File No. 33-69828
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 80
SUNBELT GROWTH AND TREASURY SECURITIES TRUST, SERIES 3
(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 : January 31, 1997
: : 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
November 14, 1996.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
168,718 UNITS
PROSPECTUS
Part One
Dated January 28, 1997
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two and Part Three
The Trust
The Sunbelt Growth & Treasury Securities Trust, Series 3 (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 Alabama, Arkansas, Florida,
Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and
Texas (the "Sunbelt") except up to 10% of the original portfolio on the
Initial Date of Deposit may consist of equity securities outside the region.
At December 16, 1996, each Unit represented a 1/168,718 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 5.5% of the Public
Offering Price (5.820% of the net amount invested) excluding income and
principal cash. At December 16, 1996, the Public Offering Price per 100 Units
was $1,144.55 (see "Public Offering" in Part Two). The minimum purchase is
$1,000.
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 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 16, 1996
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Aggregate Maturity Value of Treasury Obligations in the Trust $1,704,000
Number of Units 168,718
Fractional Undivided Interest in the Trust per Unit 1/168,718
Public Offering Price:
Aggregate Value of Securities in the Portfolio $1,830,903
Aggregate Value of Securities per 100 Units $1,085.19
Income and Principal cash (overdraft) in the Portfolio $(6,419)
Income and Principal cash (overdraft) per 100 Units $(3.80)
Sales Charge 5.820% (5.5% of Public Offering Price,
excluding income and principal cash) $63.16
Public Offering Price per 100 Units $1,144.55
Redemption Price and Sponsor's Repurchase Price per 100
Units ($63.16 less than the Public Offering Price per
100 Units) $1,081.39
</TABLE>
Date Trust Established October 21, 1993
Mandatory Termination Date May 15, 2006
Evaluator's Annual Fee: $.30 per 100 Units outstanding. 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 Maximum of $.25 per 100
an affiliate of the Sponsor Units outstanding annually
Trustee's Annual Fee: $.90 per 100 Units outstanding.
Capital Distribution Record Date and Distribution Date: Distributions from
the Capital Account will be made monthly payable on the last day of the month
to Unit holders of record on the fifteenth day of such month if the amount
available for distribution equals at least $1.00 per 100 Units.
Notwithstanding, distributions of funds in the Capital Account, if any, will
be made in December of each year.
Income Distribution Record Date: Fifteenth day of each June and December.
Income Distribution Date: Last day of each June and December.
A Unit holder who owns at least 2,500 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 80,
Sunbelt Growth & Treasury Securities
Trust, Series 3
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of The First Trust Special Situations Trust, Series
80, Sunbelt Growth & Treasury Securities Trust, Series 3 as of September 30,
1996, 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, October 21, 1993, to September 30, 1994. These
financial statements are the responsibility of the Trust's Sponsor. 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 September 30, 1996,
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, 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 80, Sunbelt Growth & Treasury Securities Trust,
Series 3 at September 30, 1996, 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, October 21, 1993, to September
30, 1994, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 3, 1997
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, including accretion
on the treasury obligations, $1,738,001)
(Note 1) $1,898,632
Dividends receivable 901
__________
1,899,533
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Cash overdraft 7,508
Accrued liabilities 602
__________
8,110
__________
Net assets, applicable to 176,256 outstanding
units of fractional undivided interest:
Cost of Trust assets, including accretion
on the treasury obligations (Note 1) $1,738,001
Net unrealized appreciation (Note 2) 160,631
Distributable funds (deficit) (7,209)
__________
$1,891,423
==========
Net asset value per 100 units $1,073.11
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
PORTFOLIO - See notes to portfolio.
September 30, 1996
<TABLE>
<CAPTION>
Maturity Market
value Name of Issuer and Title of Security value
<C> <S> <C>
"Zero coupon" U.S. Treasury bonds
$1,777,000 (1) maturing May 15, 2006 $927,720
==========
</TABLE>
<TABLE>
<CAPTION>
Number of
Shares Name of Issuer of Equity Securities
<C> <S> <C>
1,622 (2) AFLAC, Inc. $57,581
1,459 American Freightways Corporation 12,949
2,060 Apple South, Inc. 27,295
896 Atlantic Southeast Airlines, Inc. 19,712
1,266 (3) Barnett Banks, Inc. 42,727
993 Brinker International, Inc. 16,881
1,108 Browning-Ferris Industries, Inc. 27,700
1,277 Catherine's Stores Corporation 9,258
1,964 (3) CompUSA, Inc. 106,056
1,017 Cracker Barrel Old Country Store, Inc. 23,137
826 Disney (Walt) & Company 52,348
393 Federal Express Corporation 31,145
762 Home Depot, Inc. 43,339
997 Hunt (J.B.) Transport Services, Inc. 15,703
1,778 (4) Johnson & Johnson 91,123
1,173 M.S. Carriers, Inc. 22,287
1,549 Nelson (Thomas), Inc. 16,845
876 Regions Financial Corp. 42,158
1,956 SCI Systems, Inc. 110,025
1,049 Shaw Industries, Inc. 14,030
939 Shoney's, Inc. 8,568
936 Sysco Corporation 31,473
964 Tyson Foods, Inc. (Class A) 25,666
72 Viacom, Inc. (Class A) 2,538
596 Viacom, Inc. (Class B) 21,158
1,220 Wal-Mart Stores, Inc. 32,178
3,136 (3) WorldCom Inc. 67,032
__________
Total equity securities 970,912
__________
Total investments $1,898,632
==========
</TABLE>
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
NOTES TO PORTFOLIO
September 30, 1996
(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 number of shares reflects the effect of a three for two stock split.
(3) The number of shares reflects the effect of a two for one stock split.
(4) In February 1996, Cordis Corporation (Cordis), one of the Trust's
original holdings, was acquired by Johnson & Johnson. Each shareholder
of Cordis received 1.1292 shares of Johnson & Johnson for each share of
Cordis held. Subsequent to the acquisition, Johnson & Johnson effected
a two for one stock split.
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Oct. 21,
Year ended Year ended 1993, to
Sept. 30, Sept. 30, Sept. 30,
1996 1995 1994
<S> <C> <C> <C>
Interest income $78,134 59,600 70,281
Dividends 8,172 8,186 7,846
________________________________
Total investment income 86,306 67,786 78,127
Expenses:
Trustee's fees and related expenses (4,022) (5,454) (2,824)
Evaluator's fees (641) (774) (740)
Supervisory fees (499) (593) (613)
________________________________
Total expenses (5,162) (6,821) (4,177)
________________________________
Investment income - net 81,144 60,965 73,950
Net gain (loss) on investments:
Net realized gain (loss) 61,866 (8,695) -
Change in net unrealized appreciation
or depreciation 37,426 475,272 (352,067)
________________________________
99,292 466,577 (352,067)
________________________________
Net increase (decrease) in net assets
resulting from operations $180,436 527,542 (278,117)
================================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Oct. 21,
Year ended Year ended 1993, to
Sept. 30, Sept. 30, Sept. 30,
1996 1995 1994
<S> <C> <C> <C>
Net increase (decrease) in net assets
resulting from operations:
Investment income - net $81,144 60,965 73,950
Net realized gain (loss) on investments 61,866 (8,695) -
Change in net unrealized appreciation
or depreciation on investments 37,426 475,272 (352,067)
__________________________________
180,436 527,542 (278,117)
Units issued (220,000 in 1994) - - 2,020,973
Units redeemed (44,094 and 49,650 in
1996 and 1995, respectively) (458,177) (462,703) -
Distributions to unit holders:
Investment income - net - (1,517) (416)
Principal from investment transactions (99,209) - -
__________________________________
(99,209) (1,517) (416)
__________________________________
Total increase (decrease) in net assets (376,950) 63,322 1,742,440
Net assets:
At the beginning of the period
(representing 220,350, 270,000 and
50,000 units outstanding at
September 30, 1995 and 1994 and
October 21, 1993, respectively) 2,268,373 2,205,051 462,611
__________________________________
At the end of the period (including
distributable funds (deficit)
applicable to Trust units of $(7,209),
$42,559 and $3,253 at September 30,
1996, 1995 and 1994, respectively) $1,891,423 2,268,373 2,205,051
==================================
Trust units outstanding at the end
of the period 176,256 220,350 270,000
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The treasury obligations are stated at values as determined by First Trust
Advisors L.P. (the Evaluator), an affiliate 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 which is based on $.90 per annum per
100 units outstanding based on the largest aggregate number of units
outstanding during the year. Prior to September 1, 1995, the Trustee was
United States Trust Company of New York; effective September 1, 1995, The
Chase Manhattan Bank succeeded United States Trust Company of New York as
Trustee. In addition, the Evaluator will receive an annual fee based on $.30
per 100 units outstanding. 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 September 30, 1996 follows:
<TABLE>
<CAPTION>
Treasury Equity
obligations securities Total
<S> <C> <C> <C>
Unrealized appreciation $ - 348,571 348,571
Unrealized depreciation (82,780) (105,160) (187,940)
___________________________________
$(82,780) 243,411 160,631
===================================
</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, if any, are made semiannually on June 30
and December 31 to unit holders of record on June 15 and December 15,
respectively. Principal distributions to unit holders, if any, are made on
the last day of each month to unit holders of record on the fifteenth day of
such month if the amount available for distributors equals at least $1.00 per
100 units. Notwithstanding, principal distributions, if any, are made in
December of each year.
<PAGE>
Selected data per 100 units of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Oct. 21,
Year ended Year ended 1993, to
Sept. 30, Sept. 30, Sept. 30,
1996 1995 1994
<S> <C> <C> <C>
Investment income - interest and dividends $43.24 27.04 30.06
Expenses (2.59) (2.72) (1.61)
_________________________________
Investment income - net 40.65 24.32 28.45
Distributions to unit holders:
Investment income - net - (.59) (.15)
Principal from investment transactions (48.76) - -
Net gain (loss) on investments 51.78 189.02 (136.83)
_________________________________
Total increase (decrease) in
net assets 43.67 212.75 (108.53)
Net assets:
Beginning of the period 1,029.44 816.69 925.22
_________________________________
End of the period $1,073.11 1,029.44 816.69
=================================
</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 (199,600, 250,724 and 259,883 units
during the periods ended September 30, 1996, 1995 and 1994, respectively).
Distributions to unit holders of Investment income - net per 100 units
reflects the Trust's actual distributions of approximately $.44 per 100 units
to 259,000 units on December 30, 1994, approximately $.15 per 100 units to
251,910 units on June 30, 1995 and approximately $.15 per 100 units to 270,000
units on June 30, 1994. Distributions to unit holders of principal from
investment transactions reflects the Trust's actual distributions of
approximately $21.63 per 100 units to 213,902 units on December 29, 1995 and
approximately $27.13 per 100 units to 195,118 units on June 30, 1996. The net
gain (loss) on investments per 100 units during the period ended September 30,
1994 includes the effects of changes arising from issuance of 220,000
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 ($925.22 per 100
units) on October 21, 1993.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 80
SUNBELT GROWTH & TREASURY SECURITIES TRUST, SERIES 3
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: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
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 LLP
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 (REGISTERED TRADEMARK) SPECIAL SITUATIONS TRUST
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated January 29, 1996 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 "Portfolio" 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 Distributions. Distributions of dividends and
capital received, if any, 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 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
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, The Chase Manhattan Bank (National Association), as
Trustee, Securities Evaluation Service, Inc., as Evaluator for certain
Trusts, First Trust Advisors L.P., as Evaluator for certain Trusts, 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
general 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?
With the exception of bookkeeping and other administrative services
provided to certain Trusts, for which the Sponsor will be reimbursed in
amounts, if any, as set forth under "Summary of Essential Information"
appearing in Part One for each Trust, the Sponsor will not receive any
fees in connection with its activities relating to the Trusts. 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. The
supervisory 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 supervisory fee
for a month is based on the number of units outstanding at the end of
Page 3
such month. The bookkeeping and administrative fees and portfolio
supervisory 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. Each fee may exceed the actual
costs of providing either supervisory or bookkeeping and administrative
services for each Trust, but at no time will the total amount received
for either portfolio supervisory or bookkeeping and administrative
services rendered to unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate cost to
the Sponsor in the case of the bookkeeping and administrative fees, and
to First Trust Advisors L.P. in the case of the portfolio supervisory
fees, of supplying such services in such year. In providing such
superviory services, the Portfolio Supervisor may purchase research
services from a variety of sources which may include underwriters or
dealers of certain Trusts.
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.
For certain Trusts, as set forth in the "Summary of Essential
Information" appearing in Part One for such Trusts, expenses incurred in
establishing such Trusts, including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the
initial audit of the Trust portfolio and the initial fees and expenses
of the Trustee and any other out-of-pocket expenses, has been paid by
the Trust and is being charged off over a period not to exceed five
years from such Trust's Initial Date of Deposit. 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.
Page 4
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:
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, liquidation, 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 tax basis
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 (the date on which the
Units are acquired (i.e., the trade date) is excluded for purposes of
determining whether the Units have been held 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
Page 5
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.
Dividends Received Deduction. A Unit holder will be considered to have
received all of the dividends paid on his pro rata portion of each
Equity Security when such dividends are received by the Trust. Unit
holders will be taxed in this manner regardless of whether distributions
from a Trust are actually received by the Unit holder.
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 (other than
corporate shareholders, such as "S" corporations, which are not eligible
for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax
and the personal holding corporation tax). However, a corporation owning
Units should be aware that Sections 246 and 246A of the Code impose
additional limitations on the eligibility of dividends for the 70%
dividends received deduction. These limitations include a requirement
that stock (and therefore Units) must generally be held at least 46 days
(as determined under Section 246(c) of the Code). 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.
Limitations on Deductibility of Trust Expenses by Unit holders. Each
Unit holder's pro rata share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by such Unit holder. It should be noted that as a
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum
stated rate for taxpayers other than corporations. Because some or all
capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes 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
Page 6
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.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether the Unit holder receives cash in
addition to Securities. A "Security" for this purpose is a particular
class of stock issued by a particular corporation (and does not include
the Treasury Obligations). A Unit holder will not recognize gain or loss
if a Unit holder only receives Securities in exchange for his or her pro
rata portion in the Securities held by a Trust. However, if a Unit
holder also receives cash in exchange for a fractional share of a
Security held by a Trust, such Unit holder will generally recognize gain
or loss based upon the difference between the amount of cash received by
the Unit holder and his tax basis in such fractional share of a Security
held by a Trust.
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. 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.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his Units will generally equal the price paid by such Unit
holder for his Units. The cost of the Units is allocated among the
Securities held in a Trust in accordance with the proportion of the fair
market values of such Securities on the date the Units are purchased in
order to determine such Unit holder's tax basis for his pro rata portion
of each Security.
A Unit holder's tax basis in his Units and his pro rata portion of a
Security held by a Trust will be reduced to the extent dividends paid
with respect to such Security are received by a Trust which are not
taxable as ordinary income as described above.
General. Each Unit holder will be requested to provide the Unit holder's
taxpayer identification number to the Trustee and to certify that the
Unit holder has not been notified that payments to the Unit holder are
subject to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by 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.
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?"
The foregoing discussion relates only to United States Federal income
taxes. Unit holders may be subject to state and local taxation in other
jurisdictions. Unit holders should consult their tax advisers regarding
potential state or local taxation with respect to the Units.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
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
Page 8
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.
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
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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 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.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
Page 10
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.
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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 three business days following the
order for purchase, payment may be made prior thereto. A person will
become owner of the Units on the date of settlement provided payment has
been received. Cash, if any, made available to the Sponsor prior to the
date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor,
subject to the limitations of the Securities Exchange Act of 1934.
Delivery of Certificates representing Units so ordered will be made 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 three business days
following such order or shortly thereafter. Certificates are
Page 12
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Record ownership
may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
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 the Trustee obtains
Page 13
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 third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after 4:00 p.m. Eastern time, the date of tender
Page 14
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, or from the Capital Acount. 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 or as of any
earlier closing time on a day on which the New York Stock Exchange is
scheduled in advance to close at such earlier time) 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 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.
Page 15
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 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.
Page 16
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 $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141. As of
December 31, 1994, the total partners' capital of Nike Securities L.P.
was $10,863,058 (audited). (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 The Chase Manhattan Bank (National Association), a
national banking association with its principal executive office located
at 1 Chase Manhattan Plaza, New York, New York 10081 and its unit
investment trust office at 770 Broadway, New York, New York 10003. Unit
holders who have questions regarding the Trusts may call the Customer
Service Help Line at 1-800-682-7520. The Trustee is subject to
supervision 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 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.
Page 17
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 either Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187 or First Trust
Advisors L.P., an Illinois limited partnership formed in 1991 and an
affiliate of the Sponsor. The address of First Trust Advisors L.P. is
1001 Warrenville Road, Lisle, Illinois 60532. See Part One for each
Trust to determine if Securities Evaluation Service, Inc. or First Trust
Advisors L.P. is evaluating such Trust. The Evaluator may resign or may
be removed by the Sponsor and the Trustee, in which event the Sponsor
and the Trustee are to use their best efforts to appoint a satisfactory
successor. Such resignation or removal shall become effective upon the
acceptance of appointment by the successor Evaluator. If upon
resignation of the Evaluator no successor has accepted appointment
within 30 days after notice of resignation, the Evaluator may apply to a
court of competent jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that a Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Treasury Obligations
Page 18
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 LLP, 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? 5
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 Trustee18
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 (registered trademark)
THE FIRST TRUST
SPECIAL SITUATIONS TRUST
Prospectus
Part Two
January 29, 1996
First Trust(registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE AND PART THREE.
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 20
SUNBELT GROWTH & TREASURY SECURITIES TRUST SERIES
The First Trust (registered trademark) Special Situations Trust
PROSPECTUS NOTE: THIS PART THREE PROSPECTUS
Part Three MAY ONLY BE USED WITH
Dated May 30, 1996 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 Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi
and Tennessee (and in certain Trusts North Carolina, South Carolina and
Texas) (the "Sunbelt"), except up to 10% of the original portfolio at
the Initial Date of Deposit may consist of equity securities outside
this region. See "Portfolio" 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 income or potential 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 Sunbelt,
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
Sunbelt 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
Sunbelt. 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 Sunbelt companies is incorporated or has its corporate
headquarters in one of the states of the Sunbelt and each Sunbelt
company provides economic contributions to such state through employment
and the payment of taxes. Although certain Sunbelt companies have
domestic and international operations, each has close business and
economic ties which are important to the Sunbelt.
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 Sunbelt, although a number of companies have significant
business activities outside the Sunbelt. Unpredictable factors include
governmental, political, economic and fiscal policies of the Sunbelt
which may have an adverse effect on the performance of the issuers which
have significant business activities within the Sunbelt. In addition,
regional influences may affect the performance of the issuers,
particularly if an economic downturn or contraction occurs throughout
the Sunbelt.
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:
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
_____________________________ __________ __________
10,000 but less than 50,000 0.60% 0.6036%
50,000 but less than 100,000 1.30% 1.3171%
100,000 or more 2.10% 2.1450%
A dealer will receive from the Sponsor a dealer concession of 65% of the
total sales charges for Units sold.
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 2.0% of the Public Offering Price.
Page 2
Sunbelt Growth & Treasury Securities Trust 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: The Chase Manhattan Bank (National
Association)
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 LLP
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
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES
80 SUNBELT GROWTH AND TREASURY SECURITIES TRUST, SERIES 3,
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 January 31, 1997.
THE FIRST TRUST SPECIAL SITUATIONS TRUST,
SERIES 80
SUNBELT GROWTH AND TREASURY SECURITIES
TRUST, SERIES 3
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
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, ) January 31, 1997
the General Partner )
of Nike Securities L.P. )
)
) Robert M. Porcellino
) 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
Combined Series 258 (File No. 33-63483) 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 January 3, 1997 in
this Post-Effective Amendment to the Registration Statement and
related Prospectus of The First Trust Special Situations Trust
dated January 28, 1997.
ERNST & YOUNG LLP
Chicago, Illinois
January 27, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post Effective Amendment to form S-6 and is qualified in its entirety
by reference to such Post Effective Amendment to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 003
<NAME> SUNBELT GROWTH & TREASURY SERIES
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 1,738,001
<INVESTMENTS-AT-VALUE> 1,898,632
<RECEIVABLES> 901
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,899,533
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,110
<TOTAL-LIABILITIES> 8,110
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,738,001
<SHARES-COMMON-STOCK> 176,256
<SHARES-COMMON-PRIOR> 220,350
<ACCUMULATED-NII-CURRENT> (7,209)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 160,631
<NET-ASSETS> 1,891,423
<DIVIDEND-INCOME> 8,172
<INTEREST-INCOME> 78,134
<OTHER-INCOME> 0
<EXPENSES-NET> 5,162
<NET-INVESTMENT-INCOME> 81,144
<REALIZED-GAINS-CURRENT> 61,866
<APPREC-INCREASE-CURRENT> 37,426
<NET-CHANGE-FROM-OPS> 180,436
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 99,209
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 44,094
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (376,950)
<ACCUMULATED-NII-PRIOR> 42,559
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
