File No. 33-39091
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST, SERIES 1 UPPER MIDWEST
SERIES 1
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : July 1, 1994
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
Pursuant to Rule 24f-2 under the Investment Company Act of
1940, the issuer has registered an indefinite amount of
securities. A 24f-2 Notice for the offering was last filed on
April 26, 1994.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
1,266,400 UNITS
PROSPECTUS
Part One
Dated June 21, 1994
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three.
The Trust
The Total Growth & Treasury Securities Trust, Upper Midwest, Series 1 (the
"Trust") is a unit investment trust consisting of a portfolio of "zero coupon"
U.S. Treasury bonds (Treasury obligations) and common stocks issued by
companies incorporated or headquartered in the States of Minnesota, Wisconsin,
Iowa and Nebraska. At May 16, 1994, each Unit represented a 1/1,266,400
undivided interest in the principal and net income of the Trust (see "The
Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price
The Public Offering Price per 100 Units is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital accounts of the Trust divided by the number of Units
outstanding, multiplied by 100, plus a sales charge of 5.8% of the Public
Offering Price (6.157% of the amount invested), excluding income and principal
cash. At May 16, 1994, the Public Offering Price per 100 Units was $1,306.52
(see "Public Offering" in Part Two). The minimum purchase is 100 units.
Please retain all parts of this Prospectus for future reference.
_____________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_____________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
SUMMARY OF ESSENTIAL INFORMATION AS OF MAY 16, 1994
Sponsor: Nike Securities L.P.
Evaluator: Securities Evaluation Service, Inc.
Trustee: United States Trust Company of New York
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Aggregate Maturity Value of Treasury obligations
in the Trust $12,644,000
Number of Units 1,266,400
Fractional Undivided Interest in the Trust per Unit 1/1,266,400
Public Offering Price:
Aggregate Value of Securities in the Portfolio $15,503,440
Aggregate Value of Securities per 100 Units $1,224.21
Income and Principal cash in the portfolio $87,793
Income and Principal cash per 100 units $6.93
Sales Charge 6.157% (5.8% of Public Offering Price,
excluding income and principal cash) $75.38
Public Offering Price per 100 Units $1,306.52
Redemption Price and Sponsor's Repurchase Price per
100 units ($75.38 less than the Public Offering
Price per 100 Units) $1,231.14
</TABLE>
Date Trust Established March 26, 1991
Mandatory Termination Date May 15, 2000
Evaluator's Annual Fee: $.30 per 100 units deposited. Evaluations for
purposes of sale, purchase or redemption of Units are made as of the close of
trading (4:00 p.m. Eastern time) on the New York Stock Exchange on each day on
which it is open.
Supervisory fee payable to an affiliate Maximum of $.25 per
of the Sponsor 100 Units annually
Trustee's Annual Fee: $.84 per 100 Units outstanding.
Capital Distribution Record Date: Twentieth day of each December.
Capital Distribution Date: Thirty-first day of each December.
Income Distribution Record Date: First day of each July and twentieth day of
each December.
Income Distribution Date: Fifteenth day of each July and thirty-first day of
each December.
A Unit holder who owns at least 10,000 units may request an "In Kind
Distribution" upon termination of the Trust. See "Rights of Unit Holders -
How are Income and Capital Distributed?" in Part Two.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of The First Trust
Special Situations Trust, Series 8,
Total Growth & Treasury Securities Trust,
Upper Midwest, Series 1
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of The First Trust Special Situations Trust,
Series 8, Total Growth & Treasury Securities Trust, Upper Midwest, Series 1 as
of February 28, 1994, and the related statements of operations and changes in
net assets for each of the two years in the period then ended and for the
period from the Initial Date of Deposit, March 26, 1991, to February 29, 1992.
These financial statements are the responsibility of the Trust's Trustee. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of February 28, 1994,
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The First Trust Special
Situations Trust, Series 8, Total Growth & Treasury Securities Trust, Upper
Midwest, Series 1 at February 28, 1994, and the results of its operations and
changes in its net assets for each of the two years in the period then ended
and for the period from the Initial Date of Deposit, March 26, 1991, to
February 29, 1992, in conformity with generally accepted accounting
principles.
ERNST & YOUNG
Chicago, Illinois
May 20, 1994
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1994
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at value (cost, including accretion
on the Treasury obligations, $13,611,357) (Note 1) $16,830,344
Cash 23,283
Dividends receivable 26,145
___________
16,879,772
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Accrued liabilities 2,757
___________
Net assets, applicable to 1,310,500 outstanding
units of fractional undivided interest:
Cost of Trust assets, including accretion on
the Treasury obligations (Note 1) $13,611,357
Net unrealized appreciation (Note 2) 3,218,987
Distributable funds 46,671
___________
$16,877,015
===========
Net asset value per 100 units $1,287.83
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
PORTFOLIO - See notes to portfolio.
February 28, 1994
<TABLE>
<CAPTION>
Maturity Market
value Name of Issuer and Title of Security value
<C> <S> <C>
Corpus of a U.S. Treasury Note (stripped
of its interest paying coupons) maturing
$13,105,000 (1) May 15, 2000 $9,096,121
===========
</TABLE>
<TABLE>
<CAPTION>
Number
of Shares Name of Issuer of Equity Securities
<C> <S> <C>
950 Bandag, Incorporated 55,931
1,130 Bandag, Incorporated (Class A) 61,020
11,900 ConAgra, Inc. 325,763
6,955 Cray Research, Inc. 209,519
3,797 Dayton Hudson Corporation 271,485
6,140 Deluxe Corporation 208,760
11,325 Firstar Corporation 353,906
5,774 General Mills, Inc. 321,179
11,835 Harley-Davidson, Inc. 579,915
7,240 Harnischfeger Industries, Inc. 182,810
9,004 Honeywell, Inc. 301,634
12,110 Geo. A. Homel & Company 257,337
4,186 International Dairy Queen, Inc. (Class A) 71,162
4,700 (2) Johnson Controls, Inc. 277,888
4,476 Medtronic, Inc. 356,961
25,968 (3) Metropolitan Financial Corporation 412,242
18,821 Midwest Resources, Inc. 310,546
3,100 Minnesota Mining and Manufacturing
Company 326,663
17,256 (4) Norwest Corporation 405,516
9,187 Northern States Power Company 378,964
8,808 Pioneer Hi-Bred International, Inc. 323,694
5,256 St. Jude Medical, Inc. 149,796
4,987 SciMed Life Systems, Inc. 177,039
6,960 United HealthCare Corporation 575,070
6,961 Valmont Industries, Inc. 127,038
12,373 (5) Wausau Paper Mills Company 361,910
14,019 Wisconsin Energy Corporation 350,475
___________
Total equity securities 7,734,223
___________
Total investments $16,830,344
===========
</TABLE>
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
NOTES TO PORTFOLIO
February 28, 1994
(1) The Treasury obligations have been purchased at a discount from their
par value because there is no stated interest income thereon (such
securities are often referred to as U.S. Treasury zero coupon bonds).
Over the life of the Treasury Obligations the value increases, so that
upon maturity the holders will receive 100% of the principal amount
thereof.
(2) The shares of International Dairy Queen, Inc. are Class A and have
limited voting rights.
(3) The number of shares reflects the effect of a 10% stock dividend.
(4) The number of shares reflects the effect of a two for one stock split.
(5) The number of shares reflects the effect of a 33% stock dividend.
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Initial
Date of Deposit,
Year ended Year ended Mar. 26, 1991,
Feb. 28, 1994 Feb. 28, 1993 to Feb. 29, 1992
<S> <C> <C> <C>
Interest income $660,636 661,672 586,969
Dividends 198,211 193,935 188,453
___________________________________________
Total investment income 858,847 855,607 775,422
Expenses:
Trustee's fees and related
expenses (19,220) (24,551) (14,407)
Evaluator's fees (4,233) (4,564) (4,003)
Supervisory fees (3,682) (3,920) (3,740)
___________________________________________
Total expenses (27,135) (33,035) (22,150)
___________________________________________
Investment income - net 831,712 822,572 753,272
Net gain (loss) on investments:
Net realized gain (loss) 618,862 126,362 58,813
Change in unrealized
appreciation or
depreciation (381,998) 1,270,879 2,330,106
___________________________________________
236,864 1,397,241 2,388,919
___________________________________________
Net increase in net assets
resulting from operations $1,068,576 2,219,813 3,142,191
===========================================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Initial
Date of Deposit,
Year ended Year ended Mar. 26, 1991,
Feb. 28, 1994 Feb. 28, 1993 to Feb. 29, 1992
<S> <C> <C> <C>
Net increase in net assets
resulting from operations:
Investment income - net $831,712 822,572 753,272
Net realized gain (loss) on
investments 618,862 126,362 58,813
Change in unrealized
appreciation or
depreciation on
investments (381,998) 1,270,879 2,330,106
___________________________________________
1,068,576 2,219,813 3,142,191
Units issued (1,550,000
in 1992) - - 13,963,396
Units redeemed (190,500,
67,000 and 32,000 in 1994,
1993 and 1992, respectively) (2,439,873) (728,442) (344,127)
Distributions to unit holders:
Investment income - net (161,383) (161,137) (120,975)
Principal from investment
transactions - - (5,504)
___________________________________________
(161,383) (161,137) (126,479)
___________________________________________
Total increase (decrease)
in net assets (1,532,680) 1,330,234 16,634,981
Net assets:
At the beginning of the
period (representing
1,501,000, 1,568,000 and
50,000 units, respectively,
outstanding) 18,409,695 17,079,461 444,480
___________________________________________
At the end of the period
(including distributable
funds applicable to Trust
units of $46,671, $45,370
and $44,409 at February 28,
1994, February 28, 1993
and February 29, 1992,
respectively) $16,877,015 18,409,695 17,079,461
===========================================
Trust units outstanding at
the end of the period 1,310,500 1,501,000 1,568,000
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The treasury obligations are stated at values as determined by Securities
Evaluation Service, Inc. (the Evaluator), certain shareholders of which are
officers of the Sponsor. The values are based on (1) current bid prices for
the securities obtained from dealers or brokers who customarily deal in
securities comparable to those held by the Trust, (2) current bid prices for
comparable securities, (3) appraisal or (4) any combination of the above.
The equity securities are stated at the closing sale prices of listed equity
securities and the bid prices of over-the-counter traded equity securities as
reported by the Evaluator.
Investment income -
Dividends on each equity security are recognized on such equity security's ex-
dividend date. Interest income consists of amortization of original issue
discount and market discount or premium on the treasury obligations. Such
amortization is included in the cost of the treasury obligations and not in
distributable funds because it is not currently available for distribution to
unit holders.
Security cost -
Cost of the Trust's treasury obligations is based on the offering price of the
treasury obligations on the dates the treasury obligations were deposited in
the Trust, plus amortization of original issue discount and amortization of
market discount or premium. Cost of the equity securities is based on the
market value of such securities on the dates the securities were deposited in
the Trust. The cost of securities sold is determined using the average cost
method. Sales of securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to United States Trust Company of
New York, which is based on $.84 per annum per 100 units outstanding based on
the largest aggregate number of units outstanding during the calendar year.
In addition, the Evaluator will receive an annual fee based on $.30 per 100
units deposited. The Trust also pays recurring financial reporting costs and
an annual supervisory fee payable to an affiliate of the Sponsor.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at February 28, 1994 follows:
<TABLE>
<CAPTION>
Treasury Equity
obligations securities Total
<S> <C> <C> <C>
Unrealized appreciation $1,242,800 2,373,907 3,616,707
Unrealized depreciation - (397,720) (397,720)
_____________________________________
$1,242,800 1,976,187 3,218,987
=====================================
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
offering price of the treasury obligations and the aggregate underlying value
of the equity securities on the date of an investor's purchase, plus a sales
charge of 5.5% of the public offering price which is equivalent to
approximately 5.820% of the net amount invested.
Distributions to unit holders -
Income distributions to unit holders are made semiannually on July 15 and
December 31 to unit holders of record on July 1 and December 20, respectively.
Principal distributions to unit holders, if any, are made on December 31 to
unit holders of record on December 20.
<PAGE>
Selected data per 100 units of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of Deposit,
Year ended Year ended Mar. 26, 1991,
Feb. 28, 1994 Feb. 28, 1993 to Feb. 29, 1992
<S> <C> <C> <C>
Investment income - interest
and dividends $61.18 56.55 49.31
Expenses (1.93) (2.18) (1.41)
_________________________________________
Investment income - net 59.25 54.37 47.90
Distributions to unit holders:
Investment income - net (11.54) (10.69) (7.61)
Principal from investment
transactions - - (.35)
Net gain (loss) on investments 13.62 93.57 160.35
_________________________________________
Total increase (decrease)
in net assets 61.33 137.25 200.29
Net assets:
Beginning of the period 1,226.50 1,089.25 888.96
_________________________________________
End of the period $1,287.83 1,226.50 1,089.25
=========================================
</TABLE>
Investment income - interest and dividends, Expenses and Investment income -
net per 100 units have been calculated based on the weighted average number of
units outstanding during each period (1,403,766, 1,512,962 and 1,572,438 units
during the years ended February 28, 1994 and 1993 and the period from March
26, 1991 to February 29, 1992, respectively). Distributions to unit holders
of Investment income - net per 100 units reflects the Trust's actual
distributions of approximately $5.85 per 100 units to 1,456,000 units on July
15, 1993, approximately $5.69 per 100 units to 1,339,000 units on December 31,
1993, $5.47 per 100 units to 1,514,004 units on July 15, 1992, approximately
$5.22 per 100 units to 1,501,003 units on December 31, 1992, approximately
$5.26 per 100 units to 1,586,000 units on December 31, 1991 and approximately
$2.35 per 100 units to 1,600,000 units on July 15, 1991. Distributions to
unit holders of principal from Investment Transactions reflects a distribution
of approximately $.35 per 100 units on December 31, 1991. The Net gain (loss)
on investments per 100 units during the period from March 26, 1991 to
February 29, 1992 includes the effects of changes arising from issuance of
1,550,000 additional units during the period at net asset values which
differed from the net asset value per 100 units of the original 50,000 units
($888.96 per 100 units) on March 26, 1991.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
UPPER MIDWEST, SERIES 1
PART ONE
Must be Accompanied by Part Two and Part Three
____________________
P R O S P E C T U S
____________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: United States Trust Company of New York
770 Broadway
New York, New York 10003
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter, Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
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 statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
The First Trust Special Situations Trust
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated January 14, 1994 AND PART THREE
The Trust. The First Trust Special Situations Trusts, (the "Trusts"
and each a "Trust") are unit investment trusts consisting of portfolios
containing common stocks and, in certain Trusts, zero coupon U.S.
Treasury bonds. See Parts One and Three for a more complete description
of the portfolio for each Trust, including whether the portfolio
of a Trust includes zero coupon U.S. Treasury bonds.
The general objective of the Trusts containing only common stocks
("Equity Securities") (the "Equity Trusts") is to provide potential
capital appreciation and, in certain Trusts, to provide income.
The objective of the Trusts containing Equity Securities and zero
coupon U.S. Treasury bonds ("Treasury Obligations") (the "Growth
and Treasury Trusts") is to protect Unit holders' capital and
provide potential capital appreciation. For a more specific description
of the objective of each Trust, see "The Objective of the Trusts"
in Part Three. Collectively the Treasury Obligations and the Equity
Securities are referred to herein as the "Securities." See "Schedule
of Investments" appearing in Part One for each Trust. Each Trust
has a Mandatory Termination Date as indicated in Part One. The
Treasury Obligations evidence the right to receive a fixed payment
at a future date from the U.S. Government and are backed by the
full faith and credit of the U.S. Government. The guarantee of
the U.S. Government does not apply to the market value of the
Treasury Obligations or the Units of the Growth and Treasury Trusts,
whose net asset values will fluctuate and, prior to maturity,
may be worth more or less than a purchaser's acquisition cost.
There is, of course, no guarantee that the objectives of the Trusts
will be achieved.
Each Unit of a Trust represents an undivided fractional interest
in all the Securities deposited in the Trust. The Growth and Treasury
Trusts have been organized so that purchasers of Units should
receive, at the termination of a Trust, an amount per Unit at
least equal to $1.00, or $10.00 for certain Trusts (which is equal
to the per Unit value upon maturity of the Treasury Obligations),
even if the Growth and Treasury Trust never paid a dividend and
the value of the Equity Securities were to decrease to zero, which
the Sponsor considers highly unlikely. This feature of the Growth
and Treasury Trusts provides Unit holders who purchase Units at
a price of $1.00, or $10.00 for certain Growth and Treasury Trusts,
or less per Unit with total principal protection, including any
sales charges paid, although they might forego any earnings on
the amount invested. To the extent that Units are purchased at
a price less than $1.00, or $10.00 for certain Growth and Treasury
Trusts, per Unit, this feature may also provide a potential for
capital appreciation. See Part One for each Growth and Treasury
Trust to determine those Trusts for which information is based
on $1.00 per Unit or $10.00 per Unit. UNIT HOLDERS DISPOSING OF
THEIR UNITS PRIOR TO THE MATURITY OF A GROWTH AND TREASURY TRUST
MAY RECEIVE MORE OR LESS THAN $1.00 PER UNIT (OR $10.00 PER UNIT
FOR CERTAIN TRUSTS) DEPENDING ON MARKET CONDITIONS ON THE DATE
UNIT ARE SOLD OR REDEEMED.
The Treasury Obligations deposited in a Growth and Treasury Trust
on the Initial Date of Deposit will mature as listed in the "Portfolio"
appearing in Part One for each Trust. The Treasury Obligations
in a Growth and Treasury Trust have a maturity value equal to
or greater than the aggregate Public Offering Price (which includes
the sales charge) of the Units of the Growth and Treasury Trust
on the Initial Date of Deposit. The Equity Securities deposited
in a Trust's portfolio have no fixed maturity date and the value
of these underlying Equity Securities will fluctuate with changes
in the values of stocks in general and with changes in the conditions
and performance of the specific Securities owned by the Trusts.
See "Portfolio" appearing in Part One for each Trust.
ALL PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE
REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1
Public Offering Price. The secondary market Public Offering Price
per Unit will be based upon a pro rata share of the bid prices
of the Treasury Obligations (if applicable) and the aggregate
underlying value of the Equity Securities in the Trusts (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust plus a sales charge as indicated
in Part One for each Trust. The minimum purchase of each Trust
is that amount as set forth in Part One for each Trust. For certain
Trusts, the sales charge is reduced on a graduated scale for sales
involving at least a minimum number of Units or a minimum dollar
amount. See "How is the Public Offering Price Determined?"
Dividend and Capital Gains Distributions. Distributions of dividends
received, and realized capital gains, if any, received by a Trust
will be paid in cash on the Distribution Date to Unit holders
of record on the Record Date as set forth in the "Summary of Essential
Information" in Part One for each Trust. Any distribution of income
and/or capital gains will be net of the expenses of the Trust.
Distributions of funds in the Capital Account, if any, will be
made at least annually in December of each year. INCOME WITH RESPECT
TO THE ACCRUAL OF ORIGINAL ISSUE DISCOUNT ON THE TREASURY OBLIGATIONS
(IF APPLICABLE) WILL NOT BE DISTRIBUTED CURRENTLY, ALTHOUGH UNIT
HOLDERS OF A GROWTH AND TREASURY TRUST WILL BE SUBJECT TO INCOME
TAX AT ORDINARY INCOME RATES AS IF A DISTRIBUTION HAD OCCURRED.
See "What is the Federal Tax Status of Unit Holders?" Additionally,
upon termination of a Trust, the Trustee will distribute, upon
surrender of Units for redemption, to each Unit holder his pro
rata share of the Trust's assets, less expenses, in the manner
set forth under "Rights of Unit Holders-How are Income and Capital
Distributed?"
Secondary Market for Units. The Sponsor may maintain a market
for Units of the Trusts and offer to repurchase such Units at
prices which are based on the aggregate bid side evaluation of
the Treasury Obligations (if applicable) and the aggregate underlying
value of Equity Securities in a Trust (generally determined by
the closing sale prices of listed Equity Securities and the bid
prices of over-the-counter traded Equity Securities) plus or minus
cash, if any, in the Capital and Income Accounts of the Trusts.
If a secondary market is not maintained, a Unit holder may redeem
Units through redemption at prices based upon the aggregate bid
price of the Treasury Obligations (if applicable) plus the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust. See "How May Units be Redeemed?"
For certain Trusts, a Unit holder tendering the minimum amount
specified in "Summary of Essential Information" appearing in Part
One for such Trust for redemption may request a distribution of
shares of Equity Securities (reduced by customary transfer and
registration charges) in lieu of payment in cash. See "How May
Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination
of the Trusts. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of a Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by
the Trustee. At least 60 days prior to the Mandatory Termination
Date the Trustee will provide written notice thereof to all Unit
holders and will include with such notice a form to enable Unit
holders to elect a distribution of shares of Equity Securities
(reduced by customary transfer and registration charges for such
Trusts) if such Unit holder owns at least that minimum amount
specified in "Summary of Essential Information," in Part One for
each Trust, rather than to receive payment in cash for such Unit
holder's pro rata share of the amounts realized upon the disposition
by the Trustee of Equity Securities. All Unit holders of a Growth
and Treasury Trust will receive their pro rata portion of the
Treasury Obligations in cash upon the termination of the Trust.
To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee,
must be returned to the Trustee at least five business days prior
to the Mandatory Termination Date. Unit holders not electing a
distribution of shares of Equity Securities will receive a cash
distribution from the sale of the remaining Securities within
a reasonable time after the Trust is terminated. See "Rights of
Unit Holders-How are Income and Capital Distributed?"
Page 2
THE FIRST TRUST SPECIAL SITUATIONS TRUST
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust (the "Trusts" and each
a "Trust") is a series of investment companies created by the
Sponsor under the name of The First Trust Special Situations Trust,
all of which are generally similar but each of which is separate
and is designated by a different series number (the "Trust").
Each Trust in the Growth and Treasury Trust Series consists of
an underlying separate unit investment trust consisting of a portfolio
of zero coupon U.S. Treasury bonds, such securities being referred
to herein as the "Treasury Obligations," and in equity securities
("Equity Securities"). Each Trust in the Equity Trust Series consists
only of common stocks. All Trusts were created under the laws
of the State of New York pursuant to a Trust Agreement (the "Indenture"),
dated the Initial Date of Deposit, with Nike Securities L.P. as
Sponsor, United States Trust Company of New York, as Trustee,
Securities Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor. See "The Trusts" in Part
Three for a more complete description of the portfolio for each
Trust.
The general objective of the Equity Trusts is to provide potential
capital appreciation and, in certain Trusts, to provide income.
The objective of the Growth and Treasury Trusts is to protect
Unit holders' capital and provide potential capital appreciation.
See "The Objective of the Trusts" in Part Three for each Trust
for a more specific description of the Trust's objective. The
Treasury Obligations in the Growth and Treasury Trusts evidence
the right to receive a fixed payment at a future date from the
U.S. Government and are backed by the full faith and credit of
the U.S. Government. The guarantee of the U.S. Government does
not apply to the market value of the Treasury Obligations or the
Units of a Growth and Treasury Trust, whose net asset value will
fluctuate and, prior to maturity, may be more or less than a purchaser's
acquisition cost. Collectively, the Treasury Obligations and Equity
Securities in each Growth and Treasury Trust are referred to herein
as the "Securities." There is, of course, no guarantee that the
objectives of the Trusts will be achieved.
The Growth and Treasury Trusts have been organized so that purchasers
of Units should receive, at the termination of a Growth and Treasury
Trust, an amount per Unit at least equal to $1.00 per Unit, or
$10.00 per Unit for certain Trusts (which is equal to the per
Unit value upon maturity of the Treasury Obligations), even if
the Equity Securities never paid a dividend and the value of the
Equity Securities in a Growth and Treasury Trust were to decrease
to zero, which the Sponsor considers highly unlikely. The receipt
of only $1.00 per Unit, or $10.00 per Unit for certain Trusts,
upon termination of a Growth and Treasury Trust (an event which
the Sponsor believes is unlikely) represents a substantial loss
on a present value basis. Furthermore, the $1.00 per Unit, or
$10.00 per Unit for certain Trusts, in no respect protects investors
against diminution in the purchasing power of their investment
due to inflation (although expectations concerning inflation are
a component in determining prevailing interest rates, which in
turn determine present values). To the extent that Units of a
Trust are redeemed, the aggregate value of the Securities in the
Trust will be reduced and the undivided fractional interest represented
by each outstanding Unit of the Trusts will increase. See "How
May Units be Redeemed?" Each Trust has a Mandatory Termination
Date as set forth under "Summary of Essential Information," appearing
in Part One for each Trust.
What are the Expenses and Charges?
At no cost to the Trusts, the Sponsor has borne all the expenses
of creating and establishing the Trusts, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. The
Sponsor will not receive any fees in connection with its activities
relating to the Trusts. However, 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" appearing in Part One for each Trust for
providing portfolio supervisory services for each Trust. Such
fee is based on the number of Units outstanding in each Trust
on January 1 of each year except for the year or years in which
the 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. The fee
Page 3
may exceed the actual costs of providing such supervisory services
for each Trust, but at no time will the total amount received
for portfolio supervisory services rendered to unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar
year exceed the aggregate cost to First Trust Advisors L.P. of
supplying such services in such year.
The Evaluator will receive a fee as indicated in the "Summary
of Essential Information" appearing in Part One for each Trust.
The Trustee pays certain expenses of the Trusts for which it is
reimbursed by the Trusts. The Trustee will receive for its ordinary
recurring services to the Trusts an annual fee as indicated in
Part One for each Trust. For a discussion of the services performed
by the Trustee pursuant to its obligations under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee's and Evaluator's fees are payable from the Income
Account of a Trust to the extent funds are available and then
from the Capital Account of a Trust. Since the Trustee has the
use of the funds being held in the Capital and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trusts is expected to result from the use of these funds.
Both 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.
The following additional charges are or may be incurred by the
Trusts: all legal and annual auditing expenses of the Trustee
incurred by or in connection with its responsibilities under the
Indenture; the expenses and costs of any action undertaken by
the Trustee to protect the Trusts 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 Trusts; 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 Trusts; all taxes and
other government charges imposed upon the Securities or any part
of the Trusts (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 Trusts. In addition, the
Trustee is empowered to sell Securities in a Trust in order to
make funds available to pay all these amounts if funds are not
otherwise available in the Income and Capital Accounts of the
Trust except that the Trustee shall not sell Treasury Obligations
in a Growth and Treasury Trust to pay Trust expenses. 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 Trusts. As described above, if dividends
are insufficient to cover expenses, it is likely that Equity Securities
will have to be sold to meet Trust expenses. These sales may result
in capital gains or losses to Unit holders. See "What is the Federal
Tax Status of Unit Holders?"
The Indenture requires a Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the Units, the Sponsor is required to bear the cost of such
annual audits to the extent such cost exceeds $.50 per 1,000 Units
if information is based on $1.00 per Unit (or per 100 Units if
$10.00 per Unit). Unit holders of a Trust covered by an audit
may obtain a copy of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
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 advisers in determining the Federal, state, local and
any other tax consequences of the purchase, ownership and disposition
of Units in the Trusts.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
Page 4
1. The Trusts are not associations taxable as corporations for
Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of a Trust under
the Code; and the income of a Trust will be treated as income
of the Unit holders thereof under the Code. Each Unit holder will
be considered to have received his pro rata share of income derived
from each Trust asset when such income is received by a Trust.
2. Each Unit holder will have a taxable event when a Trust disposes
of a Security (whether by sale, exchange, redemption, or payment
at maturity) or upon the sale or redemption of Units by such Unit
holder. The price a Unit holder pays for his Units, including
sales charges, is allocated among his pro rata portion of each
Security held by a Trust (in proportion to the fair market values
thereof on the date the Unit holder purchases his Units) in order
to determine his initial cost for his pro rata portion of each
Security held by a Trust. The Treasury Obligations held by a Growth
and Treasury Trust are treated as stripped bonds and may be treated
as bonds issued at an original issue discount as of the date a
Unit holder purchases his Units. Because the Treasury Obligations
represent interests in "stripped" U.S. Treasury bonds, a Unit
holder's initial cost for his pro rata portion of each Treasury
Obligation held by a Growth and Treasury Trust shall be treated
as its "purchase price" by the Unit holder. Original issue discount
is effectively treated as interest for Federal income tax purposes
and the amount of original issue discount in this case is generally
the difference between the bond's purchase price and its stated
redemption price at maturity. A Unit holder will be required to
include in gross income for each taxable year the sum of his daily
portions of original issue discount attributable to the Treasury
Obligations held by a Growth and Treasury Trust as such original
issue discount accrues and will in general be subject to Federal
income tax with respect to the total amount of such original issue
discount that accrues for such year even though the income is
not distributed to the Unit holders during such year to the extent
it is not less than a "de minimis" amount as determined under
a Treasury Regulation issued on December 28, 1992 relating to
stripped bonds. To the extent the amount of such discount is less
than the respective "de minimis" amount, such discount shall be
treated as zero. In general, original issue discount accrues daily
under a constant interest rate method which takes into account
the semi-annual compounding of accrued interest. In the case of
the Treasury Obligations, this method will generally result in
an increasing amount of income to the Unit holders of a Growth
and Treasury Trust each year. Unit holders should consult their
tax advisers regarding the Federal income tax consequences and
accretion of original issue discount under the stripped bond rules.
For Federal income tax purposes, a Unit holder's pro rata portion
of dividends as defined by Section 316 of the Code paid with respect
to an Equity Security held by a Trust are taxable as ordinary
income to the extent of such corporation's current and accumulated
"earnings and profits." A Unit holder's pro rata portion of dividends
paid on such Equity Security which exceed such current and accumulated
earnings and profits will first reduce a Unit holder's tax basis
in such Equity Security, and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall
generally be treated as capital gain. In general, any such capital
gain will be short term unless a Unit holder has held his Units
for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by a
Trust will generally be considered a capital gain except in the
case of a dealer or a financial institution and will be long-term
if the Unit holder has held his Units for more than one year.
A Unit holder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by a Trust will
generally be considered a capital loss except in the case of a
dealer or a financial institution and will be long-term if the
Unit holder has held his Units for more than one year. Unit holders
should consult their tax advisers regarding the recognition of
such capital gains and losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by a Trust,
including fees of the Trustee and the Evaluator.
Page 5
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by a Trust (to the extent such dividends are taxable as ordinary
income, as discussed above), and are attributable to domestic
corporations in the same manner as if such corporation directly
owned the Equity Securities paying such dividends. However, a
corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Proposed regulations have been issued which address
special rules that must be considered in determining whether the
46 day holding requirement is met. Moreover, the allowable percentage
of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends
received deduction.
To the extent dividends received by a Trust are attributable to
foreign corporations, a corporation that owns Units will not be
entitled to the dividends received deduction with respect to its
pro rata portion of such dividends, since the dividends received
deduction is generally available only with respect to dividends
paid by domestic corporations.
Recognition of Taxable Gain or Loss Upon Disposition of Securities
by a Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when a Security is
disposed of by a Trust or if the Unit holder disposes of a Unit.
For taxpayers other than corporations, net capital gains are subject
to a maximum marginal tax rate of 28%. However, it should be noted
that legislative proposals are introduced from time to time that
affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raises
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the
Tax Act includes a provision that would recharacterize capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions
entered into after April 30, 1993. Unit holders and prospective
investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Termination
of a Trust or Upon Redemption of Units (for Certain Trusts). As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns
at least that minimum amount specified in "Summary of Essential
Information" in Part One for each Trust may request an In-Kind
Distribution upon the termination of a Trust. Furthermore, for
Equity Trusts, a Unit holder who owns at least that minimum amount
specified in "Summary of Essential Information" in Part One for
such Trusts may request an In-Kind Distribution upon the redemption
of Units or the termination of a Trust. The Unit holder requesting
an In-Kind Distribution will be liable for expenses related thereto
(the "Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See
"Rights of Unit Holders-How are Income and Capital Distributed?"
Treasury Obligations held by a Growth and Treasury Trust will
not be distributed to a Unit holder as part of an In-Kind Distribution.
The tax consequences relating to the sale of Treasury Obligations
are discussed above. As previously discussed, prior to the termination
of a Trust, a Unit holder is considered as owning a pro rata portion
of each of the Trust assets for Federal income tax purposes. The
receipt of an In-Kind Distribution upon the redemption of Units
(for Equity Trusts) or the termination of a Trust would be deemed
an exchange of such Unit holder's pro rata portion of each of
the shares of stock and other assets held by a Trust in exchange
for an undivided interest in whole shares of stock plus, possibly,
cash.
There are generally three different potential tax consequences
which may occur under an In-Kind Distribution with respect to
each Security owned by a Trust. A "Security" for this purpose
is a particular class of stock issued by a particular corporation
(and does not include the Treasury Obligations in Growth and Treasury
Page 6
Trusts). If the Unit holder receives only whole shares of a Security
in exchange for his or her pro rata portion in each share of such
Security held by a Trust, there is no taxable gain or loss recognized
upon such deemed exchange pursuant to Section 1036 of the Code.
If the Unit holder receives whole shares of a particular Security
plus cash in lieu of a fractional share of such Security, and
if the fair market value of the Unit holder's pro rata portion
of the shares of such Security exceeds his tax basis in his pro
rata portion of such Security, taxable gain would be recognized
in an amount not to exceed the amount of such cash received, pursuant
to Section 1031(b) of the Code. No taxable loss would be recognized
upon such an exchange pursuant to Section 1031(c) of the Code,
whether or not cash is received in lieu of a fractional share.
Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unit holder's
tax basis in the shares of such particular Security which he receives
as part of the In-Kind Distribution. Finally, if a Unit holder's
pro rata interest in a Security does not equal a whole share,
he may receive entirely cash in exchange for his pro rata portion
of a particular Security. In such case, taxable gain or loss is
measured by comparing the amount of cash received by the Unit
holder with his tax basis in such Security.
Because a Trust will own many Securities, a Unit holder who requests
an In-Kind Distribution will have to analyze the tax consequences
with respect to each Security owned by a Trust. In analyzing the
tax consequences with respect to each Security, such Unit holder
must allocate the Distribution Expenses among the Securities (the
"Allocable Expenses"). The Allocable Expenses will reduce the
amount realized with respect to each Security so that the fair
market value of the shares of such Security received (if any)
and cash received in lieu thereof (as a result of any fractional
shares) by such Unit holder should equal the amount realized for
purposes of determining the applicable tax consequences in connection
with an In-Kind Distribution. A Unit holder's tax basis in shares
of such Security received will be increased by the Allocable Expenses
relating to such Security. The amount of taxable gain (or loss)
recognized upon such exchange will generally equal the sum of
the gain (or loss) recognized under the rules described above
by such Unit holder with respect to each Security owned by a Trust.
Unit holders who request an In-Kind Distribution are advised to
consult their tax advisers in this regard.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by a Trust to such
Unit holder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by
a Trust (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 (accrual of original issue discount on the Treasury Obligations
in Growth and Treasury Trusts may not be subject to taxation or
withholding provided certain requirements are met). Such persons
should consult their tax advisers.
It should be noted that payments to the Trusts of dividends on
Equity Securities that are attributable to foreign corporations
may be subject to foreign withholding taxes and Unit holders should
consult their tax advisers regarding the potential tax consequences
relating to the payment of any such withholding taxes by the Trusts.
Any dividends withheld as a result thereof will nevertheless be
treated as income to the Unit holders. Because, under the grantor
trust rules, an investor is deemed to have paid directly his share
of foreign taxes that have been paid or accrued, if any, an investor
may be entitled to a foreign tax credit or deduction for United
States tax purposes with respect to such taxes. Investors should
consult their tax advisers with respect to foreign withholding
taxes and foreign tax credits.
Unit holders will be notified annually of the amounts of original
issue discount and income dividends includable in the Unit holder's
gross income and amounts of Trust expenses which may be claimed
as itemized deductions.
Dividend income, long-term capital gains and accrual of original
issue discount may also be subject to state and local taxes. Investors
should consult their tax advisers for specific information on
the tax consequences of particular types of distributions.
Page 7
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trusts for New York tax matters, under the existing income
tax laws of the State of New York, the Trusts are not associations
taxable as corporations and the income of the Trusts will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Treasury Obligations?
The Treasury Obligations deposited in the Growth and Treasury
Trusts consist of U.S. Treasury bonds which have been stripped
of their unmatured interest coupons. The Treasury Obligations
evidence the right to receive a fixed payment at a future date
from the U.S. Government, and are backed by the full faith and
credit of the U.S. Government. Treasury Obligations are purchased
at a deep discount because the buyer obtains only the right to
a fixed payment at a fixed date in the future and does not receive
any periodic interest payments. The effect of owning deep discount
bonds which do not make current interest payments (such as the
Treasury Obligations) is that a fixed yield is earned not only
on the original investment, but also, in effect, on all earnings
during the life of the discount obligation. This implicit reinvestment
of earnings at the same rate eliminates the risk of being unable
to reinvest the income on such obligations at a rate as high as
the implicit yield on the discount obligation, but at the same
time eliminates the holder's ability to reinvest at higher rates
in the future. For this reason, the Treasury Obligations are subject
to substantially greater price fluctuations during periods of
changing interest rates than are securities of comparable quality
which make regular interest payments. The effect of being able
to acquire the Treasury Obligations at a lower price is to permit
more of a Growth and Treasury Trust's portfolio to be invested
in Equity Securities.
What are Equity Securities?
Each Trust contains different issues of Equity Securities as described
in "The Trusts" in Part Three for each Trust and "Schedule of
Investments" appearing in Part One for each Trust. An investment
in Units of the Trusts should be made with an understanding of
the risks such an investment may entail. Although actions have
been taken to provide diversified portfolios of Equity Securities,
some inherent risks exist due to the concentration in certain
Trusts of the Equity Securities within a specific country, state
or geographic area or within specific industries, although a number
of companies have significant business activities outside the
specific country, state or geographic area. Unpredictable factors
include governmental, political, economic and fiscal policies
of the specific country, state, geographic area or industry which
may have an adverse effect on the performance of the issuers which
have significant business activities within the specific country,
state, geographic area or industry. In addition, regional influences
may affect the performance of the issuers, particularly if an
economic downturn or contraction occurs throughout the area. See
"Portfolio" in Part Three for each Trust for additional considerations
for investors, if applicable.
The Trust consists of such of the Securities listed under "Schedule
of Investments" appearing in Part One for each Trust as may continue
to be held from time to time in the Trust together with cash held
in the Income and Capital Accounts. Neither the Sponsor nor the
Trustee shall be liable in any way for any failure in any of the
Securities.
Page 8
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
Trusts will retain for any length of time their present size and
composition. Although a Portfolio is not managed, the Sponsor
may instruct the Trustee to sell Equity Securities under certain
limited circumstances. In certain circumstances involving mergers
or other similar transactions, the Trustee is required to sell
Equity Securities. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired
in connection with a merger or other transaction. If offered such
new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by a Trust, they may be accepted for deposit
in such Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Securities be
Removed from the Trusts?" Equity Securities, however, will not
be sold by a Trust to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation.
Since certain of the Equity Securities in the Trusts may consist
of securities of foreign issuers, an investment in these Trusts
involves some investment risks that are different in some respects
from an investment in a trust that invests entirely in securities
of domestic issuers. Those investment risks include future political
and governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Equity
Securities. In addition, for the foreign issuers that are not
subject to the reporting requirements of the Securities Exchange
Act of 1934, there may be less publicly available information
than is available from a domestic issuer. Also, foreign issuers
are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable
to those applicable to domestic issuers. However, due to the nature
of the issuers of Equity Securities included in the Trusts, the
Sponsor believes that adequate information will be available to
allow the Portfolio Supervisor to provide portfolio surveillance.
The securities of certain of the foreign issuers in the Trusts
are in ADR form. ADRs evidence American Depositary Receipts which
represent common stock deposited with a custodian in a depositary.
American Depositary Shares, and receipts therefor (ADRs), are
issued by an American bank or trust company to evidence ownership
of underlying securities issued by a foreign corporation. These
instruments may not necessarily be denominated in the same currency
as the securities into which they may be converted. For purposes
of the discussion herein, the term ADR generally includes American
Depositary Shares.
ADRs may be sponsored or unsponsored. In an unsponsored facility,
the depositary initiates and arranges the facility at the request
of market makers and acts as agent for the ADR holder, while the
company itself is not involved in the transaction. In a sponsored
facility, the issuing company initiates the facility and agrees
to pay certain administrative and shareholder-related expenses.
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary;
unsponsored facilities involve several depositaries with no contractual
relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon
issuance and cancellation of the ADR. This fee would be in addition
to the brokerage commissions paid upon the acquisition or surrender
of the security. In addition, the depositary bank incurs expenses
in connection with the conversion of dividends or other cash distributions
paid in local currency into U.S. dollars and such expenses are
deducted from the amount of the dividend or distribution paid
to holders, resulting in a lower payout per underlying share represented
by the ADR than would be the case if the underlying share were
held directly. Certain tax considerations, including tax rate
differentials and withholding requirements, arising from applications
of the tax laws of one nation to nationals of another and from
certain practices in the ADR market may also exist with respect
to certain ADRs. In varying degrees, any or all of these factors
may affect the value of the ADR compared with the value of the
underlying shares in the local market. In addition, the rights
of holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid
than that for the underlying shares. ADRs are registered securities
pursuant to the
Page 9
Securities Act of 1933 and may be subject to the reporting requirements
of the Securities Exchange Act of 1934.
For those Equity Securities that are ADRs, currency fluctuations
will affect the U.S. dollar equivalent of the local currency price
of the underlying domestic share and, as a result, are likely
to affect the value of the ADRs and consequently the value of
the Equity Securities. The foreign issuers of securities that
are ADRs may pay dividends in foreign currencies which must be
converted into dollars. Most foreign currencies have fluctuated
widely in value against the United States dollar for many reasons,
including supply and demand of the respective currency, the soundness
of the world economy and the strength of the respective economy
as compared to the economies of the United States and other countries.
Therefore, for any securities of issuers (whether or not they
are in ADR form) whose earnings are stated in foreign currencies,
or which pay dividends in foreign currencies or which are traded
in foreign currencies, there is a risk that their United States
dollar value will vary with fluctuations in the United States
dollar foreign exchange rates for the relevant currencies.
On the basis of the best information available to the Sponsor
at the present time, none of the Equity Securities are subject
to exchange control restrictions under existing law which would
materially interfere with payment to the Trusts of dividends due
on, or proceeds from the sale of, the Equity Securities. However,
there can be no assurance that exchange control regulations might
not be adopted in the future which might adversely affect payment
to the Trusts. In addition, the adoption of exchange control regulations
and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trusts and on
the ability of the Trusts to satisfy their obligation to redeem
Units tendered to the Trustee for redemption.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the
same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. The value of common stocks
is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities
in a Portfolio may be expected to fluctuate over the life of a
Trust to values higher or lower than those prevailing on a Unit
holder's purchase date.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
Page 10
Whether or not the Equity Securities are listed on a national
securities exchange, the principal trading market for the Equity
Securities may be in the over-the-counter market. As a result,
the existence of a liquid trading market for the Equity Securities
may depend on whether dealers will make a market in the Equity
Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. The investigation by the Securities
and Exchange Commission of illegal insider trading in connection
with corporate takeovers, and possible congressional inquiries
and legislation relating to this investigation, may adversely
affect the ability of certain dealers to remain market makers.
In addition, the Trusts 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 Trusts, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
Unit holders will be unable to dispose of any of the Equity Securities
in a Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in a Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in a Trust.
The value of the Equity Securities, like the value of the Treasury
Obligations in Growth and Treasury Trusts, will fluctuate over
the life of a 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. However, the Sponsor believes that, upon termination
of a Growth and Treasury Trust, even if the Equity Securities
deposited in the Trust are worthless, an event which the Sponsor
considers highly unlikely, the Treasury Obligations will provide
sufficient principal to at least equal $1.00 per Unit, or $10.00
per Unit for certain Growth and Treasury Trusts (which is equal
to the per Unit value upon maturity of the Treasury Obligations).
This feature of the Growth and Treasury Trusts provides Unit holders
with principal protection, although they might forego any earnings
on the amount invested. To the extent that Units are purchased
at a price less than $1.00 per Unit (or less than $10.00 per Unit
for certain Trusts) this feature may also provide a potential
for capital appreciation.
Unless a Unit holder purchases Units of a Growth and Treasury
Trust on a date when the value of the Units is $1.00 or less (or
$10.00 or less for certain Trusts), total distributions, including
distributions made upon termination of the Trust, may be less
than the amount paid for a Unit.
The Trustee will have no power to vary the investments of the
Trusts, 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 Securities only under limited circumstances.
See "How May Securities be Removed from the Trusts?"
To the best of the Sponsor's knowledge, there is no litigation
pending as of the date of this Part Two Prospectus in respect
of any Security which might reasonably be expected to have a material
adverse effect on the Trusts. Litigation may be instituted on
a variety of grounds with respect to the Securities. The Sponsor
is unable to predict whether any such litigation will be instituted,
or if instituted, whether such litigation might have a material
adverse effect on the Trusts. See Part Three for additional considerations,
if applicable.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate bid side evaluation of the Treasury
Obligations (if applicable) and the aggregate underlying value
of the Equity Securities in the Trust, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust, plus the
applicable sales charge.
From time to time the Sponsor may implement programs under which
underwriters and dealers of a Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period.
Page 11
The Public Offering Price of Units on the date of this Part Two
Prospectus may vary from the amount stated under "Summary of Essential
Information" appearing in Part One for each Trust in accordance
with fluctuations in the prices of the underlying Securities.
The aggregate value of the Units of a Trust shall be determined
(a) on the basis of the bid prices of the Treasury Obligations
(if applicable) and the aggregate underlying value of the Equity
Securities therein plus or minus cash, if any, in the Income and
Capital Accounts of a Trust, (b) if bid prices are not available
for the Treasury Obligations (if applicable), on the basis of
bid prices for comparable securities, (c) by determining the value
of the Treasury Obligations (if applicable) on the bid side of
the market by appraisal, or (d) by any combination of the above.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
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 the exchange, the evaluation shall generally be based on the
current bid price 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.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made five 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.
See "Public Offering" in Part Three for additional information
for each Trust.
How are Units Distributed?
Units repurchased in the secondary market may be offered by this
Part Two Prospectus at the secondary market public offering price
determined in the manner described above.
The Sponsor reserves the right to change the amount of the concession
or agency commission from time to time. Certain commercial banks
may be making Units of the Trusts 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. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Units; however,
the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular
agency transactions are not permitted under such Act. In Texas
and in certain other states, any banks making Units available
must be registered as broker/dealers under state law.
What are the Sponsor's Profits?
In maintaining a market for the Units, the Sponsor will realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a sales charge as indicated
in Part One for each Trust) or redeemed. The secondary market
public offering price of Units may be greater or less than the
cost of such Units to the Sponsor.
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 five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
Page 12
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder
and will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee
will send to the registered owner of Units a written initial transaction
statement containing a description of the Trust; the number of
Units issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted
interest) received with respect to any of the Securities in a
Trust on or about the Income Distribution Dates to Unit holders
of record on the preceding Income Record Date. See "Summary of
Essential Information" appearing in Part One for each Trust. Persons
who purchase Units will commence receiving distributions only
after such person becomes a record owner. Notification to the
Trustee of the transfer of Units is the responsibility of the
purchaser, but in the normal course of business such notice is
provided by the selling broker-dealer. The pro rata share of cash
in the Capital Account of each Trust will be computed as of the
date indicated in Part One for each Trust. Capital Account distributions
to the Unit holders of record of a Trust as of the date indicated
in Part One for each Trust will be made on the date indicated
in Part One for each Trust. The Trustee is not required to pay
interest on funds held in the Capital Account of a Trust (but
may itself earn interest thereon and therefore benefit from the
use of such funds) nor to make a distribution from the Capital
Account of a Trust unless the amount available for distribution
shall equal at least $1.00 per 1000 Units (if $1.00 per Unit)
or $1.00 per 100 Units (if $10.00 per Unit). Proceeds received
on the sale of any Securities in a Trust, to the extent not used
to meet redemptions of Units or pay expenses, will however be
distributed to Unit holders of record as indicated in Part One
for each Trust. Income with respect to the original issue discount
on the Treasury Obligations in a Growth and Treasury Trust will
not be distributed currently, although Unit holders will be subject
to Federal income tax as if a distribution had occurred. See "What
is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by a Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder under certain circumstances by contacting the Trustee,
otherwise the amount may be recoverable only when filing a tax
return. Under normal circumstances
Page 13
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 a Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive:
(i) the pro rata share of the amounts realized upon the disposition
of Equity Securities, unless he elects an In-Kind Distribution
as described below, (ii) a pro rata share of the amounts realized
upon the disposition of the Treasury Obligations (if applicable)
and (iii) a pro rata share of any other assets of the Trust, less
expenses of the Trust, subject to the limitation that Treasury
Obligations (if applicable) may not be sold to pay for Trust expenses.
Not less than 60 days prior to the Mandatory Termination Date
the Trustee will provide written notice thereof to all Unit holders
and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Equity Securities (an "In-Kind
Distribution"), if such Unit holder owns at least that minimum
amount as set forth in "Summary of Essential Information" in Part
One for each Trust, rather than to receive payment in cash for
such Unit holder's pro rata share of the amounts realized upon
the disposition by the Trustee of Equity Securities. An In-Kind
Distribution will be reduced by customary transfer and registration
charges. To be effective, the election form, together with surrendered
certificates and other documentation required by the Trustee,
must be returned to the Trustee at least five business days prior
to the Mandatory Termination Date. Not less than 60 days prior
to the termination of the Trust, those Unit holders with at least
that minimum amount as set forth in "Summary of Essential Information"
in Part One for each Trust, will be offered the option of having
the proceeds from the Equity Securities distributed "In-Kind,"
or they will be paid in cash, as indicated above. A Unit holder
may, of course, at any time after the Equity Securities are distributed,
sell all or a portion of the shares.
The Trustee will credit to the Income Account of a Trust any dividends
received on the Equity Securities therein. All other receipts
(e.g. return of principal, capital gains, etc.) are credited to
the Capital Account of a Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 1,000 Units if $1.00
per Unit (or per 100 Units if $10.00 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 Securities sold during the year and the
Securities held at the end of such year by the Trust; (3) the
redemption price per 1,000 Units if $1.00 per Unit (or per 100
Units if $10.00 per Unit) based upon a computation thereof on
the 31st day of December of such year (or the last business day
prior thereto); and (4) amounts of income and capital distributed
during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trusts furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate 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 seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
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
Page 14
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, except
that as regards Units received after 4:00 p.m. Eastern 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.
For Equity Trusts, any Unit holder tendering at least the minimum
amount specified in "Summary of Essential Information" appearing
in Part One for each Trust for redemption may request by written
notice submitted at the time of tender from the Trustee in lieu
of a cash redemption a distribution of shares of Equity Securities
in an amount and value of Equity Securities per Unit equal to
the Redemption Price Per Unit as determined as of the evaluation
next following tender. To the extent possible, in-kind distributions
("In-Kind Distributions") shall be made by the Trustee through
the distribution of each of the Equity Securities in book-entry
form to the account of the Unit holder's bank or broker-dealer
at the Depository Trust Company. An In-Kind Distribution will
be reduced by customary transfer and registration charges. The
tendering Unit holder will receive his pro rata number of whole
shares of each of the Equity Securities comprising the portfolio
and cash from the Capital Account equal to the fractional shares
to which the tendering Unit holder is entitled. The Trustee may
adjust the number of shares of any issue of Equity Securities
included in a Unit holder's In-Kind Distribution to facilitate
the distribution of whole shares, such adjustment to be made on
the basis of the value of Equity Securities on the date of tender.
If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unit holder, the Trustee
may sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number
in the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be recovered
by the Unit holder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder
elects to tender Units for redemption, such Unit holder should
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 must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of a Trust to the extent that funds are
available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of a Trust.
The Trustee is empowered to sell Securities of a Trust in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might
otherwise be realized. For Growth and Treasury Trusts, Equity
Securities will be sold to meet redemptions of Units before Treasury
Obligations, although Treasury Obligations may be sold if the
Growth and Treasury Trust is assured of retaining a sufficient
principal amount of Treasury Obligations to provide funds upon
maturity of the Trust at least equal to $1.00 per Unit, or $10.00
per Unit for certain Trusts.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Treasury Obligations (if applicable) and the
aggregate underlying value of the Equity Securities in the Trust,
plus or minus cash, if any, in the Income and Capital Accounts
of a Trust, as of the close of trading on the New York Stock Exchange
(4:00 p.m. Eastern time) on the date any such determination is
made. The Redemption Price per Unit is the pro rata share of each
Unit determined by the Trustee by adding: (1) the cash on hand
in a Trust; (2) the aggregate value of the Securities held in
a Trust, as determined by the Evaluator on the basis of bid prices
of the Treasury Obligations (if applicable) and the aggregate
underlying value of the Equity Securities in a Trust next computed;
and (3) dividends receivable on 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 a Trust; (2) an amount representing estimated accrued expenses
of a Trust, including but not limited to fees and expenses of
Page 15
the Trustee (including legal and auditing fees), the Evaluator
and supervisory fees, if any; (3) cash held for distribution to
Unit holders of record of a Trust as of the business day prior
to the evaluation being made; and (4) other liabilities incurred
by a Trust; and finally dividing the results of such computation
by the number of Units of the Trust outstanding as of the date
thereof.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
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 the exchange, the evaluation shall generally be based on the
current bid price 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 right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee on the same business day and
by making payment therefor to the Unit holder not later than the
day on which the Units would otherwise have been redeemed by the
Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does
not purchase Units, the Trustee may sell Units tendered for redemption
in the over-the-counter market, if any, as long as the amount
to be received by the Unit holder is equal to the amount he would
have received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Securities be Removed from the Trusts?
The Portfolio of each 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 of its outstanding obligations, that the
price of the Equity Security has declined to such an extent or
other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to a Trust. Treasury Obligations in Growth and Treasury Trusts
may be sold by the Trustee only pursuant to the liquidation of
a Growth and Treasury Trust or to meet redemption requests. 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
Page 16
in connection with a merger or other transaction. If offered such
new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by a Trust, they may be accepted for deposit
in such Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). Proceeds from the sale of
Securities by the Trustee are credited to the Capital Account
of a Trust for distribution to Unit holders or to meet redemptions.
The Trustee may also sell Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose
of redeeming Units of the Trust tendered for redemption and the
payment of expenses; provided, however, that in the case of Securities
sold to meet redemption requests, Treasury Obligations in Growth
and Treasury Trusts may only be sold if the Trust is assured of
retaining a sufficient principal amount of Treasury Obligations
to provide funds upon maturity of a Growth and Treasury Trust
at least equal to $1.00 per Unit, or $10.00 per Unit for certain
Trusts. Treasury Obligations may not be sold by the Trustee to
meet Trust 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 a Trust, it may be necessary for the Sponsor to
specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds, 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 $7.5 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 (708) 241-4141.
As of August 31, 1993, the total partners' capital of Nike Securities
L.P. was $14,270,063 (unaudited). (This paragraph relates only
to the Sponsor and not to the Trusts or to any series thereof
or to any other Underwriter. 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 United States Trust Company of New York with its
principle place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
a Trust may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Securities. For information relating to
the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of
Page 17
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 Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of a 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 Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187. 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
Page 18
to make such other provisions as shall not adversely affect the
interest of the Unit holders (as determined in good faith by the
Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Treasury Obligations
held in a Growth and Treasury Trust, but in no event beyond the
Mandatory Termination Date indicated in Part One for each Trust
under "Summary of Essential Information." A Trust may be liquidated
at any time by consent of 100% of the Unit holders of the Trust,
by the Trustee in the event that Units of a Trust not yet sold
aggregating more than 60% of the Units of the Trust are tendered
for redemption by an Underwriter, including the Sponsor or, for
Equity Trusts, by the Trustee when the principal amount of the
Equity Securities owned by a Trust as shown by any evaluation,
is less than the amount specified in Part One for each Trust.
If a Trust is liquidated because of the redemption of unsold Units
of the Trust by an Underwriter, the Sponsor will refund to each
purchaser of Units of the Trust the entire sales charge and the
transaction fees paid by such purchaser. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit
holders of a Trust. Within a reasonable period after termination,
the Trustee will follow the procedures set forth under "How are
Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of a
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of a Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his address appearing on
the registration books of a Trust maintained by the Trustee. At
least 60 days prior to the Mandatory Termination Date the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (reduced by customary
transfer and registration charges), if such Unit holder owns at
least that minimum amount specified in "Summary of Essential Information"
in Part One for each Trust, rather than receiving payment in cash
for such Unit holder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. For
Growth and Treasury Trusts, all Unit holders will receive their
pro rata portion of the Treasury Obligations in cash upon the
termination of a Trust. To be effective, the election form, together
with surrendered certificates and other documentation required
by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date. Unit holders
not electing a distribution of shares of Equity Securities will
receive a cash distribution from the sale of the remaining Securities
within a reasonable time after a Trust is terminated. Regardless
of the distribution involved, the Trustee will deduct from the
funds of the Trust any accrued costs, expenses, advances or indemnities
provided by the Trust Agreement, including estimated compensation
of the Trustee and costs of liquidation and any amounts required
as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Securities in a Trust
upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. The Trustee
will then distribute to each Unit holder his pro rata share of
the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trust.
Experts
The financial statements of the various Series of the Trust appearing
in Part One of this Prospectus and Registration Statement have
been audited by Ernst & Young, independent auditors, as set forth
in their reports thereon appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such
reports given upon the authority of such firm as experts in accounting
and auditing.
Page 19
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
The First Trust Special Situations Trust:
What is The First Trust Special Situations Trust? 3
What are the Expenses and Charges? 3
What is the Federal Tax Status of Unit Holders? 4
Why are Investments in the Trust Suitable for
Retirement Plans? 8
Portfolio:
What are Treasury Obligations? 8
What are Equity Securities? 8
What are Some Additional Considerations for
Investors? 11
Public Offering:
How is the Public Offering Price Determined? 11
How are Units Distributed? 12
What are the Sponsor's Profits? 12
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 12
How are Income and Capital Distributed? 13
What Reports will Unit Holders Receive? 14
How May Units be Redeemed? 14
How May Units be Purchased by the Sponsor? 16
How May Securities be Removed from the Trusts? 16
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 17
Who is the Trustee? 17
Limitations on Liabilities of Sponsor and Trustee 18
Who is the Evaluator? 18
Other Information:
How May the Indenture be Amended or
Terminated? 18
Legal Opinions 19
Experts 19
</TABLE>
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE FUND HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST
The First Trust
Special Situations Trust
Prospectus
Part Two
January 14, 1994
First Trust
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 20
Total Growth & Treasury Securities Trust,
Upper Midwest Series
The First Trust (registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated June 27, 1994 PART ONE AND PART TWO
The Trusts. The Trusts consist of zero coupon U.S. Treasury bonds
and common stocks issued by companies incorporated or headquartered
in the States of Minnesota, Wisconsin, Iowa and Nebraska (the
"Upper Midwest"), except up to 10% of the original portfolio at
the Initial Date of Deposit may consist of equity securities outside
this region. See "Schedule of Investments" appearing in Part One
for each Trust.
The Objective of the Trusts. The objective of each Trust is to
protect Unit holders' capital and provide for potential income
and capital appreciation by investing a portion of each portfolio
in zero coupon U.S. Treasury bonds ("Treasury Obligations"), and
the remainder of a Trust's portfolio in common stocks issued by
companies in the Upper Midwest, except up to 10% of the original
portfolio at the Initial Date of Deposit may consist of equity
securities outside of this region ("Equity Securities"). There
is, of course, no guarantee that the objective of the Trusts will
be achieved.
Portfolio. The Trusts contain different issues of Equity Securities,
all of which may be issued by companies incorporated or headquartered
in the Upper Midwest and are listed on a national securities exchange
or the NASDAQ National Market System or are traded in the over-the-counter
market. Each of the companies whose Equity Securities are included
in a portfolio, in the view of the Sponsor, has significant ties
with the Upper Midwest. However, up to 10% of the original portfolio
at the Initial Date of Deposit may consist of equity securities
outside this region. Each of the Upper Midwest companies is incorporated
or has its corporate headquarters in one of the states of the
Upper Midwest and each Upper Midwest company provides economic
contributions to such state through employment and the payment
of taxes. Although certain Upper Midwest companies have domestic
and international operations, each has close business and economic
ties which are important to the Upper Midwest.
An investment in Units of a Trust should be made with an understanding
of the risks such an investment may entail. Although actions have
been taken to provide a diversified portfolio of Equity Securities,
some inherent risks exist due to the concentration of the Equity
Securities within the Upper Midwest, although a number of companies
have significant business activities outside the Upper Midwest.
Unpredictable factors include governmental, political, economic
and fiscal policies of the Upper Midwest which may have an adverse
effect on the performance of the issuers which have significant
business activities within the Upper Midwest. In addition, regional
influences may affect the performance of the issuers, particularly
if an economic downturn or contraction occurs throughout the Upper
Midwest.
ALL PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE
REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1
Public Offering. The applicable sales charge is reduced by a discount
as indicated below for volume purchases:
<TABLE>
<CAPTION>
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
_______________ __________ __________
<S> <C> <C>
10,000 but less than 25,000 0.30% 0.3009%
25,000 but less than 50,000 0.60% 0.6036%
50,000 but less than 75,000 0.90% 0.9082%
75,000 but less than 100,000 1.30% 1.3171%
100,000 or more 2.00% 2.0408%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling underwriter or dealer. 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 underwriter or 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 Underwriter or dealer of
any such combined purchase prior to the sale in order to obtain
the indicated discount. In addition, with respect to the employees,
officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law,
and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor and the Underwriters and their subsidiaries,
the sales charge is reduced by 4.1% of the Public Offering Price.
Page 2
Total Growth & Treasury Securities Trust,
Upper Midwest Series
The First Trust (registered trademark) Special Situations Trust
PART THREE PROSPECTUS
Must be Accompanied by Parts One and Two
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: United States Trust Company of New York
770 Broadway
New York, New York 10003
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
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.
PLEASE RETAIN ALL PARTS OF THIS PROSPECTUS FOR FUTURE REFERENCE
Page 3
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES
8 TOTAL GROWTH & TREASURY SECURITIES TRUST, SERIES 1 UPPER
MIDWEST SERIES 1, certifies that it meets all of the requirements
for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment of its Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized
in the Village of Lisle and State of Illinois on July 1, 1994.
THE FIRST TRUST SPECIAL SITUATIONS TRUST,
SERIES 8
TOTAL GROWTH & TREASURY SECURITIES TRUST,
SERIES 1 UPPER MIDWEST SERIES 1
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title Date
Robert D. Van Kampen Sole Director of )
Nike Securities )
Corporation, ) July 1, 1994
the General Partner )
of Nike Securities L.P. )
)
) Carlos E. Nardo
) Attorney-in-Fact**
*The title of the person named herein represents his capacity in
and relationship to Nike Securities L.P., Depositor.
**An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Special Situations Trust, Series 18 (File No. 33-42683) and
the same is hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated May 20, 1994 in this
Post-Effective Amendment to the Registration Statement and
related Prospectus of The First Trust Special Situations Trust
dated June 21, 1994.
ERNST & YOUNG
Chicago, Illinois
June 20, 1994
