European Target 20 Trust, October 1998 Series
The Trust. FT 306 consists of the underlying separate unit investment
trust set forth above. The Trust consists of a portfolio containing
common stocks issued by companies which provide income and are
considered to have the potential for capital appreciation (the "Equity
Securities").
The European Target 20 Trust, October 1998 Series (the "European Target
20 Trust" or the "Trust") consists of a portfolio of common stocks of
the twenty companies having the highest dividend yield as of September
25, 1998 of the 120 largest companies based on market capitalization
which are headquartered in Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland or the United Kingdom.
The objective of the Trust is to provide an above-average total return
through a combination of capital appreciation and dividend income. Units
of the Trust have not been designed so that their prices will parallel
or correlate with movements in a particular index against which the
Trust is measured, and it is expected that their prices will not do so.
The Trust has a mandatory termination date ("Mandatory Termination
Date") of approximately 13 months from the date of this Prospectus as
set forth in "Summary of Essential Information." Investors in the Trust
should note that an investment in a portfolio which contains foreign
equity securities involves risks in addition to those normally
associated with an investment in a portfolio consisting solely of
domestic equity securities. There is, of course, no guarantee that the
Trust's objective will be achieved.
Each Unit of the Trust represents an undivided interest in all Equity
Securities deposited therein. The Sponsor may deposit additional Equity
Securities or cash to create new Units after the Initial Date of Deposit
in the manner described in "What is the FT Series?"
Unless otherwise indicated, all amounts herein are stated in U.S.
dollars. In the case of the common stocks which are not traded on a
United States securities exchange, amounts are computed on the basis of
the exchange rate for the currency in which an Equity Security is
generally denominated on the business day prior to the Initial Date of
Deposit.
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY BANK, AND UNITS ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION AND INVOLVE INVESTMENT RISK
INCLUDING LOSS OF PRINCIPAL.
Public Offering Price. The Public Offering Price per Unit of the Trust
is equal to the aggregate underlying U.S. dollar value of the Equity
Securities in the Trust (generally determined by the closing sale prices
of the 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
for the Trust (2.75% of the Public Offering Price) and the maximum
remaining deferred sales charge (initially $.175 per Unit), divided by
the number of Units of the Trust outstanding. Subsequent to the Initial
Date of Deposit, the amount of the initial sales charge will vary with
changes in the aggregate value of the Equity Securities. Commencing
November 20, 1998, and on the twentieth day of each month thereafter (or
if such day is not a business day,
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 September 30, 1998
As amended October 1, 1998
Page 1
on the preceding business day) through August 20, 1999, a deferred sales
charge of $.0175 will also be assessed per Unit. Units purchased subsequent
to the initial deferred sales charge payment will be subject to the initial
sales charge and the remaining deferred sales charge payments. The deferred
sales charge will be paid from funds in the Capital Account, 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 2.75% of the
Public Offering Price (equivalent to 2.778% of the net amount invested,
exclusive of the deferred sales charge). A pro rata share of accumulated
dividends, if any, in the Income Account is included in the Public Offering
Price. In addition, a portion of the Public Offering Price during 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 close of the initial offering period. The minimum
purchase for the Trust is $1,000 ($500 for Individual Retirement
Accounts or other retirement plans), except for Rollover Unit holders
who are not subject to a minimum purchase amount. The sales charge for
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?"
Estimated Net Annual Distributions. The estimated net annual dividend
distributions per Unit to Unit holders (based on the most recent
annualized dividend paid with respect to the Equity Securities and
converted into U.S. dollars at the offer side of the exchange rate at
the Evaluation Time) at the opening of business on the Initial Date of
Deposit was $.3751. This estimate will vary with changes in the Trust's
fees and expenses, in dividends received, in currency exchange rates,
foreign withholding, and with the sale of Equity Securities. There is no
assurance that the estimated net annual dividend distributions will be
realized in the future.
Dividend and Capital Distributions. Cash dividends received by the Trust
will be paid on each December 31 and June 30 to Unit holders of record
on December 15 and June 15, respectively, and again as part of the final
liquidation distribution. Distributions of funds in the Capital Account,
if any, will be made to Unit holders as part of the final liquidation
distribution, and in certain circumstances, earlier. Any distribution of
income and/or capital will be net of expenses of the Trust. See "What is
the Federal Tax Status of Unit Holders?" Additionally, upon termination
of the Trust, the Trustee will distribute, upon surrender of Units, to
each remaining Unit holder (other than a Rollover Unit holder as defined
below) his or her 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?" For distributions to Rollover Unit holders, see
"Special Redemption, Liquidation and Investment in a New Trust." Any
Unit holder may elect to have each distribution of income or capital on
his or her Units, other than the final liquidating distribution,
automatically reinvested in additional Units of the Trust subject only
to remaining deferred sales charge payments. See "Rights of Unit Holders-
How are Income and Capital Distributed?"
Foreign Investors. If you are not a United States citizen or resident,
distributions from the Trust will generally not be subject to U.S.
federal withholding tax. See "What is the Federal Tax Status of Unit
Holders?" Such investors should consult their tax advisor regarding the
imposition of U.S. withholding on distributions.
Secondary Market for Units. Although not obligated to do so, the Sponsor
may maintain a market for Units and offer to repurchase the Units at
prices based on the aggregate underlying U.S. dollar value of the 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 still redeem his or her Units through the Trustee. See
"Public Offering-Will There be a Secondary Market?" and "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.
Special Redemption, Liquidation and Investment in a New Trust. The
Sponsor intends to create a separate trust (the "New Trust") in
conjunction with the termination of the Trust. The portfolio of the New
Trust will contain equity securities of the companies which satisfy the
New Trust's investment strategy at the time such New Trust is
established. Unit holders may elect to have their proceeds reinvested
into the New Trust by notifying the Trustee of this election by the
Rollover Notification Date. Such a Unit holder's Units will be redeemed
In-Kind, the distributed Equity Securities sold, and the proceeds
reinvested into the New Trust at a reduced sales charge, provided such
New Trust is offered and units are available. Cash not invested in the
Page 2
New Trust will be distributed. Such Unit holders are "Rollover Unit
holders." Rollover Unit holders therefore will not receive a final
liquidation distribution, but will receive Units in the New Trust. See
"Summary of Essential Information." This exchange option may be
modified, terminated or suspended. See "Rights of Unit Holders-Special
Redemption, Liquidation and Investment in a New Trust."
Termination. Commencing no later than the Mandatory Termination Date,
the Equity Securities will begin to be sold as prescribed by the
Sponsor. The Trustee will provide written notice of the termination to
Unit holders which will specify when certificates may be surrendered.
Unit holders not electing the "Rollover Option" will receive a cash
distribution within a reasonable time after the Trust's termination. 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 or the general condition of the applicable stock market
(which have recently experienced substantial volatility and significant
declines), governmental, political, economic and fiscal policies of the
representative countries, volatile interest rates, economic recession,
the lack of adequate financial information concerning an issuer and
exchange control restrictions impacting foreign issuers.
An investment in the Trust will also be subject to the risks of currency
fluctuations associated with investments in foreign Equity Securities
trading in non-U.S. currencies.
The Trust is not actively managed and Equity Securities will not be sold
to take advantage of market fluctuations or changes in anticipated rates
of appreciation. Finally, the Trust's strategy has underperformed its
comparative index in certain years. The Trust may not be an appropriate
investment for those who are unable or unwilling to assume the risks
involved generally with an equity investment. Because of the nature of
the Trust and the attributes of the common stocks which caused inclusion
in the portfolio, the Trust may not be appropriate for investors seeking
either preservation of capital or high current income. The Trust is not
designed to be a complete investment program for an investor. See "What
are Equity Securities?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-September 30, 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) 15,014
Fractional Undivided Interest in the Trust per Unit (1) 1/15,014
Public Offering Price:
Aggregate Offering Price Evaluation of Equity Securities in Portfolio (2) $ 148,639
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.900
Maximum Sales Charge 2.75% of the Public Offering Price per
Unit (2.778% of the net amount invested, exclusive
of the deferred sales charge) (3) $ .275
Less Deferred Sales Charge per Unit $ (.175)
Public Offering Price per Unit (3) $ 10.000
Sponsor's Initial Repurchase Price per Unit (4) $ 9.725
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.725
Cash CUSIP Number 30264S 205
Reinvestment CUSIP Number 30264S 213
Security Code 56008
Trustee's Annual Fee and out-of-pocket expenses per Unit outstanding $ .0202
Evaluator's Annual Fee per Unit outstanding (5) $ .0025
Maximum Supervisory Fee per Unit outstanding (6) $ .0025
Estimated Organizational and Offering Costs per Unit (7) $ .0180
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
First Settlement Date October 5, 1998
Rollover Notification Date October 1, 1999
Special Redemption and Liquidation Period October 15, 1999 to October 29, 1999
Mandatory Termination Date October 29, 1999
Discretionary Liquidation Amount The Trust may be terminated if the value of the Equity Securities 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.
Income Distribution Record Date Fifteenth day of June and December, commencing December 15, 1998.
Income Distribution Date (8) Last day of June and December, commencing December 31, 1998.
______________
<FN>
(1) As of the close of business on October 1, 1998, 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
on the relevant stock exchange on the business day prior to the Initial
Date of Deposit, or if no such price exists or if the Equity Security is
not so listed, at the closing ask price thereof. The aggregate value of
the foreign Equity Securities trading in non-U.S. currencies represents
the U.S. dollar value based on the offering side value of the currency
exchange rate for the currency in which an Equity Security is generally
denominated at the Evaluation Time on the business day prior to the
Initial Date of Deposit.
(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 business day
prior to 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 per Unit is based on the aggregate
value of the Equity Securities computed on the basis of the offering
side value of the relevant currency exchange rate expressed in U.S.
dollars. The Public Offering Price as shown reflects the value of the
Equity Securities at the Evaluation Time on the United States business
day prior to 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 may be deposited during the day of the Initial Date of
Deposit which will be valued generally 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 during the initial offering period
include estimated organizational and offering costs per Unit. After the
initial offering period, 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) 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 (the "Evaluation Time") on each day on which
it is open.
(6) The Supervisory Fee is payable to an affiliate of the Sponsor. In
addition, the Sponsor may be reimbursed by the Trustee for bookkeeping
and other administrative expenses currently at a maximum annual rate of
$.0010 per Unit.
(7) 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). 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
end of the initial offering period (approximately one month). See
"Public Offering" and "Statement of Net Assets."
(8) At the Rollover Notification Date for Rollover Unit holders or upon
termination of the Trust for other Unit holders, amounts in the Income
Account (which consist of dividends on the Equity Securities) will be
included in amounts distributed to or on behalf of Unit holders.
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 as part of the final liquidation
distribution.
</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 "The FT Series-What are the Expenses and Charges?"
Although the Trust has a term of approximately 13 months and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming, upon the termination
of the Trust, the principal amount and distributions are rolled over
into a New Trust subject only to the deferred sales charge.
<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) 1.75%(b) .175
________ _______
2.75% $ .275
======== =======
Maximum Sales Charge imposed on Reinvested Dividends 1.75%(c) .175
Organizational and Offering Costs
Estimated Organizational and Offering Costs
(as a percentage of public offering price) .180%(d) $.0180
======== =======
Estimated Annual Trust Operating Expenses
(as a percentage of average net assets)
Trustee's fee, portfolio supervision, bookkeeping, administrative and evaluation fees .115% $.0115
Other operating expenses .138% .0137
________ ________
Total .253% $.0252
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment,
assuming the European Target 20 Trust, October 1998 Series has an
estimated operating expense ratio of .253% and a 5% annual return on
the investment throughout the periods $ 32 $ 77 $125 $256
________________
<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 $.0175 per month per Unit, irrespective of
purchase or redemption price deducted over a ten-month period for the
Trust. If the Unit price exceeds $10.00 per Unit, the deferred sales
charge will be less than 1.75%. If the Unit price is less than $10.00
per Unit, the deferred sales charge will exceed 1.75%. 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 "Rights of Unit
Holders-How are Income and Capital Distributed?"
(d) 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). 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 end of the initial offering
period.
</FN>
</TABLE>
The above 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
European Target 20 Trust, October 1998 Series
FT 306
What is the FT Series?
The FT Series is one of a series of investment companies created by the
Sponsor, all of which are generally similar, but each of which is
separate and is designated by a different series number. The FT Series
was formerly known as The First Trust Special Situations Trust Series.
This Series consists of the underlying separate unit investment trust
designated as the "European Target 20 Trust, October 1998 Series." The
Trust was created under the laws of the State of New York pursuant to a
Trust Agreement (the "Indenture"), dated the Initial Date of Deposit,
with Nike Securities L.P., as Sponsor, The Chase Manhattan Bank, as
Trustee and First Trust Advisors L.P., as Portfolio Supervisor and
Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks issued by
companies which provide income and are considered to have the potential
for capital appreciation (the "Equity Securities"), together with an
irrevocable letter or letters of credit of a financial institution in an
amount at least equal to the purchase price of such 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.
Because some international marketplaces offer the potential for above-
average growth, in the Sponsor's opinion at least a portion of an
investor's assets should be strategically invested overseas. The
European Target 20 Trust allows investors to strategically invest
overseas by following a simple dividend strategy and investing in some
of the largest companies in Europe. Typically, large companies with high
dividend yields suggests that the companies may be out of favor or
undervalued.
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." Following the Initial Date of Deposit,
the Sponsor, pursuant to the Indenture, may deposit additional Equity
Securities in the Trust 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
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 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. An affiliate of the Trustee may receive these brokerage fees
or 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.
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
Page 6
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 may 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 underwriters or 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 as indicated in the
"Summary of Essential Information." Such fee will be based upon the
largest 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 in the Trust
outstanding during the period for which the compensation is paid. For a
discussion of the services performed by the Trustee pursuant to its
obligations under the Indenture, see "Rights of Unit Holders."
The fees described above 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 funds being held in the Capital and Income
Accounts are for payment of expenses and redemptions and since such
Accounts are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to the
Trust is expected to result from the use of these funds.
Each of the above mentioned fees may be increased without approval of
the Unit holders by amounts not exceeding proportionate increases under
the category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor. In addition,
with respect to the fees payable to the Sponsor or an affiliate of the
Sponsor for providing bookkeeping and other administrative services,
supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for the Trust, but at
no time will the total amount received for such services rendered to all
unit investment trusts of which Nike Securities L.P. is the Sponsor in
any calendar year exceed the actual cost to the Sponsor or its affiliate
of supplying such services in such year.
The following additional charges are or may be incurred by the Trust:
all legal 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 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; foreign custodial and transaction
fees, if any; all taxes and other government charges imposed upon the
Equity 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
Page 7
meet Trust expenses. These sales may result in capital gains or losses
to Unit holders. See "What is the Federal Tax Status of Unit Holders?"
What is the Federal Tax Status of Unit Holders?
The following 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, as amended
(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 opinions, 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 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 or are automatically reinvested. See "How are Income
and Capital Distributed?-Distribution Reinvestment Option."
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. 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
nearest the date the Unit holder purchases his or her Units) in order to
determine his or her 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 the calculation of basis. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends, as defined
by Section 316 of the Code, paid 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 exceeds such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such Equity
Security, and to the extent that such dividends exceed a Unit holder's
tax basis in such Equity Security shall generally be treated as capital
gain. In general, 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 gains and losses for Federal income tax purposes. In
particular, a Rollover Unit holder should be aware that a Rollover Unit
holder's loss, if any, incurred in connection with the exchange of Units
for Units in the next new series of the Trust (the "New Trust"), (the
Sponsor intends to create a separate New Trust in conjunction with the
termination of the Trust) will generally be disallowed with respect to
the disposition of any Equity Securities pursuant to such exchange to
the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions of the
Page 8
Code taking into account such Unit holder's deemed ownership of the
securities underlying the Units in a New Trust in the manner described
above, if such substantially identical securities are acquired within a
period beginning 30 days before and ending 30 days after such
disposition. However, any gains incurred in connection with such an
exchange by a Rollover Unit holder would be recognized. Unit holders
should consult their tax advisors regarding the recognition of 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
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. 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 Trust 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 him or her. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
Unit holders should consult their tax 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
(although losses incurred by Rollover Unit holders may be subject to
disallowance, as discussed above). 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 for 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 involved, 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
Page 9
loss and opportunities for gain (e.g., short sales, offsetting notional
principal contracts, futures or forward contracts, or similar
transactions) as constructive sales for purposes of recognition of gain
(but not loss) and for purposes of determining the holding period. Unit
holders should consult their own tax advisors with regard to any such
constructive sales rules.
Special Tax Consequences of In-Kind Distributions Upon Investment in a
New Trust. As discussed in "Rights of Unit Holders-Special Redemption,
Liquidation and Investment in a New Trust," a Unit holder may elect to
become a Rollover Unit holder. To the extent a Rollover Unit holder
exchanges his or her Units for Units of a New Trust in a taxable
transaction, such Unit holder will recognize gains, if any, but
generally will not be entitled to a deduction for any losses recognized
upon the disposition of any Equity Securities pursuant to such exchange
to the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions of the
Code taking into account such Unit holder's deemed ownership of the
securities underlying the Units in such New Trust in the manner
described above, if such substantially identical securities were
acquired within a period beginning 30 days before and ending 30 days
after such disposition under the wash sale provisions contained in
Section 1091 of the Code. In the event a loss is disallowed under the
wash sale provisions, special rules contained in Section 1091(d) of the
Code apply to determine the Unit holder's tax basis in the securities
acquired. Rollover Unit holders are advised to consult their tax advisors.
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
on the valuation date nearest to 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 or her 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
Page 10
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 the Units.
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 objective of the Trust is to provide an above-average total return
through a combination of capital appreciation and dividend income.
The Trust consists of a portfolio of common stocks of the twenty
companies having the highest dividend yield as of September 25, 1998 of
the 120 largest companies based on market capitalization which are
headquartered in Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland or the United Kingdom.
An investment in the Trust involves the purchase of a quality portfolio
of attractive equities in one convenient purchase. Investing in stocks
with high dividend yields may be effective in achieving certain of the
Trust's investment objectives, because regular dividends are common for
established companies, and dividends have accounted for a substantial
portion of the total return on stocks of each comparative index as a
group. Due to the short duration of the Trust, there is no guarantee
that either the Trust's objective will be achieved or that the Trust
will provide for capital appreciation in excess of the Trust's expenses.
As set forth below, the hypothetical historical performance of the
European Target 20 Trust strategy has been compared to the performance
of the Morgan Stanley Capital International Europe Index ("MSCI Europe
Index"). The publisher of the MSCI Europe Index, Morgan Stanley Capital
International, is not affiliated with the Sponsor and has not
participated in the creation of the Trust or the selection of the Equity
Securities included therein. There is, of course, no guarantee that the
objective of the Trust will be achieved.
Page 11
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust Portfolio as of a
specific date for the Trust. Since the Sponsor may deposit additional
Equity Securities which were originally selected through this process,
the Sponsor may continue to sell Units of the Trust even though these
Equity Securities may not currently meet the Trust's selection criteria,
and therefore, such Equity Securities would no longer be chosen for
deposit into the Trust if the selection process was to be performed
again at a later time.
Hypothetical Performance Information
The following table shows hypothetical performance and information for
the strategy employed by the Trust and the actual performance of the
MSCI Europe Index in each of the years set forth in the table, as of
December 31 in each of those years (and as of the date indicated). All
of the figures set forth below have been adjusted to take into account
the effect of currency exchange rate fluctuations of the U.S. dollar,
where applicable (i.e., returns are stated in U.S. dollar terms). The
returns shown in the following table are not guarantees of future
performance and should not be used as a predictor of returns to be
expected in connection with the Trust Portfolio. Both stock prices
(which may appreciate or depreciate) and dividends (which may be
increased, reduced or eliminated) will affect the returns. The Trust
strategy underperformed its comparative index in certain years.
Accordingly, there can be no assurance that the Trust's Portfolio will
outperform its comparative index over the life of the Trust or over
consecutive rollover periods, if available.
A holder of Units in the Trust would not necessarily realize as high a
Total Return on an investment in the stocks upon which the hypothetical
returns are based for the following reasons, among others: the Total
Return figures shown do not reflect sales charges, commissions, Trust
expenses or taxes; the Trust's maturity varies slightly from that
presented in compiling the Total Returns; the Trust may not be fully
invested at all times or equally weighted in all stocks comprising the
strategy; and Equity Securities are often purchased or sold at prices
different from the closing prices used in buying and selling Units. In
addition, investors should note that the MSCI Europe Index, which
represents over 500 companies from all of the developed markets in
Europe, provides a much greater level of diversification of companies,
industries and countries than the Trust.
Page 12
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN (2)
Hypothetical Strategy
Total Returns (1) Index Total Returns
_____________________ ___________________
European Target 20
Year Strategy MSCI Europe Index
_____ _________________ _______________
<S> <C> <C>
1983 20.51% 22.38%
1984 2.00% 1.26%
1985 79.54% 79.79%
1986 42.53% 44.46%
1987 14.86% 4.10%
1988 16.77% 16.35%
1989 33.09% 29.06%
1990 -0.49% -3.37%
1991 16.59% 13.66%
1992 -4.03% -4.25%
1993 37.38% 29.79%
1994 -0.51% 2.66%
1995 34.71% 22.13%
1996 24.35% 21.57%
1997 28.91% 24.20%
1998 thru 9/30 4.10% 8.16%
____________
<FN>
(1) The European Target 20 Strategy Stocks for any given period were
selected by applying the European Target 20 Strategy as of the beginning
of the period.
(2) Total Return represents the sum of the percentage change in market
value of each group of stocks between the first and last trading days of
a period and the total dividends paid on each group of stocks during the
period divided by the opening market value of each group of stocks as of
the first trading day of a period. Total Return does not take into
consideration any sales charges, commissions, expenses or taxes. Total
Return assumes that all dividends are reinvested semi-annually and all
returns are stated in terms of the United States dollar. Based on the
year-by-year returns contained in the table, over the 15 full years
listed above, the European Target 20 Strategy Stocks achieved an average
annual total return of 21.45%, which exceeded the average annual total
return of the MSCI Europe Index, which was 18.65%. Although the European
Target 20 Trust seeks to achieve a better performance than the MSCI
Europe Index as a whole, there can be no assurance that the European
Target 20 Trust will achieve a better performance over its one-year life
or over consecutive rollover periods, if available.
</FN>
</TABLE>
Page 13
What are Some Additional Considerations for Investors?
The Trust consists of different issues of Equity Securities, all of
which are listed on a securities exchange. In addition, each of the
companies whose Equity Securities are included in a portfolio are
actively-traded, well-established corporations.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" 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.
Risk Factors. The Equity Securities selected for the Trust generally
share attributes that have caused them to have lower prices or higher
yields relative to other similar stocks in their respective countries.
The Equity Securities may, for example, be experiencing financial
difficulty, or be out of favor in the market because of weak
performance, poor earnings forecasts or negative publicity; or they may
be reacting to general market cycles. There can be no assurance that the
market factors that caused the relatively low prices and high dividend
yields of the Equity Securities will change, that any negative
conditions adversely affecting the stock prices will not deteriorate,
that the dividend rates on the Equity Securities will be maintained or
that share prices will not decline further during the life of the Trust.
Certain of the issuers of Equity Securities in the Trust may be involved
in the manufacture, distribution and sale of tobacco products. Pending
litigation proceedings against such issuers in the United States and
abroad cover a wide range of matters including product liability and
consumer protection. Damages claimed in such litigation alleging
personal injury (both individual and class actions), and in health cost
recovery cases brought by governments, labor unions and similar entities
seeking reimbursement for health care expenditures, aggregate many
billions of dollars.
In June 1997, companies in the U.S. tobacco industry entered into a
negotiated settlement which would result in the resolution of
significant litigation and regulatory issues affecting the tobacco
industry generally. The proposed settlement, while extremely costly to
the tobacco industry, would significantly reduce uncertainties facing
the industry and increase stability in business and capital markets.
However, legislation pending or proposed in the United States Congress
threatens this negotiated settlement, substantially changing many
aspects of it and increasing the uncertainty surrounding the proposed
resolution of issues. This legislation could adversely affect the value,
operating revenues and financial position of tobacco companies. The
Sponsor is unable to predict the outcome of litigation pending against
tobacco companies or how the current uncertainty concerning regulatory
and legislative measures will ultimately be resolved. These and other
possible developments may have a significant impact upon both the price
of such Equity Securities and the value of Units of the Trust.
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 elect to keep or
sell any securities or other property acquired in exchange for Equity
Securities, such as those acquired in connection with a merger or other
transaction. 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 or if the Equity
Securities no longer meet the criteria by which they were selected for
the Trust.
Whether or not the Equity Securities are listed on a 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
Page 14
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 in the Trust should be made with an understanding
of the risks which an investment in common stocks entails. In general,
the value of your investment will decline if the financial condition of
the issuers of the common stocks becomes impaired or if the general
condition of the relevant stock market worsens. 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. Against a backdrop of continued uncertainty
regarding the current global currency crises, falling commodity prices
and certain of the factors described above, both the U.S. and a majority
of foreign markets have experienced substantial volatility and
significant declines recently. The Sponsor cannot predict the direction
or scope of any of these factors. Common stocks 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. Moreover, common stocks do not represent an
obligation of the issuer and therefore do not offer any assurance of
income or provide the degree of protection of capital provided by debt
securities.
Unit holders will be unable to dispose of any of the Equity Securities
in the 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.
Investors should be aware of certain other considerations before making
a decision to invest in the Trust. 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 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,
including the impact of the Sponsor's purchase and sale of the Equity
Securities (especially during the initial offering period of Units of
the Trust and during the Special Redemption and Liquidation Period) and
other factors.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Equity 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 15
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.
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, but may dispose of
Equity Securities only under limited circumstances. See "Rights of Unit
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, other than tobacco litigation
discussed above, there is no litigation pending as of the Initial Date
of Deposit with respect to 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, particularly
with respect to the tobacco industry, the environment or the petroleum
industry, may have a negative impact on certain companies represented in
the Trust. There can be no assurance that future legislation, regulation
or deregulation will not have a material adverse effect on the Trust or
will not impair the ability of the issuers of the Equity Securities to
achieve their business goals.
Foreign Issuers. Since the Equity Securities included in the Trust
consist of common stocks of foreign issuers, an investment in the Trust
involves certain investment risks that are different in some respects
from an investment in a trust which invests entirely in common stocks of
domestic issuers. These investment risks include the possible imposition
of future political or governmental restrictions which might adversely
affect the payment or receipt of dividends on the relevant Equity
Securities, the possibility that the financial condition of the issuers
of the Equity Securities may become impaired or that the general
condition of the relevant stock market may deteriorate, the limited
liquidity and relatively small market capitalization of the relevant
securities market, the imposition of expropriation or confiscatory
taxation, economic uncertainties, the lack of the quantity and quality
of publicly available information concerning the foreign issuers as such
issuers are generally not subject to the same reporting and accounting
requirements as domestic issuers, and the effect of foreign currency
devaluations and fluctuations on the value of the common stocks and
dividends of foreign issuers in terms of U.S. dollars. In addition,
fixed brokerage commissions and other custody and transaction costs on
foreign securities exchanges are generally higher than in the United
States and there is generally less government supervision and regulation
of exchanges, brokers and issuers in foreign countries than there is in
the United States.
On the basis of the best information available to the Sponsor at the
present time, none of the Equity Securities in the Trust are subject to
exchange control restrictions under existing law which would materially
interfere with payment to the Trust of dividends due on, or proceeds
from the sale of, the Equity Securities. The adoption of such
Page 16
restrictions or other legal restrictions could adversely impact the
marketability of the Equity Securities and may impair the ability of the
Trust to satisfy its obligation to redeem Units or could cause delays or
increase the costs associated with the purchase and sale of the Equity
Securities and correspondingly affect the price of the Units.
The purchase and sale of the Equity Securities in the Trust will
generally be effected only in foreign securities markets. Although the
Sponsor does not believe that the Trust will encounter obstacles in
acquiring or disposing of the Equity Securities, investors should be
aware that in certain situations it may not be possible to purchase or
sell an Equity Security in a timely manner for any number of reasons,
including lack of liquidity in the relevant market, the unavailability
of a seller or purchaser of the Equity Securities, and restrictions on
such purchases or sales by reason of federal securities laws or
otherwise. Custody of certain of the Equity Securities in the Trust is
maintained by Cedel Bank S.A. ("CEDEL"), a global custody and clearing
institution which has entered into a sub-custodian relationship with the
Trustee.
On January 1, 1999, Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal and Spain (eleven of the
fifteen member countries of the European Union ("EU")) are scheduled to
establish fixed conversion rates between their existing sovereign
currencies and the euro. On such date the euro is expected to become the
official currency of these eleven countries. As of January 1, 1999, the
participating countries will no longer control their own monetary
policies by directing independent interest rates for their currencies.
Instead, the authority to direct monetary policy, including money supply
and official interest rates for the euro, will be exercised by the new
European Central Bank. The conversion of the national currencies of the
participating countries to the euro could negatively impact the market
rate of exchange between such currencies (or the newly created euro) and
the U.S. dollar. In addition, European corporations, and other entities
with significant markets or operations in Europe (whether or not in the
participating countries), face strategic challenges as these entities
adapt to a single trans-national currency. The euro conversion may have
a material impact on revenues, expenses or income from operations;
increase competition due to the increased price transparency of EU
markets; effect issuers' currency exchange rate risk and derivatives
exposure; disrupt current contracts; cause issuers to increase spending
on information technology updates required for the conversion; and
result in potential adverse tax consequences. The Sponsor is unable to
predict what impact, if any, the euro conversion will have on any of the
issuers of Equity Securities contained in the Trust.
The Trust is concentrated in common stocks which are principally traded
in the United Kingdom. The emphasis of the United Kingdom's economy is
in the private services sector, which includes the wholesale and retail
sector, banking, finance, insurance and tourism. Services as a whole
account for a majority of the United Kingdom's gross national product
and make a significant contribution to the country's balance of payments.
The United Kingdom is a member of the EU, which was created through the
formation of the Maastricht Treaty on European Union in late 1993. It is
expected that the Treaty will have the effect of eliminating most
remaining trade barriers between the 15 member nations and make Europe
one of the largest common markets in the world. However, the effective
implementation of the Treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of Equity
Securities issued by United Kingdom companies impossible to predict.
The United Kingdom will not participate in the conversion to the euro on
January 1, 1999 and the Sponsor is unable to predict if or when the
United Kingdom will convert to the euro. Moreover, it is not possible to
accurately predict the effect of the current political and economic
situation upon long-term inflation and balance of trade cycles and how
these changes, as well as the implementation of a common currency
throughout a majority of EU countries, would affect the currency
exchange rate between the U.S. dollar and the British pound sterling.
Exchange Rate. The Trust is comprised of Equity Securities that are
principally traded in foreign currencies and as such, involve investment
risks that are substantially different from an investment in a fund
which invests in securities that are principally traded in United States
dollars. The United States dollar value of the portfolios (and hence of
the Units) and of the distributions from the portfolios will vary with
Page 17
fluctuations in the United States dollar foreign exchange rates for the
relevant currencies. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including
supply and demand of the respective currency, the rate of inflation in
the respective economies compared to the United States, the impact of
interest rate differentials between different currencies on the movement
of foreign currency rates, the balance of imports and exports goods and
services, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and
other countries.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well-particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
The Evaluator will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large
international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by the Evaluator
may not be indicative of the amount in United States dollars the Trust
would receive had the Trustee sold any particular currency in the
market. The foreign exchange transactions of the Trust will be conducted
by the Trustee with foreign exchange dealers acting as principals on a
spot (i.e., cash) buying basis. Although foreign exchange dealers trade
on a net basis, they do realize a profit based upon the difference
between the price at which they are willing to buy a particular currency
(bid price) and the price at which they are willing to sell the currency
(offer price).
What are the Equity Securities Selected for the European Target 20
Trust, October 1998 Series?
ABN Amro Holding NV, headquartered in Amsterdam, The Netherlands,
provides banking operations worldwide. The bank offers a variety of
financial services, including payment, lending, corporate finance,
leasing, treasury, private banking, trade and commodity finance,
insurance and investment services. The company operates in the
Netherlands and 71 other countries.
Abbey National Plc, headquartered in London, England, focuses on three
main lines of business: building and property development, plant hire
and property rental.
BASF AG, headquartered in Ludwigshafen, Germany, is listed as a chemical
producing group. Its main fields of business are health and nutrition,
colorants and finishing products, chemicals, plastics and fibers, and
oil and gas.
Barclays Plc, headquartered in London, England, offers commercial and
investment banking, insurance, financial and related services. The
company's subsidiary, Barclays Bank Plc, operates branches in the United
Kingdom and 76 other countries.
Bayer AG, headquartered in Leverkusen, Germany, provides a wide variety
of products and services in areas ranging from healthcare and
agriculture to plastics, specialty chemicals and imaging technologies.
Commerzbank AG, headquartered in Frankfurt, Germany, provides a wide
range of banking services to private and business customers. The bank
offers international commercial banking, export finance, corporate
banking, treasury and foreign exchange, investment and loan management
services.
Diageo Plc, headquartered in London, England, produces spirits, beer and
wines under brand names such as "Bailey's," "Guinness Stout," "Harp,"
"Smirnoff" and "Tanqueray." The company also sells food products under
Page 18
the "Green Giant," "Haagen Dazs" and "Pillsbury" brand names, owns and
franchises Burger King restaurants and publishes the Guinness Book of
Records.
EDP-Electricidade de Portugal, S.A., headquartered in Lisbon, Portugal,
generates, transmits, and distributes electricity in Portugal. The
company generates, transmits and distributes electricity through six
wholly-owned subsidiaries. The company generates electric power through
the operation of hydroelectric, fuel oil, coal-fired, gas oil and wind-
driven facilities.
Electrabel S.A., headquartered in Brussels, Belgium, is a private
utility company active in two fields: electricity generation and
transmission, and operation and management of networks for public-
utility services including electricity, natural gas, cable television,
steam and water. The company maintains partnerships with major
industrial consumers and government in Belgium and in other European
countries.
HSBC Holdings Plc, headquartered in London, England, is the holding
company for the HSBC Group. The group is an international banking and
financial services organization with operations in the Asia-Pacific
region, Europe, the Middle East and the Americas. Services provided
include retail and corporate banking, trade, trustee, securities,
custody capital markets and treasury services, private and investment
banking and insurance.
Iberdrola S.A., headquartered in Bilbao, Spain, carries out all manner
of activities, construction work and services required for, or related
to the production, transmission, switching and distribution of electric
power.
Kingfisher Plc, headquartered in London, England, trades principally as
a retailer in stores in the United Kingdom through the "B & Q," "Comet,"
"Superdrug" and "Woolworths" chains; in France through "Darty" and in
Belgium through "New Vanden Borre." In addition, the company has
extensive interests in property which are actively managed through
Chartwell Land.
Koninklijke KPN NV, headquartered in The Hague, The Netherlands,
provides local, long distance and international telecommunications
services throughout The Netherlands.
National Westminster Bank Plc, headquartered in London, England, is a
retail bank providing a variety of banking and financial services to
both domestic and international markets.
Repsol S.A., headquartered in Madrid, Spain, explores for, develops and
produces crude oil and natural gas; transports petroleum products,
liquefied petroleum gas (LPG) and natural gas; produces refined
petroleum products and petrochemicals; and markets petroleum products,
petroleum derivatives, petrochemicals, LPG and natural gas.
Reuters Group Plc (formerly Reuters Holdings PLC), headquartered in
London, England, supplies the global business community and news media
with a variety of products including real-time financial data,
transaction systems, information management systems, access to numeric
and textual databases, news, news pictures and television news. The
company is the world's leading electronic publisher. It operates the
world's most extensive private communications network, serving video
terminals in 161 countries. It is also the largest supplier of financial
trading-room systems.
Rio Tinto Plc, headquartered in London, England, through its interest in
the RTZ-RA Group, explores for and extracts mineral resources in North
America and Australia, as well as in Europe, Southern Africa, Asia and
South America. Principal products are aluminum, borates, coal, copper,
gold, iron ore and titanium dioxide feedstock. Other mineral and metal
products include diamonds, zinc, lead, silver, salt, talc, and uranium.
Royal & Sun Alliance Insurance Group Plc, headquartered in London,
England, provides the major classes of insurance and related financial
services in the United Kingdom and overseas.
Royal Dutch Petroleum, headquartered in The Hague, The Netherlands, owns
60% of the Royal Dutch/Shell Group of companies. These companies are
involved in all phases of the petroleum industry from exploration to
financial processing and delivery.
Scottish Power Plc, headquartered in Glasgow, Scotland, is an integrated
power and energy group that generates and supplies electricity and
provides electrical power systems throughout the United Kingdom. The
company also provides water and waste water services and operates in the
gas and telecommunications sectors.
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.
Page 19
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based on the
aggregate underlying U.S. dollar value of the Equity Securities in the
Trust, 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 (2.75% of the Public Offering Price) and the
maximum remaining deferred sales charge (initially $.175 per Unit),
divided by the number of Units of the Trust outstanding. Commencing
November 20, 1998, and on the twentieth day of each month thereafter (or
if such day is not a business day, on the preceding business day)
through August 20, 1999, a deferred sales charge of $.0175 will also be
assessed per Unit. Units purchased subsequent to the initial deferred
sales charge payment will be subject to the initial sales charge and the
remaining deferred sales charge payments. The deferred sales charge will
be paid from funds in the Capital Account, if sufficient, or from the
periodic sale of Equity Securities. In addition, a portion of the Public
Offering Price during 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 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. The
organizational and offering costs will be deducted from the assets of
the Trust as of the close of the initial offering period.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying U.S. dollar value of the Equity
Securities in the Trust, plus or minus cash, if any, in the Income and
Capital Accounts of the Trust, plus estimated organizational and
offering costs, divided by the number of Units of the Trust outstanding.
The minimum purchase of the Trust is $1,000 ($500 for Individual
Retirement Accounts or other retirement plans), except for Rollover Unit
holders who are not subject to a minimum purchase amount. The applicable
sales charge for primary market sales is reduced by a discount as
indicated below for volume purchases as a percentage of the Public
Offering Price (except for sales made pursuant to a "wrap fee account"
or similar arrangements as set forth below):
<TABLE>
<CAPTION>
Maximum
Dollar Amount of Transaction at Sales Net Dealer
Public Offering Price* Discount Charge Concession
_____________________ ________ _______ __________
<S> <C> <C> <C>
$ 50,000 but less than $100,000 0.25% 2.50% 2.00%
$ 100,000 but less than $150,000 0.50% 2.25% 1.75%
$ 150,000 but less than $500,000 0.85% 1.90% 1.40%
$ 500,000 but less than $1,000,000 1.00% 1.75% 1.25%
$1,000,000 or more 1.75% 1.00% 0.50%
<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
dealer. 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. The sales charge reduction for quantity purchases will not
apply to Rollover Unit holders. Rollover Unit holders of prior series of
the Trust may purchase Units of the Trust subject to the maximum
deferred sales charge on such Units (for rollover purchases of
$1,000,000 or more, such charge shall be limited to 1.00%), deferred as
set forth above. All Units of the Trust will be subject to the
applicable deferred sales charge per Unit regardless of volume purchase
discounts. Investors who, as a result of volume purchase discounts, are
eligible to purchase Units subject to a Maximum Sales Charge of less
than the applicable maximum deferred sales charge amount will be
credited the difference between this Maximum Sales Charge and the
Page 20
deferred sales charge at the time of purchase. The reduced sales charge
structure will apply on all purchases of Units in the Trust by the same
person on any one day from any one dealer. 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 dealer
of any such combined purchase prior to the sale in order to obtain the
indicated discount. Unit holders of other unit investment trusts having
a similar strategy as the Trust may utilize their termination proceeds
to purchase Units of the Trust, subject to a deferred sales charge of
$.0175 per Unit per month to be collected on each of the remaining
deferred sales charge payment dates as provided herein. Except as
described below, 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, related companies of the
Sponsor, dealers and their affiliates and vendors providing services to
the Sponsor may purchase Units at the Public Offering Price, less the
applicable dealer concession. The Sponsor and certain dealers may
establish a schedule by which employees, officers and directors of such
dealers (as described above) are able to purchase Units of the Trust at
the Public Offering Price less the established schedule amount, which is
designed to compensate such dealer for activities relating to the sale
of such Units (the "Employee Dealer Concession").
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or
asset management services or provide such services in connection with
the establishment of an investment account for which a comprehensive
"wrap fee" charge is imposed may purchase Units in the primary or
secondary market at the Public Offering Price, less the concession the
Sponsor typically would allow such broker/dealer. See "Public Offering-
How are Units Distributed?"
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the local
currency prices of the underlying Equity Securities, changes in relevant
currency exchange rates and changes in applicable commissions, stamp
taxes, custodial fees and other costs associated with foreign trading.
During the initial offering period, the aggregate value of the Units of
the Trust shall be determined on the basis of the aggregate underlying
U.S. dollar value of the Equity Securities therein plus or minus cash,
if any, in the Income and Capital Accounts of the Trust. The aggregate
underlying U.S. dollar value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on a
securities exchange or The Nasdaq Stock Market, this evaluation is
generally based on the closing sale prices on that exchange or that
system (unless it is determined that these prices are inappropriate as a
basis for valuation) or, if there is no closing sale price on that
exchange or system, at the closing ask prices. If the Equity Securities
are not so listed or, if so listed and the principal market therefor is
other than on the exchange, the evaluation shall generally be based on
the current ask prices on the over-the-counter market (unless it is
determined that these prices are inappropriate as a basis for
evaluation). If current ask prices are unavailable, the evaluation is
generally determined (a) on the basis of current ask prices for
comparable securities, (b) by appraising the U.S. dollar value of the
Equity Securities on the ask side of the market or (c) by any
combination of the above. The aggregate U.S. dollar value of the Equity
Securities during the initial offering period is computed on the basis
of the offering side value of the relevant currency exchange rate
expressed in U.S. dollars as of the Evaluation Time.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
U.S. dollar 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 calculation of the aggregate underlying
U.S. dollar value of the Equity Securities for secondary market sales is
calculated in the same manner as described above for sales made during
the initial offering period with the exception that bid prices are used
instead of ask prices.
The 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
Page 21
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.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of Units on the date of settlement
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of
1934. Delivery of Certificates, if requested, 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, Units will be sold at the current
Public Offering Price. Upon the termination of the initial offering
period, unsold Units reacquired during the initial offering period and
Units reacquired 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.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales will be made to dealers and others at
prices which represent a concession or agency commission of 2.25% of the
Public Offering Price for primary and secondary market sales. Dealers
and others will receive a concession or agency commission of $0.13 per
Unit on purchases by Rollover Unit holders. In addition, dealers and
others will receive a maximum concession of up to $0.10 per Unit on
purchases of Units resulting from the automatic reinvestment of income
or capital distributions into additional Units. Such concession will
vary based upon the month of the Trust's Initial Date of Deposit.
Notwithstanding the foregoing, dealers and other selling agents who sell
Units of the Trust during the initial offering period in the dollar
amounts set forth below will be entitled to the following additional
sales concessions as a percentage of the Public Offering Price:
<TABLE>
<CAPTION>
Total Sales per Trust Additional Concession
_____________________ ______________________
<S> <C>
$ 40,000,000 but less than $50,000,000 0.050%
$ 50,000,000 but less than $75,000,000 0.125%
$ 75,000,000 but less than $100,000,000 0.150%
$100,000,000 or more 0.200%
</TABLE>
However, resales of Units of the Trust by such dealers and others to the
public will be made at the Public Offering Price described in the
prospectus. No dealer concessions will be made for sales to "wrap fee
accounts" or similar arrangements, or for sales made to employees,
officers and directors of the Sponsor, dealers or vendors providing
services to the Sponsor, except for amounts paid to certain dealers
pursuant to the Employee Dealer Concession. The Sponsor reserves the
right to change the amount of the concession or agency commission from
time to time. In the event the Sponsor reacquires, or the Trustee
redeems, Units from brokers, dealers and others while a market is being
maintained for such Units, such entities agree to repay immediately to
the Sponsor any such concession or agency commission relating to such
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 retained by or remitted to the
banks in the amounts indicated above. Under the Glass-Steagall Act,
banks are prohibited from underwriting Trust Units; however, the Glass-
Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions
are not permitted under such Act. In Texas and in certain other states,
any banks making Units available must be registered as broker/dealers
Page 22
under state law. The Sponsor expects to recoup the foregoing payments
from the deferred sales charge payments related to the Trust.
From time to time the Sponsor may implement programs under which dealers
of the Trust may receive nominal awards from the Sponsor for each of
their registered representatives who have sold a minimum number of UIT
Units during a specified time period. In addition, at various times the
Sponsor may implement other programs under which the sales force of a
dealer 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 of the Trust and returns over
specified periods of other similar trusts sponsored by Nike Securities
L.P. or investment strategies utilized by the Trust (which may show
performance net of expenses and charges which the Trust would have
charged) with returns on other taxable investments such as the common
stocks comprising the DJIA, S&P 500 Composite Stock Price Index, the S&P
Industrial Index, Ibbotson Small-Cap Index, MSCI Europe Index, other
investment indices, 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.
Advertisements and other sales material for the Trust may also show the
total returns (price changes plus dividends received, divided by the
maximum public offering price) of each completed prior series and the
total and average annualized return of all series in the same quarterly
cycle, assuming the holder rolled over at the termination of each prior
series. These returns will reflect all applicable sales charges and
expenses.
Trust performance may be compared to performance on a total return basis
of the DJIA, the S&P 500 Composite Stock Price Index, MSCI Europe 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
2.75% of the Public Offering Price of the Units (equivalent to 2.778% of
the net amount invested, exclusive of the deferred sales charge), less
any reduced sales charge as described under "Public Offering-How is the
Public Offering Price Determined?" 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 on
subsequent deposits) and the cost of such Equity Securities to the
Sponsor. See Note (2) of "Schedule of Investments." During the initial
offering period, the dealers and others also may realize profits or
sustain losses as a result of fluctuations after the Date of Deposit in
the Public Offering Price received by such dealers and others 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
Page 23
price at which Units are purchased and the price at which Units are
resold (which price includes a maximum sales charge for the Trust of
2.75% of the Public Offering Price) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor. The Sponsor may also realize profits or
sustain losses in connection with the creation of additional Units for
the Distribution Reinvestment Option.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor may maintain a market for the Units and
continuously offer to purchase Units at prices, subject to change at any
time, based upon the aggregate underlying U.S. dollar value of the
Equity Securities in the Trust plus or minus cash, if any, in the Income
and Capital Accounts of the Trust. The aggregate underlying U.S. dollar
value of the Equity Securities is computed on the basis of the bid side
value of the relevant currency exchange rate (offer side during the
initial offering period) expressed in U.S. dollars. 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 or may be redeemed by presentation and surrender to the
Trustee 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 signature guaranteed by
a participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
Page 24
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 Equity 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. Proceeds received on the sale of any Equity Securities in
the Trust, to the extent not used to meet redemptions of Units, pay the
deferred sales charge or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of each 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 as part of the final liquidation distribution, and in
certain circumstances, earlier. 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 of the Trust and that amounts in the Capital Account
will be sufficient to cover the cost of the deferred sales charge. 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 under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable 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
who is not a Rollover 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 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. Dividends received with respect to the Equity Securities in a
foreign currency are converted into U.S. dollars at the applicable
exchange rate.
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.
Distribution Reinvestment Option. Any Unit holder may elect to have each
distribution of income or capital on his or her Units, other than the
final liquidating distribution in connection with the termination of the
Trust, automatically reinvested in additional Units of the Trust. Each
person who purchases Units of the Trust may elect to become a
participant in the Distribution Reinvestment Option by notifying the
Trustee of their election. The Distribution Reinvestment Option may not
be available in all states. In order to enable a Unit holder to
participate in the Distribution Reinvestment Option with respect to a
particular distribution on his or her Units, the card must be received
by the Trustee within 10 days prior to the Record Date for such
distribution. Each subsequent distribution of income or capital on the
participant's Units will be automatically applied by the Trustee to
Page 25
purchase additional Units of the Trust. The remaining deferred sales
charge payments will be assessed on Units acquired pursuant to the
Distributions Reinvestment Option. IT SHOULD BE REMEMBERED THAT EVEN IF
DISTRIBUTIONS ARE REINVESTED, THEY ARE STILL TREATED AS DISTRIBUTIONS
FOR INCOME TAX PURPOSES.
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
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 Equity 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.
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.
The Redemption Price per Unit during the secondary market will be
determined on the basis of the aggregate underlying U.S. dollar value of
the Equity Securities in the Trust plus or minus cash, if any, in the
Income and Capital Accounts of the Trust (net of applicable liquidation
costs for foreign Equity Securities). The Redemption Price per Unit is
the pro rata share of each Unit determined by the Trustee by adding: (1)
Page 26
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 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. During 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 U.S. dollar value of the Equity Securities for
purposes of the Redemption Price during the secondary market and the
Secondary Market Public Offering Price will be determined in the
following manner: if the Equity Securities are listed on a securities
exchange or The Nasdaq Stock Market, this evaluation is generally based
on the closing sale prices on that exchange or that system (unless it is
determined that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the
closing bid prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefore is other than on a securities
exchange, the evaluation shall generally be based on the current bid
prices on the over-the-counter market (unless these prices are
inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the
value of the Equity Securities on the bid side of the market or (c) by
any combination of the above. The value of the Equity Securities is
converted to their U.S. dollar equivalent by computing the aggregate
value on the basis of the bid side value of the relevant currency
exchange as of the Evaluation Time and when determining the Redemption
Price during the secondary market includes the applicable liquidation
costs associated with the sale of foreign Equity Securities.
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.
Special Redemption, Liquidation and Investment in a New Trust
It is expected that a special redemption and liquidation will be made of
all Units of the Trust held by any Unit holder (a "Rollover Unit
holder") who affirmatively notifies the Trustee in writing that he or
she desires to participate as a Rollover Unit holder by the Rollover
Notification Date specified in the "Summary of Essential Information."
The Sponsor intends to create a separate trust (the "New Trust") in
conjunction with the termination of the Trust.
All Units of Rollover Unit holders will be redeemed In-Kind during the
Special Redemption and Liquidation Period, or such latter date as
permitted by the Trustee, and the underlying Equity Securities will be
distributed to the Distribution Agent on behalf of the Rollover Unit
holders. During the Special Redemption and Liquidation Period (as set
forth in "Summary of Essential Information"), the Distribution Agent
will be required to sell all of the underlying Equity Securities on
behalf of Rollover Unit holders. The sales proceeds will be net of
brokerage fees, governmental charges or any expenses involved in the
sales.
The Distribution Agent may engage the Sponsor, as its agent, or other
brokers to sell the distributed Equity Securities. The Equity Securities
Page 27
will be sold as quickly as is practicable during the Special Redemption
and Liquidation Period, subject to the Sponsor's sensitivity that
certain Equity Securities have different settlement dates and that the
concentrated sale of large volumes of Equity Securities may affect
market prices in a manner adverse to the interests of investors. The
Sponsor does not anticipate that the period will be longer than five
days, given that the Equity Securities are usually highly liquid. The
liquidity of any Equity Security depends on the daily trading volume of
the Equity Security and the amount that the Sponsor has available for
sale on any particular day.
The Rollover Unit holders' proceeds will be invested in a New Trust or a
trust with a similar investment strategy (as selected by the Unit
holder), if then registered and being offered. The proceeds of
redemption will be used to buy New Trust units once all the proceeds
become available; accordingly, proceeds may be uninvested for up to
several days. Any Rollover Unit holder may thus be redeemed out of the
Trust and become a holder of an entirely different trust, a New Trust,
with a different portfolio of Equity Securities. In accordance with the
Rollover Unit holders' offer to purchase the New Trust units, the
proceeds of the sales (and any other cash distributed upon redemption)
will be invested in a New Trust, at the public offering price, including
the applicable maximum sales charge per Unit (which for Rollover Unit
holders is currently expected to be $.175 per unit for the New Series of
the Trust, all of which will be deferred as provided herein).
The Sponsor intends to create New Trust units as quickly as possible,
depending upon the availability and reasonably favorable prices of the
Equity Securities included in a New Trust portfolio, and it is intended
that Rollover Unit holders will be given first priority to purchase the
New Trust units. Rollover Unit holders may also elect to have their
proceeds invested in a trust with a similar investment strategy, if the
Trust is then registered in the Unit holder's state of residence and
being offered. There can be no assurance, however, as to the exact
timing of the creation of the New Trust units or the aggregate number of
New Trust units which the Sponsor will create. The Sponsor may, in its
sole discretion, stop creating new units (whether permanently or
temporarily) at any time it chooses, regardless of whether all proceeds
of the Special Redemption and Liquidation have been invested on behalf
of Rollover Unit holders. Cash which has not been invested on behalf of
the Rollover Unit holders in New Trust units will be distributed within
a reasonable time after such occurrence. However, since the Sponsor can
create units, the Sponsor anticipates that sufficient units can be
created, although moneys in a New Trust may not be fully invested on the
next business day.
The process of redemption, liquidation, and investment in a New Trust is
intended to allow for the fact that the portfolios selected by the
Sponsor are chosen on the basis of growth and income potential only for
a limited time period, at which point a new portfolio is chosen. It is
contemplated that a similar process of redemption, liquidation and
investment in a New Trust will be available as the Trust terminates.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in a New Trust,
no cash would be distributed at that time to pay any taxes. Included in
the cash for the Special Redemption and Liquidation will be an amount of
cash attributable to a semi-annual distribution of dividend income;
accordingly, Rollover Unit holders also will not have cash from this
source distributed to pay any taxes. See "What is the Federal Tax Status
of Unit Holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a period as they can without
materially adversely affecting the price of the Equity Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated ("Remaining Unit holders")
will not realize capital gains or losses due to a Special Redemption and
Liquidation, and will not be charged any additional sales charge.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the New Trust or any subsequent series of the Trust, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before a Special
Redemption and Liquidation. All Unit holders will then be remaining Unit
holders, with rights to ordinary redemption as before. See "Rights of
Page 28
Unit Holders-How May Units be Redeemed?" The Sponsor may modify the
terms of the New Trust or any subsequent series of the Trust. The
Sponsor may also modify, suspend or terminate the Rollover Option upon
notice to the Unit holders of such amendment at least 60 days prior to
the effective date of such amendment.
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.
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 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, or when
acting as agent for the Trust in acquiring or selling Equity Securities
on behalf of the Trust.
Page 29
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, 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, Templeton Growth and
Treasury Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and The Advantage Growth and Treasury Securities Trust. First Trust
introduced the first insured unit investment trust in 1974 and to date
more than $20 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
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.
Page 30
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor and 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." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
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
underwriters, including the Sponsor. If the Trust is liquidated because
of the redemption of unsold Units of the Trust by underwriters, the
Sponsor will refund to each purchaser of Units of the Trust the entire
sales charge paid by such purchaser; however, liquidation of the Trust
in other circumstances will result in all remaining unpaid deferred
sales charges being deducted from termination proceeds paid to Unit
holders. 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?" Also, because of the Special Redemption and
Liquidation in a New Trust, there is a possibility that the Trust may be
reduced below the Discretionary Liquidation Amount and that the Trust
could therefore be terminated at that time before the Mandatory
Termination Date of the Fund.
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
Page 31
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. Unit holders who do not elect the
Rollover Option 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
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. In addition, to
the extent that Equity Securities are sold prior to the 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 32
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
FT 306
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 306, comprised of European Target 20
Trust, October 1998 Series, as of the opening of business on September
30, 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 September 30,
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 306,
comprised of European Target 20 Trust, October 1998 Series, at the
opening of business on September 30, 1998 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
September 30, 1998
Page 33
Statement of Net Assets
EUROPEAN TARGET 20 TRUST, OCTOBER 1998 SERIES
FT 306
At the Opening of Business on the
Initial Date of Deposit-September 30, 1998
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Equity Securities represented
by purchase contracts (1) (2) $148,639
Less accrued organizational and offering costs (3) (270)
Less liability for deferred sales charge (4) (2,627)
________
Net assets $145,742
========
Units outstanding 15,014
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,141
Less sales charge (5) (4,129)
Less estimated organizational and offering costs (3) (270)
________
Net assets $145,742
========
<FN>
NOTES TO STATEMENTS 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 purchase contracts for such Equity
Securities.
(3) A portion of the Public Offering Price 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 $.0180 per Unit, based upon the expected number of Units of
the Trust to be created. A distribution will be made at the end of the
initial offering period to an account maintained by the Trustee from
which the organizational and offering cost obligation of the investors
to the Sponsor will be satisfied. To the extent the number of Units
issued is larger or smaller than the estimate, the actual distribution
per Unit at the end of the initial offering period may differ from that
set forth above.
(4) Represents the amount of mandatory distributions from the Trust
($.175 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on November 20, 1998 and on the twentieth day of
each month thereafter (or if such date is not a business day, on the
preceding business day) through August 20, 1999. If Units are redeemed
prior to August 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 in the Trust includes a maximum
total sales charge computed at the rate of 2.75% of the Public Offering
Price (equivalent to 2.778% 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 34
Schedule of Investments
EUROPEAN TARGET 20 TRUST, OCTOBER 1998 SERIES
FT 306
At the Opening of Business on the
Initial Date of Deposit-September 30, 1998
<TABLE>
<CAPTION>
Percentage
Number of Aggregate Market Cost of Equity Current
of Offering Value per Securities to Dividend
Shares Name of Issuer of Equity Securities (1) Price Share the Trust (2) Yield (3)
______ _______________________________________ ___________ ________ _____________ ________
<C> <S> <C> <C> <C> <C>
419 ABN Amro Holding NV 5% $ 17.704 $ 7,418 3.79%
432 Abbey National Plc 5% 17.201 7,431 4.00%
193 BASF AG 5% 38.439 7,419 4.43%
429 Barclays Plc 5% 17.321 7,431 4.80%
189 Bayer AG 5% 39.243 7,417 4.12%
257 Commerzbank AG 5% 28.903 7,428 4.42%
803 Diageo Plc 5% 9.249 7,427 4.30%
314 EDP-Electricidade de Portugal, S.A. 5% 23.639 7,423 2.67%
19 Electrabel S.A. 5% 396.447 7,532 3.56%
381 HSBC Holdings Plc 5% 19.488 7,425 5.69%
442 Iberdrola S.A. 5% 16.802 7,426 3.09%
790 Kingfisher Plc 5% 9.403 7,428 2.72%
243 Koninklijke KPN NV 5% 30.599 7,436 4.84%
527 National Westminster Bank Plc 5% 14.096 7,428 5.05%
171 Repsol S.A. 5% 43.497 7,438 3.23%
867 Reuters Group Plc 5% 8.567 7,427 3.31%
606 Rio Tinto Plc 5% 12.261 7,430 4.39%
835 Royal & Sun Alliance Insurance Group Plc 5% 8.891 7,424 4.53%
153 Royal Dutch Petroleum 5% 48.515 7,423 3.44%
767 Scottish Power Plc 5% 9.684 7,428 4.49%
_____ ________
Total Investments 100% $148,639
===== ========
______________
<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
purchase contracts for the Equity Securities were entered into by the
Sponsor on September 30, 1998. The Trust has a mandatory termination
date of October 29, 1999.
(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 closing sale prices of the Equity
Securities on the applicable exchange (converted into U.S. dollars at
the offer side of the exchange rate at the Evaluation Time) at the close
of business on September 29, 1998, the business day prior to the Initial
Date of Deposit. The valuation of the Equity Securities has been
determined by the Evaluator, an affiliate of the Sponsor. Such aggregate
underlying value of the Equity Securities on the business day prior to
the Initial Date of Deposit was $148,639. Cost and profit to Sponsor
relating to the Equity Securities sold to the Trust were $148,118 and
$521, respectively.
(3) Current Dividend Yield for each Equity Security was calculated by
dividing the most recent annualized dividend paid on an Equity Security
by that Equity Security's closing sale price at the close of business on
the business day prior to the Initial Date of Deposit.
</FN>
</TABLE>
Page 35
CONTENTS:
Summary of Essential Information:
European Target 20 Trust, October 1998 Series 4
FT 306:
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? 11
Portfolio:
What are the Equity Securities? 11
Hypothetical Performance Information 12
What are Some Additional Considerations
for Investors? 14
Risk Factors 14
Legislation 16
Foreign Issuers 16
Exchange Rate 17
What are the Equity Securities Selected for the
European Target 20 Trust, October 1998 Series? 18
Public Offering:
How is the Public Offering Price Determined? 20
How are Units Distributed? 22
What are the Sponsor's Profits? 23
Will There be a Secondary Market? 24
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 24
How are Income and Capital Distributed? 25
What Reports will Unit Holders Receive? 26
How May Units be Redeemed? 26
Special Redemption, Liquidation and
Investment in a New Trust 27
How May Units be Purchased by the Sponsor? 29
How May Equity Securities be Removed
from the Trust? 29
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 30
Who is the Trustee? 30
Limitations on Liabilities of Sponsor and Trustee 30
Who is the Evaluator? 31
Other Information:
How May the Indenture be Amended
or Terminated? 31
Legal Opinions 32
Experts 32
Report of Independent Auditors 33
Statement of Net Assets 34
Notes to Statement of Net Assets 34
Schedule of Investments 35
When Units of the Trust are no longer available, or for investors who
will reinvest into subsequent series of the Trust, this Prospectus may
be used as a preliminary prospectus for a future series; in which case
investors should note the following:
INFORMATION CONTAINED HEREIN IS SUBJECT TO AMENDMENT. A REGISTRATION
STATEMENT RELATING TO SECURITIES OF A FUTURE SERIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE.
THE PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
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)
EUROPEAN TARGET 20 TRUST, OCTOBER 1998 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
September 30, 1998
As amended October 1, 1998
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
