Additionally, upon termination of the 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 maintain a market
for Units of the Trust and offer to repurchase such Units at prices
which are based on the aggregate underlying value of Equity Securities
in such 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 such Trust. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the Capital and
Income Accounts of the Trust. If a secondary market is not maintained, a
Unit holder may redeem Units through redemption at prices based upon the
aggregate underlying value of the Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and either the ask prices (during the initial offering
period) or the bid prices (subsequent to the initial offering period) of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust.
A Unit holder tendering 1,000 Units or more of the Trust 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. See "Rights of Unit Holders-How May Units be
Redeemed?" 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 will 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 with such notice a form
to enable Unit holders to elect an In-Kind Distribution if such Unit
holder owns at least 1,000 Units of the Trust, rather than to receive
payment in cash for such Unit holder's pro rata share of the amounts
realized upon the disposition by the Trustee of Equity Securities. To be
Page 2
effective, the election form, together with surrendered certificates and
other documentation required by the Trustee, must be returned to the
Trustee at least ten business days prior to the Mandatory Termination
Date. Unit holders not electing a distribution of shares of Equity
Securities will receive a cash distribution within a reasonable time
after the Trust is terminated. See "Rights of Unit Holders-How are
Income and Capital Distributed?" and "Other Information-How May the
Indenture be Amended or Terminated?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Equity Securities or the general condition of the
stock market, changes in interest rates and economic recession.
Volatility in the market price of the Equity Securities in the Trust
also changes the value of the Units of the Trust. Unit holders tendering
Units for redemption during periods of market volatility may receive
redemption proceeds which are more or less than they paid for the Units.
The Trust's portfolio is not managed and Equity Securities will not be
sold by the Trust regardless of market fluctuations, although certain
Equity Securities may be sold under certain limited circumstances. For
further information concerning these risk factors as well as a
discussion of additional risks specific to the Trust, see "What are the
Equity Securities?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-August 18, 1998
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
<S> <C>
General Information
Initial Number of Units (1) 15,170
Fractional Undivided Interest in the Trust per Unit (1) 1/15,170
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 150,181
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.900
Maximum Sales Charge of 4.5% of the Public Offering Price per Unit
(4.545% of the net amount invested, exclusive of the deferred sales charge) (3) $ .450
Less Deferred Sales Charge per Unit $ (.350)
Public Offering Price per Unit (3) $ 10.000
Sponsor's Initial Repurchase Price per Unit (4) $ 9.550
Redemption Price per Unit (based on aggregate underlying value of Equity Securities) (4) $ 9.550
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number 30264R 512
Security Code 55872
First Settlement Date August 21, 1998
Mandatory Termination Date August 15, 2003
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 $.0096 per Unit outstanding.
Evaluator's Annual Fee $.0030 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 $.0035 per Unit outstanding annually payable to an
affiliate of the Sponsor.
Estimated Organizational and Offering Costs (6) $.0225 per Unit.
Income Distribution Record Date Fifteenth day of each June and December commencing December 15, 1998.
Income Distribution Date (7) Last day of each June and December commencing December 31, 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.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering" for
additional information regarding these charges. On the Initial Date of
Deposit there will be no accumulated dividends in the Income Account.
Anyone ordering Units after such date will pay a pro rata share of any
accumulated dividends in such Income Account. The Public Offering Price
as shown reflects the value of the Equity Securities at the opening of
business on the Initial Date of Deposit and establishes the original
proportionate relationship amongst the individual securities. No sales
to investors will be executed at this price. Additional Equity
Securities will be deposited during the day of the Initial Date of
Deposit which will be valued as of 4:00 p.m. Eastern time and sold to
investors at a Public Offering Price per Unit based on this valuation.
(4) The Sponsor's Initial Repurchase Price per Unit and the Redemption
Price per Unit set forth above and until the earlier of six months after
the Initial Date of Deposit or the end of the initial offering period
include estimated organizational and offering costs per Unit. After such
date, the Sponsor's Repurchase Price and Redemption Price per Unit will
not include such estimated organizational and offering costs. See
"Rights of Unit Holders-How May Units be Redeemed?"
(5) The Supervisory Fee is payable to an affiliate of the Sponsor. In
addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0028 per
Unit.
(6) Investors will bear all or a portion of the costs incurred in
organizing 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 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. Estimated organizational and offering costs are included
in the Public Offering Price per Unit and will be deducted from the
assets of the Trust at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period. See "Public
Offering" 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 $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
</FN>
</TABLE>
Page 4
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 five 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) 1.00%(a) $ .100
Deferred sales charge
(as a percentage of public offering price) 3.50%(b) .350
________ ________
4.50% $ .450
======== ========
Organizational and Offering Costs
Estimated Organizational and Offering Costs
(as a percentage of public offering price) .225%(c) $.0225
======== ========
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Trustee's fee .098% $.0096
Portfolio supervision, bookkeeping, administrative and evaluation fees .095% .0093
Other operating expenses .055% .0054
________ ________
Total .248% $.0243
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years
______ _______ _______
<S> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the Semiconductor Growth Trust Series has an estimated
operating expense ratio of .248% and a 5% annual return on the
investment throughout the periods $ 50 $ 55 $ 60
______________
<FN>
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 4.5% and the maximum remaining deferred
sales charge (initially $.35 per Unit) and would exceed 1.0% if the
Public Offering Price exceeds $10.00 per Unit.
(b) The actual fee is $.07 per month per Unit, irrespective of purchase
or redemption price deducted monthly commencing March 19, 1999 through
July 20, 1999. If a Unit holder sells or redeems Units before all of
these deductions have been made, the balance of the deferred sales
charge payments remaining will be deducted from the sales or redemption
proceeds. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 3.5%. Units purchased subsequent to the initial
deferred sales charge payment will also be subject to the remaining
deferred sales charge payments not yet collected.
(c) Investors will bear all or a portion of the costs incurred in
organizing 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 states, the
initial audit of the Trust portfolio, legal fees and the initial fees
and expenses of the Trustee) as is common for mutual funds. Estimated
organizational and offering costs are included in the Public Offering
Price per Unit and will be deducted from the assets of the Trust at the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period.
</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.
Page 5
SEMICONDUCTOR GROWTH TRUST SERIES
FT 276
What is the FT Series?
FT 276 is one of a series of investment companies created by the Sponsor
under the name of the FT Series, all of which are generally similar, but
each of which is separate and is designated by a different series
number. The FT Series was previously known as The First Trust Special
Situations Trust Series. The Trust is a unit investment trust created
under the laws of the State of New York pursuant to the Trust Agreement
(the "Indenture"), dated the Initial Date of Deposit, with Nike
Securities L.P. as Sponsor, The Chase Manhattan Bank as Trustee, and
First Trust Advisors L.P. as Portfolio Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks of
companies involved in semiconductors, semiconductor design and
semiconductor equipment (the "Equity Securities"), together with an
irrevocable letter or letters of credit of a financial institution in an
amount at least equal to the purchase price of the Equity Securities. In
exchange for the deposit of securities or contracts to purchase
securities in the Trust, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of the Trust.
The objective of the Semiconductor Growth Trust Series (the
"Semiconductor Growth Trust") is to provide investors with the potential
for above-average capital appreciation through an investment in a
diversified portfolio of common stocks of leading companies in the
semiconductor industry. The companies selected for the portfolio are
chosen by identifying stocks that meet the investment objectives of the
Trust and, in the Sponsor's opinion, trade at attractive valuations and
are likely to exceed market expectations of future cash flows. The
semiconductor industry has played an instrumental role in the computer
revolution, as well as being a critical element of the modern economy.
Given the earnings outlook and current valuations relative to the S&P
500, the Sponsor believes that the semiconductor industry represents
value in today's marketplace and is positioned for above-average growth.
The positive outlook for these companies is supported by several
factors. First, semiconductors account for nearly 20% of the materials
cost of electronic equipment, up from 10% in 1985. In the Sponsor's
opinion, this figure is expected to increase in the future. Second, the
proliferation of the Internet and wireless communications continues to
increase the demand for smaller, more powerful chips. Finally, the chip
industry has become the largest contributor to the gross domestic
product (GDP) among all manufacturing sectors.
The companies engaged in the semiconductor industry are subject to
fierce competition, pricing constraints, high research and development
costs, and the risk of rapid obsolescence of products and services. The
Sponsor believes this above-average level of risk and volatility is more
than offset by the potential for above-average returns. See "Schedule of
Investments" and "What are the Equity Securities?-Risk Factors" for the
Semiconductor Growth Trust. There is, however, no assurance that the
objective of the Semiconductor Growth Trust will be achieved.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
amounts of Equity Securities in the Trust's portfolio, as set forth
under "Schedule of Investments" for the Trust. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may create additional Units in the Trust by depositing
additional Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Equity Securities in the Trust.
Units may be continuously offered for sale to the public by means of
this Prospectus, resulting in a potential increase in the outstanding
number of Units of the Trust. Any deposit by the Sponsor of additional
Equity Securities, or the purchase of additional Equity Securities
pursuant to a cash deposit, will duplicate, as nearly as is practicable,
the original proportionate relationship and not the actual proportionate
relationship on the subsequent date of deposit, since the two may
differ. Any such difference may be due to the sale, redemption or
liquidation of any of the Equity Securities deposited in the Trust on
the Initial, or any subsequent, Date of Deposit. See "Rights of Unit
Holders-How May Equity Securities be Removed from the Trust?" Since the
prices of the underlying Equity Securities will fluctuate daily, the
ratio, on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as a result
of the deposit of additional Equity Securities in the Trust. If the
Sponsor deposits cash, however, existing and new investors may
experience a dilution of their investment and a reduction in their
anticipated income because of fluctuations in the prices of the Equity
Page 6
Securities between the time of the cash deposit and the purchase of the
Equity Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Equity Securities as close to the evaluation time as possible. The
Trustee may, from time to time, retain and pay compensation to the
Sponsor (or an affiliate of the Sponsor) to act as agent for the Trust
with respect to acquiring Equity Securities for the Trust. In acting in
such capacity, the Sponsor or its affiliate will be subject to the
restrictions under the Investment Company Act of 1940, as amended.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Equity Securities deposited in the
Trust set forth under "Summary of Essential Information". To the extent
that Units of the Trust are redeemed, the aggregate value of the Equity
Securities in the Trust will be reduced and the undivided fractional
interest represented by each outstanding Unit of the Trust will
increase. However, if additional Units are issued by the Trust in
connection with the deposit of additional Equity Securities or cash by
the Sponsor, the aggregate value of the Equity Securities in the Trust
will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit of the Trust will
be decreased proportionately. See "Rights of Unit Holders-How May Units
be Redeemed?"
What are the Expenses and Charges?
With the exception of brokerage fees discussed above and bookkeeping and
other administrative services provided to the Trust, for which the
Sponsor will be reimbursed in amounts as set forth under "Summary of
Essential Information," the Sponsor will not receive any fees in
connection with its activities relating to the Trust.
First Trust Advisors L.P., an affiliate of the Sponsor, will receive an
annual supervisory fee, which is not to exceed the amount set forth
under "Summary of Essential Information," for providing portfolio
supervisory services for the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year except for the
year or years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding at the
end of such month. In providing such supervisory services, the Portfolio
Supervisor may purchase research services from a variety of sources
which may include dealers of the Trust.
Subsequent to the initial offering period, First Trust Advisors L.P., in
its capacity as the 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 set forth in the "Summary
of Essential Information." Such fee is based upon the largest aggregate
number of Units of the Trust outstanding during the calendar year,
except during the initial offering period, in which case the fee is
calculated based on the largest number of Units outstanding during the
period for which compensation is paid. For a discussion of the services
performed by the Trustee pursuant to its obligations under the
Indenture, reference is made to the material set forth under "Rights of
Unit Holders."
The Trustee's and the above described fees are payable from the Income
Account of the Trust to the extent funds are available and then from the
Capital Account of the Trust. Since the Trustee has the use of the funds
being held in the Capital and Income Accounts for payment of expenses
and redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to the Trust is expected to result from
the use of these funds.
Each of the above mentioned fees may be increased without approval of
the Unit holders by amounts not exceeding proportionate increases under
the category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor. In addition,
with respect to the fees payable to the Sponsor or an affiliate of the
Sponsor for providing bookkeeping and other administrative services,
supervisor 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.
Page 7
The following additional charges are or may be incurred by the Trust:
all legal and annual auditing expenses of the Trustee incurred by or in
connection with its responsibilities under the Indenture; the expenses
and costs of any action undertaken by the Trustee to protect the Trust
and the rights and interests of the Unit holders; fees of the Trustee
for any extraordinary services performed under the Indenture;
indemnification of the Trustee for any loss, liability or expense
incurred by it without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with its acceptance or
administration of the Trust; any offering costs incurred after the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period; indemnification of the Sponsor for any
loss, liability or expense incurred without gross negligence, bad faith
or willful misconduct in acting as Depositor of the Trust; all taxes and
other government charges imposed upon the Securities or any part of the
Trust (no such taxes or charges are being levied or made or, to the
knowledge of the Sponsor, contemplated). The above expenses and the
Trustee's annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to sell
Equity Securities in the Trust in order to make funds available to pay
all these amounts if funds are not otherwise available in the Income and
Capital Accounts of the Trust. Since the Equity Securities are all
common stocks and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any assurance that dividends
will be sufficient to meet any or all expenses of the Trust. As
described above, if dividends are insufficient to cover expenses, it is
likely that Equity Securities will have to be sold to meet the 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.
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 advisors in determining the Federal,
state, local and any other tax consequences of the purchase, ownership
and disposition of Units in the Trust. For purposes of the following
discussion and opinion, it is assumed that each Equity Security is
equity for Federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of each of the assets of the Trust under the
Code; and the income of the Trust will be treated as income of the Unit
holders thereof under the Code. Each Unit holder will be considered to
have received his or her pro rata share of the income derived from each
Equity Security when such income is considered to be received by the
Trust.
2. Each Unit holder will be considered to have received all of the
dividends paid on his or her pro rata portion of each Equity Security
when such dividends are considered to be received by the Trust
regardless of whether such dividends are used to pay a portion of the
deferred sales charge. Unit holders will be taxed in this manner
regardless of whether distributions from the Trust are actually received
by the Unit holder.
3. Each Unit holder will have a taxable event when the Trust disposes
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by
such Unit holder (except to the extent an In-Kind distribution of stocks
is received by such Unit holder as described below). The price a Unit
holder pays for his or her Units, generally including sales charges, is
allocated among his or her pro rata portion of each Equity Security held
by the Trust (in proportion to the fair market values thereof on the
valuation date closest to the date the Unit holder purchases his or her
Units) in order to determine the tax basis for his or her pro rata
portion of each Equity Security held by the Trust. Unit holders should
consult their own tax advisors with regard to calculation of basis. For
Page 8
Federal income tax purposes, a Unit holder's pro rata portion of
dividends, as defined by Section 316 of the Code, paid by a corporation
with respect to an Equity Security held by the Trust is taxable as
ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Equity Security which exceed such current and
accumulated earnings and profits will first reduce a Unit holder's tax
basis in such Equity Security, and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall generally
be treated as capital gain. In general, the holding period for such
capital gain will be determined by the period of time a Unit holder has
held his or her Units.
4. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital gain (except in the case of
a dealer or a financial institution). A Unit holder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of
Equity Securities held by the Trust will generally be considered a
capital loss (except in the case of a dealer or a financial
institution). Unit holders should consult their tax advisors regarding
the recognition of such capital gains and losses for Federal income tax
purposes.
Deferred Sales Charge. Generally, the tax basis of a Unit holder
includes sales charges, and such charges are not deductible. A portion
of the sales charge for the Trust is deferred. It is possible that for
Federal income tax purposes a portion of the deferred sales charge may
be treated as interest which would be deductible by a Unit holder
subject to limitations on the deduction of investment interest. In such
a case, the non-interest portion of the deferred sales charge should 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 advisors as to the income tax consequences of the deferred
sales charge.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with respect
to such Unit holder's pro rata portion of dividends received by the
Trust (to the extent such dividends are taxable as ordinary income, as
discussed above, and are attributable to domestic corporations) in the
same manner as if such corporation directly owned the Equity Securities
paying such dividends (other than corporate Unit holders, such as "S"
corporations, which are not eligible for the deduction because of their
special characteristics and other than for purposes of special taxes
such as the accumulated earnings tax and the personal holding
corporation tax). However, a corporation owning Units should be aware
that Sections 246 and 246A of the Code impose additional limitations on
the eligibility of dividends for the 70% dividends received deduction.
These limitations include a requirement that stock (and therefore Units)
must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address
special rules that must be considered in determining whether the 46-day
holding period requirement is met. Moreover, the allowable percentage of
the deduction will be reduced from 70% if a corporate Unit holder owns
certain stock (or Units) the financing of which is directly attributable
to indebtedness incurred by such corporation.
To the extent dividends received by the Trust are attributable to
foreign corporations, a corporation that owns Units will not be entitled
to the dividends received deduction with respect to its pro rata portion
of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisors with respect to the limitations
on and possible modifications to the dividends received deduction.
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.
Page 9
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Unit holders should consult with their advisors regarding the
limitations on the deductibility of Trust expenses.
Recognition of Taxable Gain or Loss Upon Disposition of Equity
Securities by the Trust or Disposition of Units. As discussed above, a
Unit holder may recognize taxable gain (or loss) when an Equity Security
is disposed of by the Trust or if the Unit holder disposes of a Unit.
The Internal Revenue Service Restructuring and Reform Act of 1998 (the
"1998 Tax Act") provides that 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) realized from property
(with certain exclusions) is subject to a maximum marginal stated tax
rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Capital gain or 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. 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. The legislation is generally effective
retroactively for amounts properly taken into account on or after
January 1, 1998. Capital gains realized from assets held for one year or
less are taxed at the same rates as ordinary income.
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 advisors 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, including his or her pro rata portion of all the Equity
Securities represented by the Unit.
The Taxpayer Relief Act of 1997 ("the 1997 Act") includes provisions
that treat certain transactions designed to reduce or eliminate risk of
loss and opportunities for gain (e.g., short sales, offsetting notional
principal contracts, futures or forward contracts or similar
transactions) as constructive sales for purposes of recognition of gain
(but not loss) and for purposes of determining the holding period. Unit
holders should consult their own tax advisors with regard to any
constructive sale 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 1,000 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
Distribution will be liable for expenses related thereto (the
"Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See "Rights
of Unit Holders-How are Income and Capital Distributed?" As previously
discussed, prior to the redemption of Units or the termination of the
Trust, a Unit holder is considered as owning a pro rata portion of each
of the Trust's assets for Federal income tax purposes. The receipt of an
In-Kind Distribution will result in a Unit holder receiving an undivided
interest in whole shares of stock plus, possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution with respect to each Equity Security owned by the Trust
will depend on whether or not a Unit holder receives cash in addition to
Equity Securities. An "Equity Security" for this purpose is a particular
class of stock issued by a particular corporation. A Unit holder will
not recognize gain or loss if a Unit holder only receives Equity
Securities in exchange for his or her pro rata portion in the Equity
Securities held by the Trust. However, if a Unit holder also receives
cash in exchange for a fractional share of an Equity Security held by
the Trust, such Unit holder will generally recognize gain or loss based
upon the difference between the amount of cash received by the Unit
holder and his tax basis in such fractional share of an Equity Security
held by the Trust.
Because the Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by the Trust.
The amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
owned by the Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisors in this regard.
Computation of the Unit Holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in the Trust in accordance
with the proportion of the fair market values of such Equity Securities
Page 10
as of the valuation date nearest the date the Units are purchased in
order to determine such Unit holder's tax basis for his or her pro rata
portion of each Equity Security.
A Unit holder's tax basis in his or her Units and his or her pro rata
portion of an Equity Security held by the Trust will be reduced to the
extent dividends paid with respect to such Equity Security are received
by the Trust which are not taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by the Trust to such Unit holder (including amounts
received upon the redemption of Units) will be subject to back-up
withholding. Distributions by the Trust (other than those that are not
treated as United States source income, if any) will generally be
subject to United States income taxation and withholding in the case of
Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax
advisors.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unit holders and derived from dividends of foreign corporations will not
be subject to U.S. withholding tax provided that less than 25 percent of
the gross income of the foreign corporation for a three-year period
ending with the close of its taxable year preceding payment was not
effectively connected to the conduct of a trade or business within the
United States. In addition, such earnings may be exempt from U.S.
withholding pursuant to a specific treaty between the United States and
a foreign country. Non-U.S. Unit holders should consult their own tax
advisors regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject
to foreign withholding taxes and Unit holders should consult their tax
advisors regarding the potential tax consequences relating to the
payment of any such withholding taxes by the Trust. Any dividends
withheld as a result thereof will nevertheless be treated as income to
the Unit holders. Because, under the grantor trust rules, an investor is
deemed to have paid directly his share of foreign taxes that have been
paid or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States income tax purposes with respect
to such taxes. The 1997 Act imposes a required holding period for such
credits. Investors should consult their tax advisors with respect to
foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unit
holder a statement containing information relating to the dividends
received by the Trust on the Equity Securities, the gross proceeds
received by the Trust from the disposition of any Equity Security
(resulting from redemption or the sale of any Equity Security) and the
fees and expenses paid by the Trust. The Trustee will also furnish
annual information returns to Unit holders and to the Internal Revenue
Service.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Are Investments in the Trust Eligible for
Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
The foregoing discussion relates only to the tax treatment of U.S. Unit
holders ("U.S. Unit holders") with regard to United States federal and
certain aspects of New York State and City income taxes. Unit holders
may be subject to taxation in New York or in other jurisdictions and
should consult their own tax advisors in this regard. As used herein,
the term "U.S. Unit holder" means an owner of a Unit in the Trust that
(a) is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the
income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unit holder
in paragraph (a) but whose income from a Unit is effectively connected
with such Unit holder's conduct of a United States trade or business.
The term also includes certain former citizens of the United States
whose income and gain on the Units will be taxable. Unit holders should
consult their tax advisors regarding potential foreign, state or local
taxation with respect to Units.
Page 11
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 advisors
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are the Equity Securities?
The Trust consist of different issues of Equity Securities which are
listed on a national securities exchange or The Nasdaq Stock Market or
traded in the over-the-counter market. See "What are the Equity
Securities Selected for the Semiconductor Growth Trust Series?" 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 of an investment in the
technology sector in general and the semiconductor industry in
particular.
Technology companies generally include companies involved in the
development, design, manufacture and sale of computers, computer-related
equipment, computer networks, communications systems, telecommunications
products, electronic products and other related products, systems and
services. The market for these products, including semiconductors, is
characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and
frequent new product introductions. The success of the issuers of the
Equity Securities depends in substantial part on the timely and
successful introduction of new products. An unexpected change in one or
more of the technologies affecting an issuer's products or in the market
for products based on a particular technology could have a material
adverse affect on an issuer's operating results. Furthermore, there can
be no assurance that the issuers of the Equity Securities will be able
to respond in a timely manner to compete in the rapidly developing
marketplace.
Based on trading history of technology stocks, factors such as
announcements of new products or development of new technologies and
general conditions of the industry have caused and are likely to cause
the market price of high-technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the Equity Securities and therefore
the ability of a Unit holder to redeem Units at a price equal to or
greater than the original price paid for such Units.
Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
Equity Securities will obtain orders of similar magnitude as past orders
from other customers. Similarly, the success of certain technology
companies is tied to a relatively small concentration of products or
technologies. Accordingly, a decline in demand of such products,
technologies or from such customers could have a material adverse impact
on issuers of the Equity Securities.
Page 12
Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the Equity Securities
to protect their proprietary rights will be adequate to prevent
misappropriation of their technology or that competitors will not
independently develop technologies that are substantially equivalent or
superior to such issuers' technology. In addition, due to the increasing
public use of the Internet, it is possible that other laws and
regulations may be adopted to address issues such as privacy, pricing,
characteristics, and quality of Internet products and services. For
example, recent proposals would prohibit the distribution of obscene,
lascivious or indecent communications on the Internet. The adoption of
any such laws could have a material adverse impact on the securities in
the Trust.
Like many areas of technology, the semiconductor business environment is
highly competitive, notoriously cyclical and subject to rapid and often
unanticipated change. Recent industry downturns have resulted, in part,
from weak pricing, persistent overcapacity, slowdown in Asian demand and
a shift in retail personal computer sales toward the low end, or "sub-
$1,000" segment. Industry growth is dependent upon several factors,
including: the rate of global economic expansion; demand for products
such as personal computers and networking and communications equipment;
excess productive capacity and the resultant effect on pricing; and the
rate of growth in the market for low-priced personal computers.
General. The Trust consists of such Equity Securities listed under the
"Schedule of Investments" for the Trust as may continue to be held from
time to time in the Trust and any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Indenture,
together with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in
any of the Equity Securities. However, should any contract for the
purchase of any of the Equity Securities initially deposited hereunder
fail, the Sponsor will, unless substantially all of the moneys held in
the Trust to cover such purchase are reinvested in substitute Equity
Securities in accordance with the Indenture, refund the cash and sales
charge attributable to such failed contract to all Unit holders on the
next distribution date.
Because certain of the Equity Securities from time to time may be sold
under certain circumstances described herein, and because the proceeds
from such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Equity
Securities under certain limited circumstances. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
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). See "Rights of Unit Holders-How May Equity
Securities be Removed from the Trust?" Equity Securities, however, will
not be sold by the Trust to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national securities
exchange, 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.
Page 13
The past market and earnings performance of the Equity Securities
included in the Trust is not predictive of their future performance.
Common stocks are especially susceptible to general stock market
movements and to volatile increases and decreases of value as market
confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding
government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common
stocks have rights to receive payments from the issuers of those common
stocks that are generally subordinate to those of creditors of, or
holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by the Trust have a right
to receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and have a right to participate in
amounts available for distribution by the issuer only after all other
claims on the issuer have been paid or provided for. Common stocks do
not represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection of
capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment of
principal, interest and dividends which could adversely affect the
ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to
assets of the issuer upon liquidation or bankruptcy. The value of common
stocks is subject to market fluctuations for as long as the common
stocks remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on the Initial Date of
Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Certain of the Equity Securities in the Trust are of foreign issuers,
and therefore, an investment in the Trust involves some investment risks
that are different in some respects from an investment in a trust that
invests entirely in securities of domestic issuers. Those investment
risks include future political and governmental restrictions which might
adversely affect the payment or receipt of payment of dividends on the
relevant Equity Securities, currency exchange rate fluctuations,
exchange control policies, and the limited liquidity and small market
capitalization of such foreign countries' securities markets. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer.
Also, foreign issuers are not necessarily subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic issuers. However, due to the
nature of the issuers of the Equity Securities included in the Trust,
the Sponsor believes that adequate information will be available to
allow the Portfolio Supervisor to provide portfolio surveillance.
Unit holders will be unable to dispose of any of the Equity Securities
in a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee will
have the right to vote all of the voting stocks in the Trust and will
vote such stocks in accordance with the instructions of the Sponsor.
What are the Equity Securities Selected for the Semiconductor Growth
Trust Series?
Semiconductors
______________
3Dfx Interactive, Inc., headquartered in San Jose, California, develops
high performance, cost-effective 3D media processors, software and
related technology for the interactive electronic entertainment market.
Altera Corporation, headquartered in San Jose, California, develops and
markets high-density CMOS (complementary-metal-oxide-semiconductor)
programmable logic devices and associated software tools for logic
development.
Analog Devices, Inc., headquartered in Norwood, Massachusetts, designs,
makes and sells a broad line of high performance linear, mixed signal
Page 14
and digital integrated circuits which address a wide range of real-world
signal processing applications.
Applied Micro Circuits Corporation, headquartered in San Diego,
California, designs, makes and markets high-performance, high-bandwidth
silicon solutions for the world's communications infrastructure.
Burr-Brown Corporation, headquartered in Tucson, Arizona, designs, makes
and markets high-performance, standard analog and mixed signal
integrated circuits used in the processing of electronic signals.
Dallas Semiconductor Corporation, headquartered in Dallas, Texas,
develops, makes and markets high-performance complementary metal oxide
silicon integrated circuits and semiconductor-based systems that provide
solutions to electronic design problems in existing and emerging markets.
Intel Corporation, headquartered in Santa Clara, California, designs,
develops, makes and markets advanced microcomputer components and
related products at various levels of integration. Microcomputer
components are integrated circuits consisting of silicon-based
semiconductors etched with complex patterns of transistors.
Linear Technology Corporation, headquartered in Milpitas, California,
designs, makes and markets a broad line of standard high performance
linear integrated circuits using silicon gate CMOS, BiCMOS and bipolar
and complementary bipolar wafer process technologies. Linear circuits
monitor, condition, amplify, or transform continuous analog signals
associated with such physical properties as temperature, pressure,
weight, light, sound or speed.
Maxim Integrated Products, Inc., headquartered in Sunnyvale, California,
designs and makes linear and mixed-signal integrated circuits. Products
include data converters, interface circuits, power supplies,
microprocessor supervisors, battery chargers, operational amplifiers,
multiplexers, switches and voltage references.
Micrel, Incorporated, headquartered in San Jose, California, designs,
develops, manufactures and markets a range of high-performance analog
integrated circuits that are used in a wide variety of electronic
products, including those in the communications, computer and industrial
markets.
Microchip Technology, Inc., headquartered in Chandler, Arizona,
develops, makes and markets field programmable 8-bit microcontrollers,
application-specific standard products and related specialty memory
products for high-volume embedded control applications in the consumer,
automotive, office automation, communications and industrial markets.
NeoMagic Corporation, headquartered in Santa Clara, California, designs,
develops and markets multimedia accelerators for notebook PC
manufacturers. The company's products enable notebook PC manufacturers
to provide state-of-the-art multimedia capability while decreasing power
consumption, size, weight, system design complexity and cost.
PMC-Sierra, Inc., headquartered in Burnaby, British Columbia, Canada,
designs, develops, markets and supports high-performance semiconductor
system solutions used in broad-band communications infrastructures, high-
band width networks and multimedia personal computers.
QLogic Corporation, headquartered in Costa Mesa, California, develops
and markets host and peripheral input/output controller integrated
circuits and host adapter cards. The company also develops small
computer system interface target and disk controller chips.
SMART Modular Technologies, Inc., headquartered in Fremont, California,
designs, makes and markets memory modules, personal computer card
products and embedded processor modules, primarily to leading original
equipment manufacturers in the computer, networking and
telecommunications industries.
STMicroelectronics N.V., headquartered in St. Genis Pouilly, France,
designs, develops, makes and markets a broad range of semiconductor
integrated circuits and discrete devices used in a variety of
microelectronic applications, including telecommunications and computer
systems, consumer products, automotive products, and industrial
automation and control systems.
Texas Instruments, Inc., headquartered in Dallas, Texas, designs and
makes digital signal processing devices and other semiconductor
products. Other products include electrical and electronic controls,
electronic connectors, sensors, radio-frequency identification systems,
clad metals and educational and graphing calculators.
Vitesse Semiconductor Corporation, headquartered in Camarillo,
California, designs, develops, makes and sells digital gallium arsenide
integrated circuits primarily for telecommunications, data
communications and automated test equipment systems providers.
Page 15
Semiconductor Design Software
_____________________________
Cadence Design Systems, Inc., headquartered in San Jose, California,
develops, markets and supports electronic design automation software
products that automate, enhance and accelerate the design and
verification of integrated circuits and electronic systems.
Synopsys, Inc., headquartered in Mountain View, California, develops,
markets and supports electronic design automation products for designers
of integrated circuits and electronic systems. The company also provides
training, support and consulting services for its customers.
Semiconductor Equipment
_______________________
ASM Lithography Holding N.V., headquartered in Veldhoven, The
Netherlands, develops, makes, sells and services advanced
photolithography projection systems, known as wafer steppers, that are
essential to the fabrication of modern integrated circuits.
Applied Materials, Inc., headquartered in Santa Clara, California,
develops, makes, sells and services semiconductor wafer fabrication
equipment and related spare parts worldwide. The company also supplies
critical dimension scanning electron microscope systems, and wafer and
reticle inspection systems.
Credence Systems Corporation, headquartered in Fremont, California,
designs, makes, sells and services automatic test equipment used in the
production of semiconductors. The company makes a wide range of products
that test digital logic, mixed-signal and non-volatile memory
semiconductors.
KLA-Tencor Corporation, headquartered in Milpitas, California, designs,
makes, markets and services yield management and process monitoring
systems for the semiconductor manufacturing industry.
Novellus Systems, Inc., headquartered in San Jose, California, designs,
makes, sells, and services chemical vapor deposition equipment used in
the fabrication of integrated circuits. The company sells its products
to semiconductor manufacturers in the United States, Europe and the Far
East.
The Sponsor has obtained the foregoing descriptions from sources it
deems reliable. The Sponsor has not independently verified the provided
information either in terms of accuracy or completeness.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life of the
Trust and may be more or less than the price at which they were
deposited in the Trust. The Equity Securities may appreciate or
depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities.
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Equity Security will not be delivered ("Failed Contract
Obligations") to the Trust, the Sponsor is authorized under the
Indenture to direct the Trustee to acquire other Equity Securities
("Replacement Securities"). Any Replacement Security will be identical
to those which were the subject of the failed contract. The Replacement
Securities must be purchased within 20 days after delivery of the notice
of a failed contract and the purchase price may not exceed the amount of
funds reserved for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraph is not utilized to acquire Replacement Securities in the event
of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
the Trust and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unit holders should be aware that, at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Equity Securities, or cash (including a letter of credit) with
instructions to purchase additional Equity Securities, in the Trust and
the issuance of a corresponding number of additional Units. If the
Sponsor deposits cash, existing and new investors could experience a
dilution of their investments and a reduction in anticipated income
because of fluctuations in the prices of the Equity Securities between
Page 16
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trust will pay the brokerage fees associated
therewith.
The Trust consists of the Equity Securities listed under "Schedule of
Investments" for the Trust (or contracts to purchase such Securities) as
may continue to be held from time to time in the Trust and any
additional Equity Securities acquired and held by the Trust pursuant to
the provisions of the Indenture (including provisions with respect to
deposits into the Trust of Equity Securities in connection with the
issuance of additional Units).
Once all of the Equity Securities in the Trust are acquired, the Trustee
will have no power to vary the investments of the Trust, i.e., the
Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment, and may dispose of
Equity Securities only under limited circumstances. See "Rights of Units
Holders-How May Equity Securities be Removed from the Trust?"
Like other investment companies, financial and business organizations
and individuals around the world, the Trust could be adversely affected
if the computer systems used by the Sponsor, Evaluator, Portfolio
Supervisor or Trustee or other service providers to the Trust do not
properly process and calculate date-related information and data
involving dates of January 1, 2000 and thereafter. This is commonly
known as the "Year 2000 Problem." The Sponsor, Evaluator, Portfolio
Supervisor and Trustee are taking steps that they believe are reasonably
designed to address the Year 2000 Problem with respect to computer
systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Trust's other service providers.
At this time, however, there can be no assurance that these steps will
be sufficient to avoid any adverse impact to the Trust.
The Year 2000 Problem is expected to impact corporations, which may
include issuers of the Equity Securities contained in the Trust, to
varying degrees based upon various factors, including, but not limited
to, their industry sector and degree of technological sophistication.
The Sponsor is unable to predict what impact, if any, the Year 2000
Problem will have on issuers of the Equity Securities contained in the
Trust.
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity Security
which might reasonably be expected to have a material adverse effect on
the Trust. At any time after the Initial Date of Deposit, litigation may
be instituted on a variety of grounds with respect to the Equity
Securities. The Sponsor is unable to predict whether any such litigation
will be instituted, or if instituted, whether such litigation might have
a material adverse effect on the Trust.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisors. Further, at any time after the
Initial Date of Deposit, legislation may be enacted that could
negatively affect the Equity Securities in the Trust or the issuers of
the Equity Securities. Changing approaches to regulation, including, but
not limited to the semiconductor industry, may have a negative impact on
certain companies represented in the Trust. There can be no assurance
that future legislation, regulation or deregulation will not have a
material adverse effect on the Trust or will not impair the ability of
the issuers of the Equity Securities to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities and
the ask prices of over-the-counter traded Equity Securities), plus or
minus cash, if any, in the Income and Capital Accounts of the Trust,
plus an initial sales charge equal to the difference between the maximum
sales charge of 4.5% of the Public Offering Price and the maximum
remaining deferred sales charge, initially $.35 per Unit, divided by the
number of Units of the Trust outstanding. Commencing on March 19, 1999,
and on the twentieth day of each month thereafter (or if such date is
not a business day, on the preceding business day) through July 20,
1999, a deferred sales charge of $.07 will be assessed per Unit per
month. Units purchased subsequent to the initial deferred sales charge
payment but still during the initial offering period will be subject to
the initial sales charge and the remaining deferred sales charge
payments not yet collected. The deferred sales charge will be paid from
Page 17
funds in the Income and/or Capital Accounts, if sufficient, or from the
periodic sale of Equity Securities. The total maximum sales charge
assessed to Unit holders on a per Unit basis will be 4.5% of the Public
Offering Price (equivalent to 4.545% of the net amount invested,
exclusive of the deferred sales charge). In addition, a portion of the
Public Offering Price on Units purchased prior to the earlier of six
months after the Initial Date of Deposit or the end of the initial
offering period also consists of Equity Securities in an amount
sufficient to pay for all or a portion of the costs incurred in
establishing the Trust, including the costs of preparing the
registration statement, the 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. The organizational and
offering costs will be deducted from the assets of the Trust as of the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period. For secondary market sales after the
completion of the deferred sales charge period, the Public Offering
Price is also based on the aggregate underlying value of the Equity
Securities (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, plus a one-time initial sales charge of 4.5% of the Public
Offering Price (equivalent to 4.712% of the net amount invested),
divided by the number of outstanding Units of the Trust, which will be
reduced by 1/2 of 1% on each subsequent August 31, commencing August 31,
1999 to a minimum sales charge of 3.0%.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in the
Trust (generally determined by the closing sale prices of listed Equity
Securities and the ask prices of over-the-counter traded Equity
Securities), plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus, until the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period,
estimated organizational and offering costs, divided by the number of
Units of the Trust outstanding, and reduced by the deferred sales charge
not yet paid. During the secondary market, the Sponsor's Repurchase
Price is also based on the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale prices
of listed Equity Securities and the bid prices of over-the-counter
traded Equity Securities), plus or minus cash, if any, in the Income and
Capital Accounts of the Trust, divided by the number of outstanding
Units of the Trust.
The minimum amount which an investor may purchase of the Trust is $1,000
($500 for Individual Retirement Accounts or other retirement plans). The
applicable sales charge for the Trust for both primary and secondary
market sales is reduced by a discount as indicated below for aggregate
volume purchases of the Trust (except for sales made pursuant to a "wrap
fee account" or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Primary and Secondary
_____________________
Percent of Percent of
Dollar Amount of Transaction Offering Net Amount
at Public Offering Price* Price Invested
____________________________ __________ __________
<S> <C> <C>
$ 50,000 but less than $100,000 0.25% 0.2506%
$100,000 but less than $250,000 0.50% 0.5025%
$250,000 but less than $500,000 1.00% 1.0101%
$500,000 or more 2.00% 2.0408%
___________
<FN>
* The breakpoint sales charges are also applied on a Unit basis
utilizing a breakpoint equivalent in the above table of $10 per Unit and
will be applied on whichever basis is more favorable to the investor.
The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
</FN>
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
broker/dealer, bank or other selling agent. The reduced sales charge
structure will apply on all purchases of Units of the Trust by the same
person on any one day from any one broker/dealer, bank or other selling
agent. An investor may aggregate purchases of Units of the Trust
contained in this Prospectus and other trusts sponsored by Nike
Securities L.P. which are currently in the initial offering period and
which have substantially the same sales load and years to maturity as
the Trust for purposes of qualifying for volume purchase discounts
listed above. Unit holders of other unit investment trusts in which the
Sponsor acted as sole Principal Underwriter and which at the time of
their creation had substantially the same sales load and approximately a
Page 18
five-year term ("Eligible Sector Trust") may utilize their redemption or
termination proceeds from the Eligible Sector Trust to acquire Units of
the Trust during the initial offering period subject only to the
remaining deferred sales charge to be collected on such Units. Unit
holders who redeem Units of the Eligible Sector Trust should note that
they will be assessed the amount of any remaining deferred sales charges
on such units at the time of redemption. Additionally, Units purchased
in the name of the spouse of a purchaser or in the name of a child of
such purchaser under 21 years of age will be deemed, for the purposes of
calculating the applicable sales charge, to be additional purchases by
the purchaser. The reduced sales charges will also be applicable to a
trustee or other fiduciary purchasing securities for a single trust
estate or single fiduciary account. The purchaser must inform the
broker/dealer, bank or other selling agent of any such combined purchase
prior to the sale in order to obtain the indicated discount. In
addition, with respect to the employees, officers and directors
(including their immediate family members, defined as spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-
in-law, sons-in-law and daughters-in-law, and trustees, custodians or
fiduciaries for the benefit of such persons) of the Sponsor and
broker/dealers, banks or other selling agents and their subsidiaries and
vendors providing services to the Sponsor, Units may be purchased at the
Public Offering Price less the concession the Sponsor typically allows
to dealers and other selling agents.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to
dealers and other selling agents (see "Public Offering-How are Units
Distributed?") for purchases by investors who purchase Units through
registered investment advisors, certified financial planners or
registered broker/dealers who in each case either charge periodic fees
for financial planning, investment advisory or asset management
services, or provide such services in connection with the establishment
of an investment account for which a comprehensive "wrap fee" charge is
imposed.
Had the Units of the 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 the "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 the
"Summary of Essential Information" in accordance with fluctuations in
the prices of the underlying Equity Securities. During the initial
offering period, the aggregate value of the Units of the Trust shall be
determined on the basis of the aggregate underlying value of the Equity
Securities therein plus or minus cash, if any, in the Income and Capital
Accounts of the Trust. The aggregate underlying value of the Equity
Securities during the initial offering period will be determined in the
following manner: if the Equity Securities are listed, this evaluation
is generally based on the closing sale prices on that exchange (unless
it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at
the closing ask prices. If the Equity Securities are not so listed or,
if so listed and the principal market therefor is other than on the
exchange, the evaluation shall generally be based on the current ask
prices on the over-the-counter market (unless it is determined that
these prices are inappropriate as a basis for evaluation). If current
ask prices are unavailable, the evaluation is generally determined (a)
on the basis of current ask prices for comparable securities, (b) by
appraising the value of the Equity Securities on the ask side of the
market or (c) by any combination of the above.
The Evaluator on each business day will appraise or cause to be
appraised the value of the underlying Equity Securities in the Trust as
of the Evaluation Time and will adjust the Public Offering Price of the
Units commensurate with such valuation. Such Public Offering Price will
be effective for all orders received prior to the Evaluation Time on
each such day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day which is not a
business day, will be held until the next determination of price. The
term "business day," as used herein and under "Rights of Unit Holders-
How May Units be Redeemed?", shall exclude Saturdays, Sundays and the
following holidays as observed by the New York Stock Exchange, Inc.: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving and Christmas Day.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if any, in
the Income and Capital Accounts of the Trust plus the applicable sales
charge. The aggregate underlying value of the Equity Securities for
secondary market sales is calculated in the same manner as described
Page 19
above for sales made during the initial offering period with the
exception that bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of the Units on the date of
settlement provided payment has been received. Cash, if any, made
available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934. Delivery of Certificates representing
Units so ordered will be made three business days following such order
or shortly thereafter. See "Rights of Unit Holders-How May Units be
Redeemed?" for information regarding the ability to redeem Units ordered
for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the Initial
Date of Deposit and (ii) for additional Units issued after such date as
additional Equity Securities or cash are deposited by the Sponsor, Units
will be distributed to the public at the then current Public Offering
Price. The initial offering period may be up to approximately 360 days.
During such period, the Sponsor may deposit additional Equity Securities
or cash in 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 3.2% of the Public Offering Price, and, for secondary
market sales, 3.2% of the Public Offering Price (or 65% of the then
current maximum sales charge after August 31, 1999). Dealers and other
selling agents will be allowed a concession or agency commission on the
sale of Units purchased with redemption or termination proceeds from an
Eligible Sector Trust equal to (i) $.22 per Unit on Units sold subject
to a deferred sales charge of $.35 per Unit or (ii) 63% of the then
current maximum remaining deferred sales charge on Units sold subject to
a deferred sales charge of less than $.35 per Unit. Volume concessions
or agency commissions of an additional 0.30% of the Public Offering
Price on all purchases of Units of the Trust will be given to any
broker/dealer or bank who has purchases of Trust Units from the Sponsor
on the Initial Date of Deposit of at least $100,000 or $250,000 on any
day thereafter or who was entitled to receive such additional volume
concession or agency commission in connection with the sale of Units of
the Trusts contained in FT 259. In addition, dealers and other selling
agents will receive an additional volume concession or agency commission
with respect to sales of Units of the Trust in the amounts set forth
below:
Additional
Total Sales per Trust Concession
_____________________ __________
$ 1,000,000 but less than $2,000,000 .10%
$ 2,000,000 but less than $3,000,000 .15%
$ 3,000,000 but less than $10,000,000 .20%
$10,000,000 or more .30%
Effective on each August 31, commencing August 31, 1999, the 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
Page 20
underwriting Trust Units; however, the Glass-Steagall Act does permit
certain agency transactions and the banking regulators have not
indicated that these particular agency transactions are not permitted
under such Act. In Texas and in certain other states, any banks making
Units available must be registered as broker/dealers under state law.
From time to time the Sponsor may implement programs under which
broker/dealers, banks or other selling agents of 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 a broker/dealer,
bank or other selling agent may be eligible to win other nominal awards
for certain sales efforts, or under which the Sponsor will reallow to
any such dealer that sponsors sales contests or recognition programs
conforming to criteria established by the Sponsor, or participates in
sales programs sponsored by the Sponsor, an amount not exceeding the
total applicable sales charges on the sales generated by such person at
the public offering price during such programs. Also, the Sponsor in its
discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying dealers for certain
services or activities which are primarily intended to result in sales
of Units of 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 corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ
from those of the Trust. U.S. Government bonds, for example, are
backed by the full faith and credit of the U.S. Government and bank
CDs and money market accounts are insured by an agency of the federal
government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics
of the Trust are described more fully elsewhere in this Prospectus.
Information on percentage changes in the dollar value of Units, on the
basis of changes in Unit price may be included from time to time in
advertisements, sales literature, reports and other information
furnished to current or prospective Unit holders. Total return figures
are not averaged, and may not reflect deduction of the sales charge,
which would decrease the return. Average annualized return figures
reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance may not be indicative of future results. The Trust's
portfolio is not managed. Unit price and return fluctuate with the value
of the common stocks in the Trust's portfolio, so there may be a gain or
loss when Units are sold.
The Trust's performance may be compared to performance on a total return
basis with the Dow Jones Industrial Average, the S&P 500 Composite Stock
Price Index, or performance data from Lipper Analytical Services, Inc.
and Morningstar Publications, Inc. or from publications such as Money,
The New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
What are the Sponsor's Profits?
The Sponsor of the Trust will receive a gross sales commission equal to
4.5% of the Public Offering Price of the Units (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge), less
any reduced sales charge described under "Public Offering-How is the
Public Offering Price Determined?" See "Public Offering-How are Units
Distributed?" for information regarding the receipt of additional
concessions available to dealers and other selling agents. In addition,
the Sponsor may be considered to have realized a profit or to have
sustained a loss, as the case may be, in the amount of any difference
between the cost of the Equity Securities to the Trust (which is based
on the Evaluator's determination of the aggregate offering price of the
underlying Equity Securities of the Trust on the Initial Date of Deposit
as well as subsequent deposits) and the cost of such Equity Securities
Page 21
to the Sponsor. See Note (2) of "Schedule of Investments" for the Trust.
During the initial offering period, the dealers and other selling agents
also may realize profits or sustain losses as a result of fluctuations
after the Initial Date of Deposit in the Public Offering Price received
by the dealers and other selling agents upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between the
price at which Units are purchased and the price at which Units are
resold (which price includes a sales charge of 4.5% subject to reduction
beginning August 31, 1999) or redeemed. The secondary market public
offering price of Units may be greater or less than the cost of such
Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although not obligated to do so, the
Sponsor intends to maintain a market for the Units and continuously
offer to purchase Units at prices, subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in the
Trust plus or minus cash, if any, in the Income and Capital Accounts of
the Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee in
transferring and recording the ownership of Units, will be borne by the
Sponsor. If the supply of Units exceeds demand, or for some other
business reason, the Sponsor may discontinue purchases of Units at such
prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS OR HER UNITS, HE OR
SHE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET PRICES PRIOR TO
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. Units subject to a
deferred sales charge which are sold or tendered for redemption prior to
such time as the entire deferred sales charge on such Units has been
collected will be assessed the amount of the remaining deferred sales
charge at the time of sale or redemption.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his or her 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 (i.e., book-
entry) form. The Trustee will maintain an account for each such Unit
holder and will credit each such account with the number of Units
purchased by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee will send
to the registered owner of Units a written initial transaction statement
containing a description of their respective Trust; the number of Units
issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any liens and
restrictions of the issuer and any adverse claims to which such Units
are or may be subject or a statement that there are no such liens,
restrictions or adverse claims; and the date the transfer was
registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee and
no certificate will be issued upon the transfer unless requested by the
Unit holder. A Unit holder may at any time request the Trustee to issue
certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
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connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in the Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Distribution Record
Date. See "Summary of Essential Information." Persons who purchase Units
will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is
the responsibility of the purchaser, but in the normal course of
business such notice is provided by the selling broker-dealer. The pro
rata share of cash in the Capital Account of the Trust will be computed
as of the fifteenth day of each month. Proceeds received on the sale of
any Equity Securities in the Trust, to the extent not used to meet
redemptions of Units or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. The Trustee is not required to pay interest
on funds held in the Capital Account of 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, Equity
Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made
to an account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
the Trust if the Trustee has not been furnished the Unit holder's tax
identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and
may be recovered by the Unit holder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
will, upon surrender of his or her Units for redemption, receive: (i)
the pro rata share of the amounts realized upon the disposition of
Equity Securities, unless he or she elects an In-Kind Distribution as
described under "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 dividends
received on the Equity Securities therein. All other receipts (e.g.
return of capital, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable period of
time after the end of each calendar year, the Trustee shall furnish to
each person who at any time during the calendar year was a Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Equity
Securities sold during the year and the Equity Securities held at the
Page 23
end of such year by the Trust; (3) the redemption price per Unit based
upon a computation thereof on the 31st day of December of such year (or
the last business day prior thereto); and (4) amounts of income and
capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his or her Units by tender
to the Trustee at its unit investment trust office in the City of New
York of the certificates representing the Units to be redeemed, or in
the case of uncertificated Units, delivery of a request for redemption,
duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed as explained above (or by providing satisfactory
indemnity, as in connection with lost, stolen or destroyed
certificates), and payment of applicable governmental charges, if any.
No redemption fee will be charged. On the third business day following
such tender, the Unit holder will be entitled to receive in cash an
amount for each Unit equal to the Redemption Price per Unit next
computed after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received by the
Trustee (if such day is a day on which the New York Stock Exchange is
open for trading), except that as regards Units received after 4:00 p.m.
Eastern time (or as of any earlier closing time on a day on which the
New York Stock Exchange is scheduled in advance to close at such earlier
time), the date of tender is the next day on which the New York Stock
Exchange is open for trading and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption
price computed on that day. Units so redeemed shall be cancelled. Units
tendered for redemption prior to such time as the entire deferred sales
charge on such Units has been collected will be assessed the amount of
the remaining deferred sales charge at the time of redemption.
Any Unit holder tendering 1,000 Units or more of the Trust for
redemption may request by written notice submitted at the time of tender
from the Trustee in lieu of a cash redemption a distribution of shares
of Equity Securities in an amount and value of Equity Securities per
Unit equal to the Redemption Price Per Unit as determined as of the
evaluation next following tender. However, no In-Kind Distribution
requests submitted during the nine business days prior to the Mandatory
Termination Date will be honored. To the extent possible, in-kind
distributions ("In-Kind Distributions") shall be made by the Trustee
through the distribution of each of the Equity Securities in book-entry
form to the account of the Unit holder's bank or broker-dealer at the
Depository Trust Company. An In-Kind Distribution will be reduced by
customary transfer and registration charges. The tendering Unit holder
will receive his or her pro rata number of whole shares of each of the
Equity Securities comprising the portfolio and cash from the Capital
Account equal to the fractional shares to which the tendering Unit
holder is entitled. The Trustee may adjust the number of shares of any
issue of Equity Securities included in a Unit holder's In-Kind
Distribution to facilitate the distribution of whole shares, such
adjustment to be made on the basis of the value of Equity Securities on
the date of tender. See "What is the Federal Tax Status of Unit
Holders?" If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unit holder, the Trustee may
sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder's tax identification number in the manner required by such
regulations. For further information regarding this withholding, see
"Rights of Unit Holders-How are Income and Capital Distributed?" In the
event the Trustee has not been previously provided such number, one must
be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size and diversity of the Trust will be
reduced. Such sales may be required at a time when Equity Securities
would not otherwise be sold and might result in lower prices than might
otherwise be realized.
Page 24
The Redemption Price per Unit will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the Trust. The
Redemption Price per Unit is the pro rata share of each Unit determined
by the Trustee by adding: (1) the cash on hand in the Trust other than
cash deposited in the Trust to purchase Equity Securities not applied to
the purchase of such Equity Securities; (2) the aggregate value of the
Equity Securities held in the Trust, as determined by the Evaluator on
the basis of the aggregate underlying value of the Equity Securities in
the Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation; and
deducting therefrom: (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust; (2) any amounts owing to
the Trustee for its advances; (3) an amount representing estimated
accrued expenses of the Trust, including but not limited to fees and
expenses of the Trustee (including legal and auditing fees), the
Evaluator and supervisory fees, if any; (4) cash held for distribution
to Unit holders of record of the Trust as of the business day prior to
the evaluation being made; and (5) other liabilities incurred by the
Trust; and finally dividing the results of such computation by the
number of Units of the Trust outstanding as of the date thereof. The
redemption price per Unit will be assessed the amount, if any, of the
remaining deferred sales charge at the time of redemption. Until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organizational and offering costs as set forth under "Summary
of Essential Information."
The aggregate value of the Equity Securities used to calculate the
Redemption Price per Unit will be determined in the following manner: if
the Equity Securities are listed, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is
no closing sale price on that exchange, at the closing ask prices
(during the initial offering period) or the closing bid prices
(subsequent to the initial offering period). If the Equity Securities
are not so listed or, if so listed and the principal market therefor is
other than on the exchange, the evaluation shall generally be based on
the current ask or bid prices (as appropriate) on the over-the-counter
market (unless these prices are inappropriate as a basis for
evaluation). If current ask or bid prices (as appropriate) are
unavailable, the evaluation is generally determined (a) on the basis of
current ask or bid prices (as appropriate) for comparable securities,
(b) by appraising the value of the Equity Securities on the ask or bid
side of the market (as appropriate) or (c) by any combination of the
above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he or she would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
Page 25
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of an Equity Security in
the event that an issuer defaults in the payment of a dividend that has
been declared, that any action or proceeding has been instituted
restraining the payment of dividends or there exists any legal question
or impediment affecting such Equity Security, that the issuer of the
Equity Security has breached a covenant which would affect the payments
of dividends, the credit standing of the issuer or otherwise impair the
sound investment character of the Equity Security, that the issuer has
defaulted on the payment on any other of its outstanding obligations,
that the price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Sponsor,
the retention of such Equity Securities would be detrimental to the
Trust. Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" for Failed Contract Obligations, the
acquisition by the Trust of any securities or other property other than
the Equity Securities is prohibited. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell any securities or other
property acquired in exchange for Equity Securities such as those
acquired in connection with a merger or other transaction. If offered
such new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by the Trust, they may be accepted for deposit in
the Trust and either sold by the Trustee or held in the Trust pursuant
to the direction of the Sponsor (who may rely on the advice of the
Portfolio Supervisor). Proceeds from the sale of Equity Securities (or
any securities or other property received by the Trust in exchange for
Equity Securities) by the Trustee are credited to the Capital Account of
the Trust for distribution to Unit holders or to meet redemptions. The
Trustee may, from time to time, retain and pay compensation to the
Sponsor (or an affiliate of the Sponsor) to act as agent for the Trust
with respect to selling Equity Securities from the Trust. In acting in
such capacity, the Sponsor or its affiliate will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Equity Securities. To the extent this is not
practicable, the composition and diversity of the Equity Securities may
be altered. In order to obtain the best price for the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold. The Sponsor
may consider sales of Units of unit investment trusts which it sponsors
in making recommendations to the Trustee as to the selection of
broker/dealers to execute the Trust's portfolio transactions.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, the FT Series (formerly known as The First Trust Special
Situations Trust), The First Trust Insured Corporate Trust, The First
Trust of Insured Municipal Bonds and The First Trust GNMA. First Trust
introduced the first insured unit investment trust in 1974 and to date
more than $9 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals with
many years of experience in the unit investment trust industry. The
Sponsor is a member of the National Association of Securities Dealers,
Inc. and Securities Investor Protection Corporation and has its
principal offices at 1001 Warrenville Road, Lisle, Illinois 60532;
telephone number (630) 241-4141. As of December 31, 1997, the total
partners' capital of Nike Securities L.P. was $11,724,071 (audited).
(This paragraph relates only to the Sponsor and not to the Trust or to
any series thereof or to any other dealer. The information is included
Page 26
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 Equity Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Equity Securities. In the event of the failure of
the Sponsor to act under the Indenture, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under
the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the 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
Page 27
Evaluator may resign or may be removed by the Sponsor or the Trustee, in
which event the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." A Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
Equity Securities owned by the Trust as shown by any evaluation, is less
than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in the 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 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, Equity Securities will
begin to be sold in connection with the termination of the Trust. The
Sponsor will determine the manner, timing and execution of the sale of
the Equity Securities. Written notice of any termination of the Trust
specifying the time or times at which Unit holders may surrender their
certificates for cancellation shall be given by the Trustee to each Unit
holder at his or her address appearing on the registration books of the
Trust maintained by the Trustee. At least 60 days prior to the Mandatory
Termination Date of the Trust the Trustee will provide written notice
thereof to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges), if
such Unit holder owns at least 1,000 Units of the Trust, rather than to
receive payment in cash for such Unit holder's pro rata share of the
amounts realized upon the disposition by the Trustee of Equity
Securities. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least ten business days
prior to the Mandatory Termination Date of the Trust. Unit holders not
electing or eligible to receive a distribution of shares of Equity
Securities will receive a cash distribution from the sale of the
remaining Equity Securities within a reasonable time after the Trust is
terminated. Regardless of the distribution involved, the Trustee will
deduct from the funds of the Trust any accrued costs, expenses, advances
or indemnities provided by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Equity Securities in the Trust
in connection with termination may result in a lower amount than might
otherwise be realized if such sale were not required at such time. In
addition, to the extent that Equity Securities are sold prior to the
Page 28
Mandatory Termination Date, Unit holders will not benefit from any stock
appreciation they would have received had the Equity Securities not been
sold at such time. The Trustee will then distribute to each Unit holder
his or her pro rata share of the balance of the Income and Capital
Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Carter, Ledyard & Milburn, will act as counsel for the Trustee and as
special New York tax counsel for the Trust.
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 29
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 276
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 276, comprised of Semiconductor Growth
Trust Series, as of the opening of business on August 18, 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 August 18,
1998. An audit also includes assessing the accounting principles used
and significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 276,
comprised of the Semiconductor Growth Trust Series, at the opening of
business on August 18, 1998 in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
August 18, 1998
Page 30
Statement of Net Assets
Semiconductor Growth Trust Series
FT 276
At the Opening of Business on the
Initial Date of Deposit-August 18, 1998
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Equity Securities represented by purchase contracts (1) (2) $150,181
Less accrued organizational and offering costs (3) (341)
Less liability for deferred sales charge (4) (5,310)
________
Net assets $144,530
========
Units outstanding 15,170
ANALYSIS OF NET ASSETS
Cost to investors (5) $151,697
Less sales charge (5) (6,826)
Less estimated organizational and offering costs (3) (341)
________
Net assets $144,530
========
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $200,000 issued by The
Chase Manhattan Bank has been deposited with the Trustee as collateral,
which is sufficient to cover the monies necessary for the purchase of
the Equity Securities pursuant to contracts for the purchase of such
Equity Securities.
(3) A portion of the Public Offering Price on Units purchased prior to
the earlier of six months after the Initial Date of Deposit or the end
of the initial offering period consists of Equity Securities in an
amount sufficient to pay for all or a portion of the costs incurred in
establishing the Trust. These costs have been estimated at $.0225 per
Unit, based upon the expected number of Units of the Trust to be
created. A distribution will be made at the earlier of six months after
the Initial Date of Deposit or the end of the initial offering period to
an account maintained by the Trustee from which the organizational and
offering cost obligation of the investors to the Sponsor will be
satisfied. To the extent the number of Units of the Trust is larger or
smaller than the estimate, the actual distribution per Unit may differ
from that set forth above.
(4) Represents the amount of mandatory distributions from the Trust
($.35 per Unit), payable to the Sponsor in five equal monthly
installments beginning on March 19, 1999, and on the twentieth day of
each month thereafter (or if such date is not a business day, on the
preceding business day) through July 20, 1999. If Units are redeemed
prior to July 20, 1999, the remaining amount of the deferred sales
charge applicable to such Units will be payable at the time of redemption.
(5) The aggregate cost to investors includes a sales charge computed at
the rate of 4.5% of the Public Offering Price (equivalent to 4.545% of
the net amount invested, exclusive of the deferred sales charge),
assuming no reduction of sales charge as set forth under "Public
Offering-How is the Public Offering Price Determined?"
</FN>
</TABLE>
Page 31
Schedule of Investments
SEMICONDUCTOR GROWTH TRUST SERIES
FT 276
At the Opening of Business on the
Initial Date of Deposit-August 18, 1998
<TABLE>
<CAPTION>
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price Share to Trust (2)
_________ _______________________________________ ____________ ______ ____________
<S> <C> <C> <C> <C>
Semiconductors
______________
448 TDFX 3Dfx Interactive, Inc. 4% $13.125 $ 5,880
155 ALTR Altera Corporation 4% 38.563 5,977
258 ADI Analog Devices, Inc. 4% 23.313 6,015
239 AMCC Applied Micro Circuits Corporation 4% 25.313 6,050
276 BBRC Burr-Brown Corporation 4% 21.563 5,951
171 DS Dallas Semiconductor Corporation 4% 34.875 5,964
67 INTC Intel Corporation 4% 89.563 6,001
95 LLTC Linear Technology Corporation 4% 62.750 5,961
175 MXIM Maxim Integrated Products, Inc. 4% 34.875 6,103
167 MCRL Micrel, Incorporated 4% 36.141 6,036
217 MCHP Microchip Technology, Inc. 4% 28.000 6,076
355 NMGC NeoMagic Corporation 4% 16.563 5,880
161 PMCS PMC-Sierra, Inc. (3) 4% 37.375 6,017
94 QLGC QLogic Corporation 4% 62.875 5,910
332 SMOD SMART Modular Technologies, Inc. 4% 17.813 5,914
93 STM STMicroelectronics N.V. (3) 4% 64.625 6,010
99 TXN Texas Instruments, Inc. 4% 61.313 6,070
183 VTSS Vitesse Semiconductor Corporation 4% 32.625 5,970
Semiconductor Design Software
______________________________
216 CDN Cadence Design Systems, Inc. 4% 28.000 6,048
161 SNPS Synopsys, Inc. 4% 36.875 5,937
Semiconductor Equipment
_______________________
219 ASMLF ASM Lithography Holding N.V. (3) 4% 27.500 6,023
182 AMAT Applied Materials, Inc. 4% 33.313 6,063
314 CMOS Credence Systems Corporation 4% 19.000 5,966
202 KLAC KLA-Tencor Corporation 4% 31.125 6,287
153 NVLS Novellus Systems, Inc. 4% 39.688 6,072
______ _________
Total Investments 100% $150,181
====== =========
__________
<FN>
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
contracts to purchase Equity Securities were entered into by the Sponsor
on August 17, 1998.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the last sale prices of the listed
Equity Securities and the ask prices of the over-the-counter traded
Equity Securities on the business day preceding the Initial Date of
Deposit). The valuation of the Equity Securities has been determined by
the Evaluator, an affiliate of the Sponsor. The aggregate underlying
value of the Equity Securities on the Initial Date of Deposit was
$150,181. Cost and loss to Sponsor relating to the Equity Securities
sold to the Trust were $150,230 and $49, respectively.
(3) This Equity Security represents the common stock of a foreign company
which trades directly on a United States securities exchange.
</FN>
</TABLE>
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Page 35
CONTENTS:
Summary of Essential Information:
Semiconductor Growth Trust Series 4
FT 276:
What is the FT Series? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 8
Are Investments in the Trusts Eligible for
Retirement Plans? 12
Portfolio:
What are the Equity Securities? 12
Risk Factors 12
What are the Equity Securities Selected for the
Semiconductor Growth Trust Series? 14
What are Some Additional Considerations for
Investors? 16
Public Offering:
How is the Public Offering Price Determined? 17
How are Units Distributed? 20
What are the Sponsor's Profits? 21
Will There be a Secondary Market? 22
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 22
How are Income and Capital Distributed? 23
What Reports will Unit Holders Receive? 23
How May Units be Redeemed? 24
How May Units be Purchased by the Sponsor? 25
How May Equity Securities be Removed from the Trust? 26
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 26
Who is the Trustee? 27
Limitations on Liabilities of Sponsor and Trustee 27
Who is the Evaluator? 27
Other Information:
How May the Indenture be Amended or Terminated? 28
Legal Opinions 29
Experts 29
Report of Independent Auditors 30
Statement of Net Assets 31
Notes to Statement of Net Assets 31
Schedule of Investments 32
_____________
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.
FIRST TRUST (registered trademark)
Semiconductor Growth Trust Series
Nike Securities L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
24-Hour Pricing Line:
1-800-446-0132
August 18, 1998
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, FT 276, hereby identifies The First Trust
Special Situations Trust, Series 4 Great Lakes Growth and
Treasury Trust, Series 1; The First Trust Special Situations
Trust, Series 18 Wisconsin Growth and Treasury Securities Trust,
Series 1; The First Trust Special Situations Trust, Series 69
Target Equity Trust Value Ten Series; The First Trust Special
Situations Trust, Series 108; The First Trust Special Situations
Trust, Series 119 Target 5 Trust, Series 2 and Target 10 Trust,
Series 8; and The First Trust Special Situations Trust, Series
190 Biotechnology Growth Trust, Series 3 for purposes of the
representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 276, has duly caused this Amendment to
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on August 18, 1998.
FT 276
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of )
Nike Securities )
Corporation, the ) August 18, 1998
General Partner of )
Nike Securities L.P.)
)
)
David J. Allen Director of ) Robert M. Porcellino
Nike Securities ) Attorney-in-Fact**
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.,
Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated August 18, 1998 in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 333-59955) and related Prospectus of FT 276.
ERNST & YOUNG LLP
Chicago, Illinois
August 18, 1998
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 276 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
FT 276
TRUST AGREEMENT
Dated: August 18, 1998
The Trust Agreement among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P.,
as Evaluator and Portfolio Supervisor, sets forth certain
provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust
for The First Trust Special Situations Trust, Series 22 and
certain subsequent Series, Effective November 20, 1991" (herein
called the "Standard Terms and Conditions of Trust"), and such
provisions as are incorporated by reference constitute a single
instrument. All references herein to Articles and Sections are
to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR SEMICONDUCTOR GROWTH TRUST SERIES
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee as set forth in the Prospectus under "Summary of
Essential Information," calculated based on the largest number of
Units outstanding during each period in respect of which a
payment is made pursuant to Section 3.05, payable on a
Distribution Date. Such fee may exceed the actual cost of
providing such evaluation services for the Trust, but at no time
will the total amount received for evaluation services rendered
to unit investment trusts of which Nike Securities L.P. is the
sponsor in any calendar year exceed the aggregate cost to the
Evaluator of supplying such services in such year.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee as set forth in the Prospectus under "Summary of
Essential Information," calculated based on the largest number of
Units outstanding during the calendar year except during the
initial offering period as determined in Section 4.01 of this
Indenture, in which case the fee is calculated based on the
largest number of units outstanding during the period for which
the compensation is paid (such annual fee to be pro rated for any
calendar year in which the Trustee provides services during less
than the whole of such year). However, in no event, except as
may otherwise be provided in the Standard Terms and Conditions of
Trust, shall the Trustee receive compensation in any one year
from any Trust of less than $2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is August 18,
1998.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 24 shall include FT 276.
B. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
C. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank, or
any successor trustee appointed as hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank.
D. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
E. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
F. Section 1.01(29) shall be added to read as follows:
"(29) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.02 herein."
G. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, and/or (iii) cash (or a Letter of Credit in
lieu of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit.
H. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for any
Letter(s) of Credit deposited with the Trustee in connection with
the deposits described in Section 2.01(a) and (b) cash in an
amount sufficient to satisfy the obligations to which the
Letter(s) of Credit relates. Any substituted Letter(s) of Credit
shall be released by the Trustee."
I. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
J. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the earlier of six months
after the Initial Date of Deposit or the conclusion of the
primary offering period (as certified by the Depositor to
the Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust and sale of the Trust Units in an
amount certified to the Trustee by the Depositor. If the
cash balance of the Capital Account is insufficient to make
such withdrawal, the Trustee shall, as directed by the
Depositor, sell Securities identified by the Depositor, or
distribute to the Depositor Securities having a value, as
determined under Section 4.01 as of the date of
distribution, sufficient for such reimbursement. The
reimbursement provided for in this section shall be for the
account of the Unit holders of record at the earlier of six
months after the Initial Date of Deposit or the conclusion
of the primary offering period. Any assets deposited with
the Trustee in respect of the expenses reimbursable under
this Section 3.01 shall be held and administered as assets
of the Trust for all purposes hereunder. The Depositor
shall deliver to the Trustee any cash identified in the
Statement of Net Assets of the Trust included in the
Prospectus not later than the expiration of the Delivery
Period and the Depositors obligation to make such delivery
shall be secured by the letter of credit deposited pursuant
to Section 2.01. Any cash which the Depositor has
identified as to be used for reimbursement of expenses
pursuant to this Section 3.01 shall be held by the Trustee,
without interest, and reserved for such purpose and,
accordingly, prior to the earlier of six months after the
Initial Date of Deposit or the conclusion of the primary
offering period, shall not be subject to distribution or,
unless the Depositor otherwise directs, used for payment of
redemptions in excess of the per Unit amount payable
pursuant to the next sentence. If a Unit holder redeems
Units prior to the earlier of six months after the Initial
Date of Deposit or the conclusion of the primary offering
period, the Trustee shall pay to the Unit holder, in
addition to the Redemption Value of the tendered Units,
unless otherwise directed by the Depositor, an amount equal
to the estimated per Unit cost of organizing the Trust and
the sale of Trust Units set forth in the Prospectus, or such
revision thereof most recently communicated to the Trustee
by the Depositor pursuant to Section 5.01, multiplied by the
number of Units tendered for redemption; to the extent the
cash on hand in the Trust is insufficient for such payment,
the Trustee shall have the power to sell Securities in
accordance with Section 5.02. The Trustee, upon receipt of
notification and certification from the Depositor of the
amount of any reimbursable expenses relating to the sale of
Trust Units incurred by the Depositor subsequent to the
earlier of six months after the Initial Date of Deposit or
the conclusion of the primary offering period, shall
withdraw from the Capital Account as set forth above, and
pay to the Depositor such amount. As used herein, the
Depositor's reimbursable expenses of organizing the Trust
and sale of the Trust Units shall include the cost of the
initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses.
K. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
L. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) if provided
for in the Prospectus, the following reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
M. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
N. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
O. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Capital Account and pay to the Depositor the amount
that it is entitled to receive pursuant to Section 3.14.
P. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
Q. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not exceed
$0.0035 per Unit outstanding as of January 1 of such year
except for a Trust during the year or years in which an
initial offering period as determined in Section 4.01 of
this Indenture occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such
month (such annual fee to be pro rated for any calendar year
in which the Portfolio Supervisor provides services during
less than the whole of such year), but in no event shall
such compensation when combined with all compensation
received from other series of the Trust for providing such
supervisory services in any calendar year exceed the
aggregate cost to the Portfolio Supervisor for the cost of
providing such services."
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount as set forth in the Prospectus times the number
of Units outstanding as of January 1 of such year except for
a year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Depositor
provides service during less than the whole of such year),
but in no event shall such compensation when combined with
all compensation received from other unit investment trusts
for which the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services in
any calendar year exceed the aggregate cost to the Depositor
providing services to such unit investment trusts. Such
compensation may, from time to time, be adjusted provided
that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of an invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Income and Capital Accounts on or before
the Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have no
liability to any Certificateholder or other person for any
payment made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.14, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
S. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the
Redemption Price payable to such Unit holder an amount equal
to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus, on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02 less the unpaid portion of the
deferred sales charge. All advances made by the Trustee
pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unit holders."
T. Notwithstanding anything to the contrary in Sections
3.15 and 4.05 of the Standard Terms and Conditions of Trust, so
long as Nike Securities L.P. is acting as Depositor, the Trustee
shall have no power to remove the Portfolio Supervisor.
U. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organizational and offering costs, and (iv)" ; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
Prior to the payment to the Depositor of its
reimbursable organizational and offering costs to be
made at the earlier of six months after the Initial
Date of Deposit or the conclusion of the primary
offering period in accordance with Section 3.01, for
purposes of determining the Trust Fund Evaluation under
this Section 5.01, the Trustee shall rely upon the
amounts representing unpaid accrued organizational and
offering costs in the estimated amount per Unit set
forth in the Prospectus until such time as the
Depositor notifies the Trustee in writing of a revised
estimated amount per Unit representing unpaid accrued
organizational and offering costs. Upon receipt of
such notice, the Trustee shall use this revised
estimated amount per Unit representing unpaid accrued
organizational and offering costs in determining the
Trust Fund Evaluation but such revision of the
estimated expenses shall not effect calculations made
prior thereto and no adjustment shall be made in
respect thereof. Reimbursable offering costs incurred
by the Depositor subsequent to the earlier of six
months after the Initial Date of Deposit or the
conclusion of the primary offering period shall be
accounted for as paid by the Trustee.
V. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the
Prospectus, Unit holders may redeem 1,000 Units or more of a
Trust and request a distribution in kind of (i) such Unit
holder's pro rata portion of each of the Securities in such
Trust, in whole shares, and (ii) cash equal to such Unit
holder's pro rata portion of the Income and Capital Accounts
as follows: (x) a pro rata portion of the net proceeds of
sale of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Capital Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, if applicable, to the extent possible,
distributions of Securities pursuant to an in kind
redemption of Units shall be made by the Trustee through the
distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker-dealer at
the Depository Trust Company. Any distribution in kind will
be reduced by customary transfer and registration charges."
W. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value of
Securities deposited in such Trust during the initial
offering period, or (ii)"
X. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"The Trustee will honor duly executed requests for in-
kind distributions received (accompanied by the electing
Unit holder's Certificate, if issued) by the close of
business ten business days prior to the Mandatory
Termination Date."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and the respective corporate
seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first
above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Vice President
THE CHASE MANHATTAN BANK,
Trustee
By Rosalia A. Raviele
Vice President
[SEAL]
ATTEST:
Joan Currie
Assistant Treasurer
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 276
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
August 18, 1998
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: FT 276
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of FT 276 in connection with the
preparation, execution and delivery of a Trust Agreement dated
August 18, 1998 among Nike Securities L.P., as Depositor, The
Chase Manhattan Bank, as Trustee and First Trust Advisors L.P. as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-59955)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
August 18, 1998
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: FT 276
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of FT 276 (the "Fund"), in connection with the issuance of units
of fractional undivided interest in the Trust of said Fund (the
"Trust"), under a Trust Agreement, dated August 18, 1998 (the
"Indenture"), among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, as Trustee, and First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds Equity Securities as such term is defined in the
Prospectus. For purposes of the following discussion and
opinion, it is assumed that each Equity Security is equity for
Federal income tax purposes.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing United States Federal income tax
law:
I. 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 Internal Revenue Code of 1986 (the
"Code") in the proportion that the number of Units held by him
bears to the total number of Units outstanding; under Subpart E,
Subchapter J of Chapter 1 of the Code, income of the Trust will
be treated as income of the Unit holders in the proportion
described above; and an item of Trust income will have the same
character in the hands of a Unit holder as it would have in the
hands of the Trustee. Each Unit holder will be considered to
have received his pro rata share of income derived from each
Trust asset when such income is considered to be received by the
Trust.
II. The price a Unit holder pays for his Units, generally
including sales charges, is allocated among his pro rata portion
of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the valuation date closest to the
date the Unit holder purchases his Units) in order to determine
his tax basis for his pro rata portion of each Equity Security
held by the Trust. For Federal income tax purposes, a Unit
holder's pro rata portion of distributions of cash or property by
a corporation with respect to an Equity Security ("dividends" as
defined by Section 316 of the Code) is taxable as ordinary income
to the extent of such corporation's current and accumulated
"earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Equity Security which exceeds such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such
Equity Security, shall be treated as gain from the sale or
exchange of property.
III. Gain or loss will be recognized to a Unit holder
(subject to various nonrecognition provisions under the Code)
upon redemption or sale of his Units, except to the extent an in
kind distribution of stock is received by such Unit holder from
the Trust as discussed below. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of his Units. Before adjustment, such basis would
normally be cost if the Unit holder had acquired his Units by
purchase. Such basis will be reduced, but not below zero, by the
Unit holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
IV. If the Trustee disposes of a Trust asset (whether by
sale, exchange, liquidation, redemption, payment on maturity or
otherwise) gain or loss will be recognized to the Unit holder
(subject to various nonrecognition provisions under the Code) and
the amount thereof will be measured by comparing the Unit
holder's aliquot share of the total proceeds from the transaction
with his basis for his fractional interest in the asset disposed
of. Such basis is ascertained by apportioning the tax basis for
his Units (as of the date on which his Units were acquired) among
each of the Trust assets (as of the date on which his Units were
acquired) ratably according to their values as of the valuation
date nearest the date on which he purchased such Units. A Unit
holder's basis in his Units and of his fractional interest in
each Trust asset must be reduced, but not below zero, by the Unit
holder's pro rata portion of dividends with respect to each
Equity Security which is not taxable as ordinary income.
V. Under the Indenture, under certain circumstances, a
Unit holder tendering Units for redemption may request an in kind
distribution of Equity Securities upon the redemption of Units or
upon the termination of the Trust. As previously discussed,
prior to the redemption of Units or the termination of the Trust,
a Unit holder is considered as owning a pro rata portion of each
of the Trust's assets. The receipt of an in kind distribution
will result in a Unit holder receiving an undivided interest in
whole shares of stock and possibly cash. The potential federal
income tax consequences which may occur under an in kind
distribution with respect to each Equity Security owned by the
Trust will depend upon whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this
purpose is a particular class of stock issued by a particular
corporation. A Unit holder will not recognize gain or loss if a
Unit holder only receives Equity Securities in exchange for his
or her pro rata portion of the Equity Securities held by the
Trust. However, if a Unit holder also receives cash in exchange
for a fractional share of an Equity Security held by the Trust,
such Unit holder will generally recognize gain or loss based upon
the difference between the amount of cash received by the Unit
holder and his tax basis in such fractional share of an Equity
Security held by the Trust. The total amount of taxable gains
(or losses) recognized upon such redemption will generally equal
the sum of the gain (or loss) recognized under the rules
described above by the redeeming Unit holder with respect to each
Equity Security owned by the Trust.
A domestic corporation owning Units in the Trust may be
eligible for the 70% dividends received deduction pursuant to
Section 243(a) of the Code with respect to such Unit holders' 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), subject to
the limitations imposed by Sections 246 and 246A of the Code.
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.
Section 67 of the Code provides that certain miscellaneous
itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individual's adjusted gross income. Unit holders may be
required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
A Unit holder will recognize taxable gain (or loss)when all
or part of the pro rata interest in an Equity Security is either
sold by the Trust or redeemed or when a Unit holder disposes of
his Units in a taxable transaction, in each case for an amount
greater (or less) than his tax basis therefor; subject to various
nonrecognition provisions of the Code.
It should be noted that payments to the Trust of dividends
on Equity Securities that are attributable to foreign corporation
may be subject to foreign withholding taxes and Unit holders
should consult their tax advisers regarding the potential tax
consequences relating to the payment of any such withholding
taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated a income to the Unit holders.
Because under the grantor trust rules, an investor is deemed to
have paid directly his share of foreign taxes that have been paid
or accrued, if any, an investor may be entitled to a foreign tax
credit or deduction for United States tax purposes with respect
to such taxes. The Taxpayer Relief Act of 1997 imposes a
required holding period for such credits.
Any gain or loss recognized on a sale or exchange will,
under current law, generally be capital gain or loss.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including foreign, state or local taxes or collateral tax
consequences with respect to the purchase, ownership and
disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-59955)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
August 18, 1998
The Chase Manhattan Bank, as Trustee of
FT 276
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 276
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts contained in
FT 276 (each, a "Trust"), which will be established under certain
Standard Terms and Conditions of Trust dated November 20, 1991,
and a related Trust Agreement dated as of today (collectively,
the "Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"), First Trust Advisors L.P., as Evaluator, First
Trust Advisors L.P., as Portfolio Supervisor, and The Chase
Manhattan Bank, as Trustee (the "Trustee"). Pursuant to the
terms of the Indenture, units of fractional undivided interest in
the Trust (the "Units") will be issued in the aggregate number
set forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that the
Trust will not constitute an association taxable as a corporation
under New York law, and accordingly will not be subject to the
New York State franchise tax or the New York City general
corporation tax.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-59955) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit-holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
August 18, 1998
The Chase Manhattan Bank, as Trustee of
FT 276
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Thomas Porrazzo
Vice President
Re: FT 276
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference certain Standard Terms
and Conditions of Trust dated November 20, 1991, and the same are
collectively referred to herein as the "Indenture") among Nike
Securities L.P., as Depositor (the "Depositor"), First Trust
Advisors L.P., as Evaluator, First Trust Advisors L.P., as
Portfolio Supervisor, and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in FT
276 (each, a "Trust"), and the confirmation by Chase, as Trustee
under the Indenture, that it has registered on the registration
books of the Trust the ownership by the Depositor of a number of
units constituting the entire interest in the Trust (such
aggregate units being herein called "Units"), each of which
represents an undivided interest in the respective Trust which
consists of common stocks (including, confirmations of contracts
for the purchase of certain stocks not delivered and cash, cash
equivalents or an irrevocable letter of credit or a combination
thereof, in the amount required for such purchase upon the
receipt of such stocks), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued hereunder (the "Certificates"), the
Closing Memorandum dated today's date, and such other documents
as we have deemed necessary in order to render this opinion.
Based on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing corporation
having the powers of a Trust Company under the laws of the State
of New York.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has registered on the registration
books of the Trust the ownership of the Units by the Depositor.
Upon receipt of confirmation of the effectiveness of the
registration statement for the sale of the Units filed with the
Securities and Exchange Commission under the Securities Act of
1933, the Trustee may deliver Certificates for such Units, in
such names and denominations as the Depositor may request, to or
upon the order of the Depositor as provided in the Closing
Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and be reimbursed,
without interest, for any such advances from funds in the
interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
1001 Warrenville Road
Lisle, Illinois 60532
August 18, 1998
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: FT 276
Gentlemen:
We have examined the Registration Statement File No.
333-59955 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Senior Vice President
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<LEGEND> This schedule contains summary financial information extracted
from Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
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