SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1 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 286
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER
Attention: Eric F. Fess
111 West Monroe Street
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 the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBEJCT TO COMPLETION, DATED SEPTEMBER 14,1998
AS AMENDED FEBRUARY 5, 1999
Texas Portfolio Series
FT 286
FT 286 consists of a unit investment trust known as Texas Portfolio
Series (the "Trust"). The Trust consists of a diversified portfolio of
common stocks (the "Securities") issued by companies headquartered and
incorporated in the State of Texas. The Trust seeks to provide above-
average total return through capital appreciation.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
First Trust(registered trademark)
1-800-621-1675
The date of this Prospectus is ____________, 1999
Page 1
TABLE OF CONTENTS
Page Number
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 8
Portfolio 9
Risk Factors 12
Portfolio Securities Descriptions 12
Public Offering 13
Distribution of Units 15
The Sponsor's Profits 16
The Secondary Market 16
How We Purchase Units 17
Expenses and Charges 17
Tax Status 18
Retirement Plans 19
Rights of Unit Holders 19
Income and Capital Distribution 20
Redeeming Your Units 21
Removing Securities from the Trust 23
Amending or Terminating the Indenture 24
Information on the Sponsor, Trustee and Evaluator 25
Other Information 26
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- ____________, 1999
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)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (2) $
Aggregate Offering Price Evaluation of Securities per Unit $
Maximum Sales Charge % of the Public Offering Price
per Unit (__% of the net amount invested, exclusive of
the deferred sales charge) (3) $
Less Deferred Sales Charge per Unit $ ( )
Public Offering Price per Unit (3) $
Sponsor's Initial Repurchase Price per Unit (4) $
Redemption Price per Unit (based on aggregate underlying
value of Securities less the deferred sales charge) (4) $
Estimated Net Annual Distributions (5) $
Cash CUSIP Number
Reinvestment CUSIP Number
Security Code
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date ____________, 1999
Mandatory Termination Date
Discretionary Liquidation Amount The Trust may be terminated if the value of the Securities is less than the
lower of $2,000,000 or 20% of the total value of Securities deposited in
the Trust during the initial offering period.
Income Distribution Record Date ____________, 1999.
Income Distribution Date (6) ____________, 1999.
______________
<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 Security is valued at the last closing sale price, or if
no such price exists or if the Security is not so listed, at the closing
ask price thereof. 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 (the "Evaluation Time").
(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 the Income Account. The Public Offering Price
as shown reflects the value of the Securities on the business day prior
to the Initial Date of Deposit and establishes the original
proportionate relationship among the individual Securities. No sales to
investors will be executed at this price. Additional Securities may 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
"Redeeming Your Units."
(5) The actual net annual distributions you receive will vary from that
set forth above with changes in the Trust's fees and expenses, in
dividends received and with the sale of Securities. See "Fee Table" and
"Expenses and Charges."
(6) 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 3
FEE TABLE
This Fee Table describes the fees and expenses that you may pay if you
buy and hold Units of the Trust. See "Public Offering" and "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
shows you a comparison of fees.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit Holder Transaction Expenses
(as a percentage of public offering price)
Initial sales charge imposed on purchase %(a) $
Deferred sales charge %(b)
________ ________
% $
======== ========
Maximum sales charge imposed on Reinvested Dividends %(d) $
Organizational and Offering Costs
(as a percentage of public offering price)
Estimated Organizational and Offering Costs %(d) $
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee and other operating expenses %
________ ________
Total % $
======== ========
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and sell all your Units at the end of those periods. The example
also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. Although your actual costs may
vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years
______ _______ _______
You will pay the following expenses if you do not sell your Units at the
end of each period:
1 Year 3 Years 5 Years
______ _______ _______
The example does not reflect sales charges on reinvested dividends and
other distributions. If these sales charges were included, your costs
would be higher.
________________
<FN>
(a) The initial sales charge would exceed 1.00% if the Public Offering
Price exceeds $10.00 per Unit.
(b) The actual fee is $ per Unit per month, irrespective of purchase
or redemption price deducted monthly commencing ____________, 1999
through ____________, 1999. If the Unit price exceeds $10.00 per Unit,
the deferred sales charge will be less than ___%. If the Unit price is
less than $10.00 per Unit, the deferred sales charge will exceed __%.
Units purchased subsequent to the initial deferred sales charge payment
will be subject to the initial sales charge and to the remaining
deferred sales charge payments.
(c)Reinvested Dividends will be subject only to the deferred sales
charge remaining at the time of reinvestment. See "Income and Capital
Distribution."
(d)You 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). 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>
Page 4
Report of Independent Auditors
The Sponsor, Nike Securities L.P., and Unit Holders
FT 286
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 286, comprised of Texas Portfolio Series,
as of the opening of business on ____________, 1999. 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 ____________,
1999. 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 286,
comprised of the Trust listed above, at the opening of business on
____________, 1999 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
____________, 1999
Page 5
Statement of Net Assets
TEXAS PORTFOLIO SERIES
FT 286
At the Opening of Business on the
Initial Date of Deposit-____________, 1999
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $
Less accrued organizational and offering costs (3)
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
ANALYSIS OF NET ASSETS
Cost to investors (5) $
Less sales charge (5) ( )
Less estimated organizational and offering costs (3)
________
Net assets $
========
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $__________ issued by The
Chase Manhattan Bank, has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Securities
according to purchase contracts for such Securities.
(3) A portion of the Public Offering Price consists of 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 $ per Unit,
based upon the expected number of Units 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 your organizational and offering
cost obligation to us will be paid. To the extent the number of Units
issued is larger or smaller than the estimate, the actual distribution
per Unit at the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period may differ from that set forth
above.
(4) Represents the amount of mandatory distributions from the Trust
($___ per Unit), payable to us in ______ equal monthly installments
beginning on ____________, 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 ____________, 1999. If you redeem Units before
____________, 1999 you will have to pay the remaining amount of the
deferred sales charge applicable to such Units when you redeem them.
(5) The aggregate cost to investors in the Trust includes a maximum
total sales charge computed at the rate of % of the Public Offering
Price (equivalent to __% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of sales charge as set
forth under "Public Offering."
</FN>
</TABLE>
Page 6
Schedule of Investments
TEXAS PORTFOLIO SERIES
FT 286
At the Opening of Business on the
Initial Date of Deposit-____________, 1999
<TABLE>
<CAPTION>
Approximate
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Securities (1) Price (3) Share to Trust (2)
_________ ________________________________ ____________ ______ _____________
<S> <C> <C> <C> <C>
AMR AMR Corporation $ $
AGC American General Corporation
AFS Associates First Capital Corporation
BMCS BMC Software, Inc.
BNI Burlington Northern Santa Fe Corporation
CCU Clear Channel Communications, Inc.
CPQ Compaq Computer Corporation
CFR Cullen/Frost Bankers, Inc.
DS Dallas Semiconductor Corporation
DELL Dell Computer Corporation
DO Diamond Offshore Drilling, Inc.
ESV ENSCO International Incorporated
EDS Electronic Data Systems Corporation
ENE Enron Corporation
XON Exxon Corporation
DHI D.R. Horton, Inc.
KMB Kimberly-Clark Corporation
FLC R&B Falcon Corporation
SBC SBC Communications, Inc.
SYY SYSCO Corporation
SRV Service Corporation International
LUV Southwest Airlines Co.
SE Sterling Commerce, Inc.
SZA Suiza Foods Corporation
TXN Texas Instruments, Incorporated
______ _________
Total Investments 100% $
====== =========
__________
<FN>
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. The contracts to purchase
Securities were entered into by the Sponsor on ____________, 1999.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the last sale prices of the listed Securities and the ask
prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Securities on the Initial Date of
Deposit was $ . Cost and loss to Sponsor relating to the Securities sold
to the Trust were $_______ and $___________, respectively.
(3) The portfolio may contain additional Securities each of which will
not exceed approximately __% of the Aggregate Offering Price. Although it
is not the Sponsor's intention, certain of the Securities listed above
may not be included in the final portfolio. Also, the percentages of the
Aggregate Offering Price for the Securities are approximate amounts and
may vary in the final portfolio.
</FN>
</TABLE>
Page 7
The FT Series
The FT Series Defined.
We, Nike Securities L.P. (the "Sponsor"), have created several similar
yet separate series of an investment company which we have named the FT
Series. We designate each of these investment company series, the FT
Series, with a different series number.
YOU MAY GET MORE SPECIFIC DETAILS ON SOME OF THE INFORMATION IN THIS
PROSPECTUS IN AN "INFORMATION SUPPLEMENT" BY CALLING THE TRUSTEE AT 1-
800-682-7520.
What We Call the Trust.
This FT Series consists of a unit investment trust known as Texas
Portfolio Series.
Mandatory Termination Date.
The Trust will terminate on the Mandatory Termination Date,
approximately five years from the date of this Prospectus. This date is
shown in "Summary of Essential Information." The Trust was created under
the laws of the State of New York by a Trust Agreement (the "Indenture")
dated the Initial Date of Deposit. This agreement, entered into between
Nike Securities L.P., as Sponsor, The Chase Manhattan Bank as Trustee
and First Trust Advisors L.P. as Portfolio Supervisor and Evaluator,
governs the operation of the Trust.
How We Created the Trust.
On the Initial Date of Deposit, we deposited contracts to buy common
stocks ("Securities") (fully backed by an irrevocable letter of credit
of a financial institution) with the Trustee. In return for depositing
the Securities, the Trustee delivered documents to us representing our
ownership of the Trust, in the form of units ("the Units").
With the deposit of the contracts to buy Securities on the Initial Date
of Deposit we established a percentage relationship between the
Securities in the Trust's portfolio, as stated under "Schedule of
Investments." After the Initial Date of Deposit, we may deposit
additional Securities in the Trust, or cash (including a letter of
credit) with instructions to buy more Securities, in order to create new
Units for sale. If we create additional Units we will attempt, to the
extent practicable, to maintain the original percentage relationship
established among the Securities on the Initial Date of Deposit, and not
the actual percentage relationship existing on the day we are creating
Units, since the two may differ. This difference may be due to the sale,
redemption or liquidation of any of the Securities deposited in the
Trust on the Initial, or any subsequent, Date of Deposit.
Since the prices of the underlying Securities will fluctuate daily, the
ratio of Securities in the Trust, on a market value basis, will also
change daily. The portion of Securities represented by each Unit will
not change as a result of the deposit of additional Securities or cash
in the Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trust will pay brokerage fees to buy
Securities. To reduce this dilution, the Trust will try to buy the
Securities as close to the evaluation time and as close to the
evaluation price as possible.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may, from time to time, retain and pay us (or an affiliate) to
act as agent for the Trust to buy Securities. If we or an affiliate of
ours act as agent to the Trust we will be subject to the restrictions
under the Investment Company Act of 1940, as amended.
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities may be sold under certain
circumstances periodically, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. The Trust will not, however, sell Securities to take
advantage of market fluctuations or changes in anticipated rates of
Page 8
appreciation or depreciation, or if the Securities no longer meet the
criteria by which they were selected. You will not be able to dispose of
any of the Securities in the Trust or vote the Securities. As the holder
of the Securities, the Trustee will vote all of Securities and will do
so based on our instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities") we will refund
to you that portion of the purchase price and sales charge resulting
from the failed contract on the next Income Distribution Date. Any
Replacement Security the Trust acquires will be identical to those from
the failed contract. The Trustee must purchase the Replacement
Securities within 20 days after it receives notice of a failed contract,
and the purchase price may not be more than the amount of funds reserved
for the purchase of the failed contract.
Portfolio
Objectives
The Trust's objective is to provide investors with the potential for
above-average capital appreciation through an investment in a
diversified portfolio of common stocks of companies that are
headquartered or incorporated in the State of Texas. The Trust has an
expected life of approximately five years. A diversified portfolio helps
to offset the risks normally associated with such an investment,
although it does not eliminate them entirely.
One investment principle that some industry experts believe can improve
an investor's likelihood of success is to "invest in what you know."
Texas is home to some of the nation's most well-known companies
including Exxon, Kimberly-Clark, Compaq and Dell. These companies, along
with others included in the Texas Portfolio Series, represent the great
diversity the State of Texas offers. The Texas Portfolio Series seeks to
provide above-average capital appreciation by investing in these leading
companies.
The following factors support our positive outlook for Texas-based
companies:
7% of the U.S. population resides in the State of Texas, making it the
second most populous state in the United States.
The recent influx of high-tech companies has helped Texas increase its
electronics exports by more than 100% since 1993.
With higher exports come more jobs. Since 1993, Texas has created over 1
million new jobs, more than any other state.
Texas has one of the world's largest economies, comparable in size to
the economy of Spain.
Texas is a vital transportation center offering four hub airports, more
than any other state.
The portfolio employs a disciplined "buy and hold" philosophy, placing a
strong emphasis on the future prospects of the companies rather than
focusing on short-term performance. The portfolio is diversified by
investing in several industries including computers and software,
communications, transportation, financial services and energy. To help
reduce high risk, the portfolio avoids small market capitalization
stocks, newly-issued stocks and stocks with little or no earnings.
An investment in this Trust should be made with the understanding that
companies in the State of Texas, as in any state, are subject to and may
be affected by various factors, including the general state of the
economy, legislative changes and consumer spending trends.
Of course, as with any similar investments, there can be no guarantee
that the objective of the Trust will be achieved. See "Risk Factors" for
a discussion of the risks of investing in the Trust.
Page 9
Risk Factors
Price Volatility. The Trust invests in common stocks of companies that
are headquartered or incorporated in the State of Texas or have a strong
presence in Texas. The value of the Trust's Units will fluctuate with
changes in the value of these common stocks. Common stock prices
fluctuate for several reasons including changes in investors perceptions
of the financial condition of an issuer or the general condition of the
relevant stock market, or when political or economic events affecting
the issuers occur.
Because the Trust is not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of the Trust will be positive over any period of time or
that the value of your Units will be worth more than the price you
originally paid. Units of the Trust are not deposits of any bank and
are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Certain of the Securities in the Trust are issued by companies with
market capitalizations of less than $1 billion. The share prices of
these small-cap companies are often more volatile than those of larger
companies. This is a result of several factors common to many such
issuers, including limited trading volumes, products or financial
resources, management inexperience and less publicly available
information.
Dividends. There is no guarantee that the issuers of the Securities will
declare dividends in the future or that if declared they will either
remain at current levels or increase over time.
Technology Industry. The Trust is considered to be concentrated in
common stock of technology companies. Technology companies are generally
subject to the risks of rapidly changing technologies, rapid product
obsolescence, fierce competition, the loss of patent, copyright and
trademark protections, cyclical market patterns, evolving industry
standards and frequent new product introductions. In addition,
technology company stocks can experience extreme price and volume
fluctuations that are often unrelated to the operating performance of
such companies. The success of these companies depends in substantial
part on the timely and successful introduction of new products or
services and there is no guarantee that the technology companies
selected for the Trust will be able to respond in a timely manner to
compete in this rapidly developing and competitive marketplace.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed in the United States and abroad which may have
a negative impact on technology companies. In addition, litigation
regarding any of the issuers of the Securities or their respective
industries may negatively impact the share prices of these Securities.
We cannot predict what impact any pending or proposed legislation or
pending or threatened litigation will have on the share prices of the
Securities.
Year 2000 Problem. Many computer systems were not designed to 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." We do not expect that any of the computer system changes
necessary to prepare for January 1, 2000 will cause any major
operational difficulties for the Trust. However, we are unable to
predict what impact the Year 2000 Problem will have on any of the
issuers of the Securities.
Portfolio Securities Descriptions
AMR Corporation
American General Corporation
Associates First Capital Corporation
BMC Software, Inc.
Burlington Northern Santa Fe Corporation
Page 10
Clear Channel Communications, Inc.
Compaq Computer Corporation
Cullen/Frost Bankers, Inc.
Dallas Semiconductor Corporation
Dell Computer Corporation
Diamond Offshore Drilling, Inc.
ENSCO International Incorporated
Electronic Data Systems Corporation
Enron Corporation
Exxon Corporation
D.R. Horton, Inc.
Kimberly-Clark Corporation
R&B Falcon Corporation
SBC Communications, Inc.
SYSCO Corporation
Service Corporation International
Southwest Airlines Co.
Sterling Commerce, Inc.
Suiza Foods Corporation
Texas Instruments, Incorporated
We have obtained the foregoing descriptions from sources we deem
reliable. We have not independently verified the provided information
either in terms of accuracy or completeness.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price. The Public Offering
Price per Unit is comprised of the following:
- - the aggregate underlying value of the Securities;
- - the amount of any cash in the Income and Capital Accounts; and
- - the total sales charge (which combines an initial up-front sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
A portion of the Public Offering Price per Unit during the initial
offering period consists of 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.
Although you are not required to pay for your Units until three business
days following the order for purchase (the "date of settlement"), you
may pay before then. You will become the owner of Units on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of
Units ($500 if you are purchasing Units for your Individual Retirement
Account or any other qualified retirement plan).
Sales Charges.
The sales charge you will pay has both an initial and deferred
component. The initial sales charge, which you will pay at the time of
purchase, is equal to approximately 1% of the Public Offering Price of a
Unit. This initial sales charge is actually equal to the difference
between the maximum total sales charge of % and the maximum remaining
deferred sales charge (initially $____ per Unit). The initial sales
charge will vary from 1% with changes in the aggregate underlying value
of the Securities, changes in the Income and Capital Accounts and as
Page 11
deferred sales charge payments are made. In addition, ______ monthly
deferred sales charge payments of $ per Unit will be deducted from
the Trust's assets on approximately the twentieth day of each month from
____________, 1999 through ____________, 1999. The total maximum sales
charge assessed during the initial offering period will be % of the
Public Offering Price per Unit (equivalent to __% of the net amount
invested, exclusive of the deferred sales charge).
After the initial offering period, if you purchase Units after the last
deferred sales charge payment has been assessed, your sales charge will
consist of a one-time initial sales charge of % of the Public
Offering Price (equivalent to __% of the net amount invested), which
will be reduced by 1/2 of 1% on each subsequent ____________, commencing
____________, 1999 to a minimum sales charge of ___%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for a "wrap
fee account" as described below), the maximum sales charge is reduced,
as follows:
Your maximum
If you invest sales charge
(in thousands):* will be:
_______________ _____________
$ 50 but less than $100 %
$100 but less than $150 %
$150 but less than $500 %
$500 or more %
*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.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from the any one
dealer. However, we will consider Units you purchase in the name of your
spouse or your child under 21 years of age to be purchases by you for
determining the reduced sales charge. The reduced sales charges will
also apply to a trustee or other fiduciary purchasing Units for a single
trust estate or single fiduciary account. You must inform your dealer of
any combined purchases before the sale in order to be eligible for the
reduced sales charge. Any reduced sales is the responsibility of the
broker/dealer or other selling agent making the sale.
If you own units of any other unit investment trusts sponsored by us you
may use your redemption or termination proceeds from these trusts to
purchase Units of the Trust subject only to any remaining deferred sales
charge to be collected on Units of the Trust you purchase. Please note
that you will be charged the amount of any remaining deferred sales
charge on units you redeem when you redeem them.
For the following persons, the sales charge is reduced by ____% of the
Public Offering Price:
- - Employees, officers and directors of the Sponsor, our related
companies, the Underwriter, dealers and their affiliates, and vendors
providing services to us.
- - Immediate family members of the above (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).
If you purchase Units through registered broker/dealers who charge
periodic fees for financial planning, investment advisory or asset
management services or provide these services as part of an investment
account where a comprehensive "wrap fee" charge is imposed, you may
purchase Units in the primary or secondary market at the Public Offering
Price, less the concession we would typically allow such broker/dealer.
See "Distribution of Units-Dealer Concessions."
Every investor will be charged the deferred sales charge per Unit
regardless of any discounts. However, if you are eligible to receive a
discount such that the maximum sales charge you must pay is less than
Page 12
the applicable maximum deferred sales charge, you will be credited the
difference between your maximum sales charge and the maximum deferred
sales charge at the time you buy your Units.
The Value of the Securities.
The aggregate underlying value of the Securities in the Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). However, if there is no closing sale price on that exchange
or system, they are valued based on the closing ask prices. If the
Securities are not so listed, or, if so listed and the principal market
for them is other than on that exchange or system, the evaluation will
generally be based on the current ask prices on the over-the-counter
market (unless it is determined that these prices are not appropriate 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 Securities on the ask side of the
market, or
c) by any combination of the above.
The Evaluator on each business day will appraise the value of the
Securities in the Trust as of the Evaluation Time and will adjust the
Public Offering Price of the Units according to this valuation. This
Public Offering Price will be effective for all orders received before
the Evaluation Time on each such day. If we or the Trustee receive
orders for purchases, sales or redemptions after that time, or on a day
which is not a business day, they will be held until the next
determination of price. The term "business day" as used in this
Prospectus will exclude Saturdays, Sundays and the following holidays as
observed by the NYSE, Inc.: New Year's Day, Martin Luther King, Jr.'s
Birthday, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas Day.
After the initial offering period is over, the secondary market Public
Offering Price will be determined based on the aggregate underlying U.S.
dollar value of the Securities in the Trust, plus or minus cash, if any,
in the Income and Capital Accounts of the Trust plus the applicable
sales charge. We calculate the aggregate underlying value of the
Securities during the secondary market the same way as described above
for sales made during the initial offering period, except that bid
prices are used instead of ask prices when necessary.
Distribution of Units
During the initial offering period, Units will be sold at the current
Public Offering Price. When the initial offering period ends, Units we
have reacquired may be offered by this prospectus at the secondary
market Public Offering Price (see "The Secondary Market").
Dealer Concessions.
We intend to qualify Units of the Trust for sale in a number of states.
Dealers and other selling agents can purchase Units at prices which
represent a concession or agency commission of ___% of the Public
Offering Price per Unit (or 65% of the maximum sales charge after ____ ,
1999).
We reserve the right to change the amount of concessions or agency
commissions from time to time. If we reacquire, or the Trustee redeems,
Units from brokers, dealers and others while a market is being
maintained for such Units, such entities agree to repay any concession
or agency commission related to the reacquired Units. 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 kept by or given to the banks in the amounts shown
above. Under the Glass-Steagall Act, banks are prohibited from
underwriting Trust Units. However, the Glass-Steagall Act does allow
certain agency transactions and these appear to be permitted under the
Page 13
Act. In Texas and in certain other states, any banks making Units
available must be registered as broker/dealers under state law.
Award Programs.
From time to time we may sponsor programs which award a dealer's
registered representatives who have sold a minimum number of Units
during a specified time period. We may also pay fees to qualifying
dealers for services or activities which are meant to result in sales of
Units of the Trust. In addition, if a dealer sponsors sales contests or
recognition programs that conform to criteria we establish, or
participates in sales programs we sponsor, we will reallow to that
dealer an amount equal to no more than the total applicable sales
charges on the sales generated by such person at the Public Offering
Price during such programs. We make these payments out of our own
assets, and not out of the Trust's assets. These programs will not
change the price you pay for your Units or the amount that the Trust
will receive from the Units sold.
Investment Comparisons.
From time to time we may compare the then current estimated returns of
the Trust (which may show performance net of the expenses and charges
the Trust would have incurred) and returns over specified periods of
other similar trusts we sponsor in our advertising and sales materials,
with (1) returns on other taxable investments such as the common stocks
comprising the DJIA, S&P 500 Index, Ibbotson Small-Cap Index, the S&P
Industrial Index, other investment indices, corporate or U.S. Government
bonds, bank CDs and money market accounts or money market funds, (2)
performance data from Morningstar Publications, Inc. or (3) information
from publishers such as Money, the New York Times, U.S. News and World
Report, Business Week, Forbes or Fortune. The investment characteristics
of the Trust, which are described more fully elsewhere in this
Prospectus, differ from other comparative investments.You should not
assume that these performance comparisons will be representative of the
Trust's future relative performance.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit for the Trust less any reduced sales charge as stated in
"Public Offering." Also, any difference between our cost to purchase the
Securities and the price we sell them to the Trust (which is based on
the Evaluator's determination of the aggregate underlying U.S. dollar
value of the Securities) is considered a profit or loss. (See Note 2 of
"Schedule of Investments.") During the initial offering period, the
Underwriter may also realize profits or sustain losses as a result of
fluctuations after the Date of Deposit in the Public Offering Price
received by the Underwriter when they sell the Units.
In maintaining a market for the Units, any difference between the price
at which Units are purchased and the price at which they are sold (which
includes a maximum sales charge for the Trust) or redeemed will be a
profit or loss to us. The secondary market Public Offering Price of
Units may be more or less than the cost of those Units to us.
The Secondary Market
Although we are not obligated to, we intend to maintain a market for the
Units after the initial offering period and continuously offer to
purchase Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES
BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell Units
Page 14
subject to a deferred sales charge or tender them for redemption before
you have paid the total deferred sales charge on your Units, you will
have to pay the remainder of the deferred sales charge at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid at that time is equal to or greater than the Redemption Price per
Unit, we may purchase the Units. You will receive the proceeds from the
sale of Units we purchase no later than if they were redeemed by the
Trustee. Units that we hold may be tendered to the Trustee for
redemption as any other Units. If we elect not to purchase Units, the
Trustee may sell Units tendered for redemption in the over-the-counter
market, if any. However, the amount you will receive is the same as you
would have received on redemption of the Units.
The Public Offering Price of any Units we acquire will be consistent
with the Public Offering Price described in the then effective
prospectus. Any profit or loss from the resale or redemption of such
Units will belong to us.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the Trust will absorb the
excess. The Trustee will pay expenses of the Trust from the Income
Account of the Trust if funds are available, and then from the Capital
Account. The Income and Capital Accounts are noninterest-bearing to Unit
holders, so the Trustee benefits from the use of these funds.
As Sponsor, we will be compensated for providing bookkeeping and other
administrative services to the Trust, and will receive brokerage fees
when the Trust uses us (or an affiliate of ours) as agent in buying or
selling Securities. First Trust Advisors L.P., an affiliate of ours,
acts as both Portfolio Supervisor and Evaluator to the Trust and will
receive the fees set forth under "Fee Table" for providing portfolio
supervisory and evaluation services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor may purchase research
services from a number of sources, which may include underwriters or
dealers of the Trust.
The fees payable to the Portfolio Supervisor, Evaluator and Trustee are
based on the largest aggregate number of Units of the Trust outstanding
at any time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to the Sponsor and
our affiliate for providing services to all unit investment trusts for
which they provide such services be more than the actual cost of
providing such services in such year.
The Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to
its responsibilities under the Indenture;
- - The expenses and costs incurred by the Trustee to protect the Trust
and the rights and interests of the Unit holders;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, 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;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust;
- - Foreign custodial and transaction fees, if any;
Page 15
- - All taxes and other government charges imposed upon the Securities or
any part of the Trust. (No such taxes or charges are now in place or
planned as far as we know.)
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 has the power to sell Securities in the Trust to make cash
available to pay these charges if there is not enough cash in the Income
or Capital Accounts of the Trust. Since the Securities are all common
stocks and dividend income is unpredictable, we cannot guarantee that
dividends will be sufficient to meet any or all expenses of the Trust.
These sales may result in capital gains or losses to the Unit holders.
See "Tax Status."
The Trust will be audited on an annual basis. So long as we are making a
secondary market for Units, we will bear the cost of these annual audits
to the extent the cost exceeds $0.0050 per Unit. Otherwise, the Trust
will pay for the audit. You can receive a copy of the audited financial
statements by notifying the Trustee.
Tax Status
The following summary describes certain Federal income tax consequences
of the purchase, ownership and disposition of Units. This summary
assumes you hold Units as "capital assets" and are not a dealer,
financial institution or other investor with special circumstances. You
should consult with your tax advisor for specific information concerning
the Federal tax status of your investment.
In the opinion of our counsel, under existing law:
General Treatment of the Trust
The Trust will not be taxed as a corporation for Federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Securities held by the Trust and as such will be
considered to have received a pro rata share of income (i.e. dividends)
derived from each Security when such income is considered to be received
by the Trust. This is true whether the income is used to pay for a
portion of the deferred sales charge or if you elect to have your
distributions automatically reinvested into additional Units.
Your Tax Basis and Income or Loss Upon Disposition
You will generally recognize gain or loss when the Trust disposes of a
Security or when you sell or redeem your Units for cash. The price you
pay for your Units, generally including sales charges, is allocated
among your pro rata portion of each Security held by the Trust in order
to determine your tax basis in the pro rata portion of each Security
held by the Trust. In general, your pro rata portion of any dividends
received on the Securities held by the Trust will be taxable to you as
ordinary income. You should consult your tax advisor regarding the
calculation of basis and the tax treatment of dividends.
When you sell or redeem your Units or when the Trust sells Securities
you will generally recognize taxable gain or loss. Net capital gain
(which is defined as net long-term capital gain over net short-term
capital loss for the taxable year) is subject to a maximum marginal
stated tax rate of 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 day you acquire
your Units is excluded for purposes of determining the holding period of
the Unit. Short-term capital gains are taxed at the same rates as
ordinary income.
Page 16
of your Units of this Trust for units of the next series will generally
be disallowed with respect to the sale and subsequent repurchase of
identical Securities under the wash sale provisions of the Internal
Revenue Code.
In-Kind Distributions
If you own at least 1,000 Units of the Trust you may request an In-Kind
Distribution of Securities when you redeem your Units or at the Trust's
termination. If you request an In-Kind Distribution you will be
responsible for any expenses related to this distribution. By electing
to receive an In-Kind Distribution you will receive an undivided
interest in whole shares of stock plus, possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by the Trust.
However, if you also receive cash in exchange for a fractional share of
a Security held by the Trust, you will generally recognize gain or loss
based on the difference between the amount of cash you receive and your
basis in such fractional share of a Security held by the Trust.
Limitations on the Deductibility of Trust Expenses
You may deduct your pro rata share of each expense paid by the Trust to
the same extent as if you directly paid the expense, but only to the
extent that your share of the expenses, together with your other
miscellaneous deductions, exceeds 2% of your adjusted gross income.
You should consult your tax advisor regarding the limitations on the
deductibility of Trust expenses.
Foreign, State and Local Taxes
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as a corporation, and the income of the
Trust will be treated as the income of the Unit holders in the same
manner as for Federal income tax purposes. If you are a foreign investor
and are not engaged in a U.S. trade or business, you will generally be
subject to a 30% withholding tax on distributions (or a lower applicable
treaty rate). You should consult your tax advisor regarding potential
foreign, state or local taxation with respect to your Units.
Retirement Plans
You may purchase Units of the Trust for:
- - Individual Retirement Accounts
- - Keogh Plans
- - pension funds, and
- - other tax-deferred retirement plans.
Generally, the Federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. If you are considering participating in a plan like this, you
should review the tax laws regarding these plans and consult your
attorney or tax adviser. Brokerage firms and other financial
institutions offer these plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as record owner of Units that person registered
as such on its books. If you request certificates representing the Units
you ordered for purchase they will be delivered three business days
after your order or shortly thereafter. You may transfer or redeem Units
represented by a certificate by endorsing it and surrendering it to the
Trustee, along with a written instrument(s) of transfer. You must sign
exactly as your name appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Page 17
Trustee may require additional documentation such as trust instruments,
death certificates, appointments as executor or administrator, or
certificates of corporate authority.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for identification purposes.
You may also choose to hold your Units in uncertificated form. If you
choose this option, the Trustee will keep an account for you and will
credit your account with the number of Units you purchase. Within two
business days of the issuance or transfer of Units held in
uncertificated form, the Trustee will send to you, as the registered
owner of Units:
- - a written initial transaction statement containing a description of
your Trust;
- - the number of Units issued or transferred;
- - your name, address and taxpayer identification number;
- - a notation of any liens or restrictions of the issuer and any adverse
claims; and
- - the date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
As a Unit holder, you may be required to pay a nominal fee to the
Trustee for each certificate reissued or transferred, and to pay any
government charge that may be imposed for each transfer or exchange.
However, the Trustee does not require such charge now, nor are they
currently contemplating doing so. If a certificate gets lost, stolen or
destroyed, you may be required to furnish indemnity to the Trustee to
receive replacement certificates. You must surrender mutilated
certificates to the Trustee for replacement.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per-Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you with the following information:
1. a summary of transactions in the Trust for the year;
2. any Securities sold during the year and the Securities held at the
end of that year by the Trust;
3. the Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
4. amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
Federal and state tax reporting requirements.
Income and Capital Distribution
You will begin receiving distributions on your Units only after you
become a Record Owner. It is your responsibility to notify the Trustee
when you become Record Owner of the Units, but normally your
broker/dealer provides this notice. The Trustee will credit any
dividends received on the Trust's Securities to the Income Account of
the Trust. All other receipts, such as return of capital, are credited
to the Capital Account of the Trust.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." The Trustee will distribute amounts in the Capital Account
on the last day of each month to Unit holders of record on the fifteenth
day of each month provided the amount equals at least $1.00 per 100
Units. However, amounts in the Capital Account from the sale of
Page 18
Securities designated to meet redemptions of Units, to pay the deferred
sales charge or to pay expenses will not be distributed. The Trustee is
not required to pay interest on funds held in the Income or Capital
Accounts of the Trust. However, the Trustee may earn interest on these
funds, thus benefiting from the use of such funds.
We anticipate that the deferred sales charge will be collected from the
Capital Account of the Trust and that the money in the Capital Account
will be sufficient to cover the cost of the deferred sales charge. If
there is not enough money in the Capital Account to pay the deferred
sales charge, the Trustee may sell Securities to meet the shortfall. We
will designate an account where distributions will be made to pay the
deferred sales charge.
The Trustee is required by the Internal Revenue Service to withhold a
certain percentage of any distribution the Trust makes and deliver such
amount to the Internal Revenue Service if the Trustee does not have your
tax identification number. You may recover this amount by giving your
tax identification number to the Trustee, or when you file a tax return.
Normally, the selling broker provides the Trustee your tax
identification number. However, you should check your statements from
the Trustee to make sure they have the number to avoid this "back-up
withholding." If the Trustee does not have one, you should provide it to
the Trustee as soon as possible.
Within a reasonable time after the Trust is terminated you will receive
the pro rata share of the money from the disposition of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
All Unit holders will receive a pro rata share of any other assets
remaining in the Trust, excluding any unpaid expenses of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for any state and local taxes and any governmental charges to be
paid out of the Trust.
Distribution Reinvestment Option. You may elect to have each
distribution of income and/or capital reinvested into additional Units
of the Trust by notifying the Trustee at least 10 days before any Record
Date. Each later distribution of income and/or capital on your Units
will be reinvested by the Trustee into additional Units of the Trust.
You will have to pay any remaining deferred sales charge on any Units
acquired pursuant to this distribution reinvestment option. This option
may not be available in all states. Please note that even if you
reinvest distributions, they are still considered distributions for
income tax purposes.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are held in
uncertificated form, you need only to deliver a request for redemption
to the Trustee. In either case, the certificates or the redemption
request you send to the Trustee must be properly endorsed with proper
instruments of transfer and signature guarantees as explained in "Rights
of Unit Holders-Unit Ownership" (or by providing satisfactory indemnity
if the certificates were lost, stolen, or destroyed). No redemption fee
will be charged, but you are responsible for any governmental charges
that apply. Three business days after the day you tender your Units (the
"Date of Tender") you will receive cash in an amount for each Unit equal
to the Redemption Price per Unit calculated at the Evaluation Time on
the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the New York Stock Exchange (the "Exchange") is open for trading).
However, if your certificates or redemption request are received after
4:00 p.m. Eastern time (or after any earlier closing time on a day on
which the Exchange is scheduled in advance to close at such earlier
Page 19
time), the Date of Tender is the next day the Exchange is open for
trading. Redeemed Units will then be cancelled.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account of the Trust if funds are available for that
purpose, or from the Capital Account. All other amounts paid on
redemption will be taken from the Capital Account of the Trust.
If you are tendering 1,000 Units or more for redemption, rather than
receiving cash you may elect to receive a distribution of shares of
Securities (an "In-Kind Distribution") in an amount and value equal to
the Redemption Price per Unit by making this request in writing to the
Trustee at the time of tender. However, no In-Kind Distribution requests
submitted during the nine business days prior to the Trust's Mandatory
Termination Date will be honored. Where possible, the Trustee will make
an In-Kind Distribution by distributing each of the Securities in book-
entry form to your bank account or broker/dealer at the Depository Trust
Company. The Trustee will subtract from your In-Kind Distribution any
customary transfer and registration charges. As a tendering Unit holder,
you will receive your pro rata number of whole shares of the Securities
that make up the portfolio, and cash from the Capital Account equal to
the fractional shares to which you are entitled. The Trustee may adjust
the number of shares of any Security included in your In-Kind
Distribution to make distribution of whole shares easier. This
adjustment will be made based on the value of the Securities on the Date
of Tender. If there is not enough money in the Capital Account to pay
the required cash distribution, the Trustee may sell Securities as
described above.
The Internal Revenue Service will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee has not previously
been provided your Taxpayer Identification Number. For more information
about this withholding, see "Income and Capital Distribution." If the
Trustee does not have your Taxpayer Identification Number, you must
provide it at the time of the redemption request.
The Trustee may sell Securities in the Trust to make funds available for
redemption. If Securities are sold, the size and diversity of the Trust
will be reduced. These sales may result in lower prices than if the
Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
1. if the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
2. if the Securities and Exchange Commission ("SEC") determines that
trading on the New York Stock Exchange is restricted or that an
emergency exists making sale or evaluation of the Securities not
reasonably practical; and
3. for any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
We will determine the Redemption Price per Unit during the secondary
market based on the aggregate underlying U.S. dollar value of the
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
determined by the Trustee by:
adding
1. cash in the Trust not designated to purchase Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation.
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
Page 20
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, including, but not limited
to, fees and expenses of the Trustee (including legal fees), and 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 before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by the Trust; and
dividing
the result by the number of outstanding Units of the Trust.
If there is any remaining deferred sales charge on the Units when you
redeem them, the amount of this remaining deferred sales charge will be
deducted from your redemption proceeds. In addition, 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 underlying value of the Securities for purposes of
calculating the Redemption Price during the secondary market is
determined in the same manner as that used to calculate the Secondary
Market Public Offering Price as discussed in "Public Offering-The Value
of the Securities."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances. These circumstances include, but are not limited
to, situations in which:
- - the issuer of the Security defaults in the payment of a declared
dividend;
- - any action or proceeding prevents the payment of dividends;
- - there is any legal question or impediment affecting the Security;
- - the issuer of the Security has breached a covenant which would affect
the payment of dividends or the issuer's credit standing, or otherwise
damage the sound investment character of the Security; or
- - the issuer has defaulted on the payment on any other of its
outstanding obligations to such an extent or other such credit factors
exist so that, in our opinion, keeping the Security would be harmful to
the Trust.
Except in the limited instance in which the Trust may acquire
Replacement Securities to replace failed contracts to purchase
Securities, as described in "The FT Series", the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the Trust, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by the Trust, at our instruction,
they will either be sold or held in the Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account of the Trust for distributions
to Unit holders or to meet redemption requests. The Trustee may retain
and pay us or an affiliate of ours to act as agent for the Trust to
facilitate selling Securities, exchanged securities or property from the
Trust. If we or our affiliate act in this capacity, we will be held
subject to the restrictions under the Investment Company Act of 1940, as
amended.
The Trustee may also sell Securities that we designate; or, without our
direction, in its own discretion, in order to meet redemption requests
or pay expenses.
In designating which Securities should be sold, we will try to maintain
Page 21
the proportionate relationship among the Securities. If this is not
possible, the composition and diversity of the Securities in the Trust
may be changed. To get the best price for the Trust we may have to
specify minimum amounts (generally 100 shares) in which blocks of
Securities are to be sold. We may consider sales of units of unit
investment trusts which we sponsor in making recommendations to the
Trustee on the selection of broker/dealers to execute the Trust's
portfolio transactions, or when acting as agent for the Trust in
acquiring or selling Securities on behalf of the Trust.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without
your consent:
- - to cure ambiguities;
- - to correct or supplement any defective or inconsistent provision;
- - to make any amendment required by any governmental agency; or
- - to make other changes determined not to be materially adverse to your
best interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on
the Mandatory Termination Date stated in the "Summary of Essential
Information." The Trust may be terminated prior to the Mandatory
Termination Date:
- - upon the consent of 100% of the Unit holders;
- - if the value of the Securities owned by the Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in 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 such Trust are tendered for redemption by
underwriters, including the Sponsor.
In the event of termination, the Trustee will send prior written notice
thereof to all Unit holders which will specify how you should tender
your certificates, if any, to the Trustee. If the Trust is terminated
due to this last reason, we will refund to each purchaser of Units of
such Trust the entire sales charge paid by such purchaser; however,
termination of the Trust prior to the Mandatory Termination Date for any
other stated reason will result in all remaining unpaid deferred sales
charges on your Units being deducted from your termination proceeds. For
various reasons, the Trust may be reduced below the Discretionary
Liquidation Amount and could therefore be terminated prior to the
Mandatory Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner, timing and execution of
the sale of Securities as part of the termination of the Trust. Because
the Trustee must sell the Securities within a relatively short period of
time, the sale of Securities as part of the termination process may
result in a lower amount than might otherwise be realized if such sale
were not required at this time.
If you own at least 1,000 Units of the Trust the Trustee will send you a
form at least 30 days prior to the Mandatory Termination Date which will
enable you to receive shares of Securities included in the Trust
(reduced by customary transfer and registration charges) rather than the
typical cash distribution representing your pro rata interest in the
Trust. You must notify the Trustee at least ten business days prior to
the Mandatory Termination Date if you elect this In-Kind Distribution
option. If you do not elect to participate in the In-Kind Distribution
option for eligible Unit holders you will receive a cash distribution
from the sale of the remaining Securities, along with your interest in
the Income and Capital Accounts of the Trust, within a reasonable time
Page 22
after the Trust is terminated. Regardless of the distribution involved,
the Trustee will deduct from the Trust any accrued costs, expenses,
advances or indemnities provide by the Indenture, including estimated
compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, Nike Securities L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust"
brand name and other securities. An Illinois limited partnership formed
in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $20 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are 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 information refers only to the Sponsor and not to the Trust or to
any series of the Trust or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
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. If you have questions regarding the Trust, you may
call the Customer Service Help Line at 1-800-682-7520. The Trustee is
supervised 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 has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
The Sponsor and the Trustee will not be liable to Unit holders for
taking any action or for not taking any action in good faith according
to the Indenture. We will also not be accountable for errors in
judgment. We will only be liable for our own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the Trustee's case) or
reckless disregard of our obligations and duties. The Trustee is not
liable for any loss or depreciation when the Securities are sold. If we
fail to act under the Indenture, the Trustee may do so, and the Trustee
will not be liable for any action it takes in good faith under the
Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
Page 23
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - appoint a successor Sponsor, paying them a reasonable rate not more
than that stated by the Securities and Exchange Commission,
- - terminate the Indenture and liquidate the Trust, or
- - continue to act as Trustee without terminating the Indenture.
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 Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information.
However, the Evaluator will not be liable to the Trustee, Sponsor or
Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler, 111 W. Monroe St., Chicago, Illinois,
60603. They have passed upon the legality of the Units offered hereby
and certain matters relating to Federal tax law. Carter, Ledyard &
Milburn acts as the Trustee's counsel, as well as special New York tax
counsel for the Trust.
Auditors.
Ernst & Young LLP, independent auditors, have audited the statement of
net assets, including the schedule of investments at the opening of
business on the Initial Date of Deposit, as set forth in their report.
We've included the Trust's statement of net assets, including the
schedule of investments, in the prospectus and elsewhere in the
registration statement in reliance on Ernst & Young LLP's report, given
on their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the Securities and Exchange Commission and to which we have referred
throughout. This information states more specific risk information about
the Trust.
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Page 26
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Page 27
FIRST TRUST(registered trademark)
Texas Portfolio Series
FT 286
Sponsor:
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
This Prospectus contains information relating to Texas Portfolio Series,
but does not contain all of the information about this investment
company as filed with the Securities and Exchange Commission in
Washington, D.C. under the:
Securities Act of 1933 (file no. 333-63359) and
Investment Company Act of 1940 (file no. 811-05903)
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549-6009
Call: 1-800-SEC-0330
Visit: http://www.sec.gov
____________, 1999
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 28
First Trust (registered trademark)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
contained in FT 286 not found in the prospectus for the Trust. This
Information Supplement is not a prospectus and does not include all of
the information you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus
for the Trust in which you are considering investing ("Prospectus").
Copies of the Prospectus can be obtained by calling or writing the
Trustee at the telephone number and address indicated in the Prospectus.
The Information Supplement has been created to supplement information
contained in the Prospectus.
This Information Supplement is dated ____________, 1999. Capitalized
terms have been defined in the Prospectus.
Table of Contents
Risk Factors
Securities 1
Concentrations
Risk Factors
Securities. 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 Securities or
the general condition of the relevant stock market may worsen, and the
value of the Securities and therefore the value of the Units may
decline. Common stocks are especially susceptible to general stock
market movements and to volatile increases and decreases of value, as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors, including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Both U.S. and foreign
markets have experienced substantial volatility and significant declines
recently as a result of certain or all of these factors. 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.
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.
Concentrations
Page 2
MEMORANDUM
Re: FT 286
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between FT
314, which is the current fund, and FT 286, the filing of which
this memorandum accompanies, is the change in the series number.
The list of securities comprising the Fund, the evaluation,
record and distribution dates and other changes pertaining
specifically to the new series, such as size and number of Units
in the Fund and the statement of condition of the new Fund, will
be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 314 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 286 has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Lisle
and State of Illinois on February 5, 1999.
FT 286
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Director of
Nike Securities February 5, 1999
Corporation, the
General Partner of
Nike Securities L.P. Robert M. Porcellino
Attorney-in-Fact**
David J. Allen Director of
Nike Securities
Corporation, the
General Partner of
Nike Securities L.P.
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Combined
Series 258 (File No. 33-63483) and the same is hereby
incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 24 and
certain subsequent Series, effective January 23, 1992
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-45093] filed on behalf of The First Trust
Special Situations Trust, Series 24).
1.1.1* Form of Trust Agreement for Series 286 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee and First Trust Advisors L.P., as Evaluator
and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1
to Form S-6 [File No. 33-42683] filed on behalf of The
First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of First Trust Advisors, L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on page
S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
33-63483] filed on behalf of The First Trust Combined
Series 258).
___________________________________
* To be filed by amendment.
S-5
