Registration No. 33-51913
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 90
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on February 16, 1994 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 90
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Statement of Net
Assets
Form S-6 Auditors
* Inapplicable, answer negative or not required.
Utility Income Trust, Series 2
The Trust. The First Trust Special Situations Trust, Series 90
(the "Trust") is a unit investment trust consisting of a portfolio
containing common stocks issued by public utility companies which
provide income and are considered by the Underwriter to have the
potential for capital appreciation. The Trust also may provide
an opportunity to receive increasing dividend distributions, although
there is no assurance that this will occur.
The objective of the Trust is to provide for income and potential
capital appreciation by investing the Trust's portfolio in common
stocks issued by public utility companies (the "Equity Securities").
See "Schedule of Investments." The Trust has a Mandatory Termination
Date as set forth under "Summary of Essential Information." There
is, of course, no guarantee that the objective of the Trust will
be achieved. Each Unit of the Trust represents an undivided fractional
interest in all the Equity Securities deposited in the Trust.
The Equity Securities deposited in the Trust's portfolio have
no fixed maturity date and the value of these underlying Equity
Securities will fluctuate with changes in the values of stocks
in general. See "Portfolio."
The Sponsor may, from time to time during a period of up to approximately
180 days after the Initial Date of Deposit, deposit additional
Equity Securities in the Trust. Such deposits of additional Equity
Securities will, therefore, be done in such a manner that the
original proportionate relationship amongst the individual issues
of the Equity Securities shall be maintained. See "What is the
First Trust Special Situations Trust?" and "How May Equity Securities
be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the
Trust during the initial offering period is equal to the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the ask prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust, plus a maximum sales charge
of 4.9% (equivalent to 5.152% of the net amount invested). A pro
rata share of accumulated dividends, if any, in the Income Account
is included in the Public Offering Price. The secondary market
Public Offering Price per Unit will be based upon the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the 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 maximum sales charge of
4.9% (equivalent to 5.152% of the net amount invested) subject
to reduction beginning March 1, 1995. The minimum purchase is
$2,000 ($1,000 for purchasers who are IRAs or other retirement
plans). The sales charge is reduced on a graduated scale for sales
involving at least 10,000 Units. See "How is the Public Offering
Price Determined?"
Estimated Annual Distributions. The estimated annual dividend
distribution to Unit holders (based on the most recent quarterly
dividend declared with respect to the Equity Securities in the
Trust) at the opening of business on the Initial Date of Deposit
was $48.22 per 100 Units. The estimated annual dividend distributions
per Unit will vary with changes in fees and expenses of the Trust,
with changes in dividends received and with the sale or liquidation
of Equity Securities; therefore, there is no assurance that the
annual dividend distribution will be realized in the future.
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.
J.C. Bradford & Co.
The date of this Prospectus is February 16, 1994
Page 1
Dividend and Capital Gains Distributions. Distributions of dividends
received, and realized capital gains, if any, received by the
Trust, net of expenses of the Trust, will be paid monthly on the
Distribution Date to Unit holders of record on the Record Date
as set forth in the "Summary of Essential Information." On April
15, 1994, the Initial Distribution Date, Unit holders of record
as of April 1, 1994 will receive $2.26 per 100 Units. Beginning
in May of 1994, the regular estimated monthly distribution will
be $4.02 per 100 Units. Distributions of funds in the Capital
Account, if any, will be made at least annually in December of
each year. Any distribution of income and/or capital gains will
be net of the expenses of the Trust. See "What is the Federal
Tax Status of Unit Holders?" Additionally, upon termination of
the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights
of Unit Holders-How are Income and Capital Distributed?
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor may maintain a
market for Units of the Trust and offer to repurchase such Units
at prices which are based on the aggregate underlying value of
Equity Securities in the Trust (generally determined by the closing
sale prices of listed Equity Securities and the bid prices of
over-the-counter traded Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. If a
secondary market is maintained during the initial offering period,
the prices at which Units will be repurchased will also be based
upon the aggregate underlying value of the Equity Securities in
the Trust (generally determined by the closing sale prices of
listed Equity Securities and the ask prices of over-the-counter
traded Equity Securities) plus or minus cash, if any, in the Capital
and Income Accounts of the Trust. If a secondary market is not
maintained, a Unit holder may redeem Units through redemption
at prices based upon the aggregate underlying value of the Equity
Securities in the Trust (generally determined by the closing sale
prices of listed Equity Securities and 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. A Unit
holder tendering 2,500 Units or more 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 Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of the Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by
the Trustee. At least 60 days prior to the Mandatory Termination
Date of the Trust, the Trustee will provide written notice thereof
to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges)
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. To be effective, the election form, together
with surrendered certificates and other documentation required
by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date of the Trust.
Unit holders not electing a distribution of shares of Equity Securities
will receive a cash distribution within a reasonable time after
the Trust is terminated. See "Rights of Unit Holders-How are Income
and Capital Distributed?"
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-February 16, 1994
Underwriter: J.C. Bradford & Co.
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
<S> <C>
General Information
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $ 474,621
Aggregate Offering Price Evaluation of Equity
Securities per 100 Units $ 949.24
Sales Charge of 4.9% of the Public Offering Price per 100 Units
(5.152% of the net amount invested) $ 48.91
Public Offering Price per 100 Units (2) $ 998.15
Sponsor's Initial Repurchase Price per 100 Units $ 949.24
Redemption Price per 100 Units (based on aggregate
underlying value of Equity Securities) (3) $ 949.24
Calculation of Net Annual Dividends per 100 Units:
Estimated Gross Annual Dividends per 100 Units (4) $ 49.84
Less: Estimated Annual Expense per 100 Units $ 1.62
__________
Estimated Net Annual Dividends per 100 Units $ 48.22
==========
</TABLE>
CUSIP Number 33734W 426
First Settlement Date February 24, 1994
Mandatory Termination Date February 1, 2000
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than 40% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $.74 per 100 Units outstanding.
Evaluator's Annual Fees (5) $.17 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 Maximum of $.25 per 100 Units out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date First day of each month commencing
April 1, 1994.
Income Distribution Date (6) Fifteenth day of each month
commencing April 15, 1994.
[FN]
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. Eastern time and sold to investors
at a Public Offering Price per Unit based on this valuation.
(3) See "How May Units be Redeemed?"
(4) The estimated annual dividends are based on the most recent
quarterly dividend.
(5) The minimum and maximum evaluation fee for any one calendar
year will be $1,000 and $2,500, respectively.
(6) Distributions from the Capital Account will be made monthly
payable on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $1.00 per 100 Units. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 3
Utility Income Trust, Series 2
The First Trust Special Situations Trust, Series 90
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 90 is one of
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"). This Series consists
of an underlying separate unit investment trust designated as:
Utility Income Trust, Series 2. The Trust was created under the
laws of the State of New York pursuant to a Trust Agreement (the
"Indenture"), dated the Initial Date of Deposit, with Nike Securities
L.P., as Sponsor, United States Trust Company of New York, as
Trustee, Securities Evaluation Service, Inc., as Evaluator, and
First Trust Advisors L.P., as Portfolio Supervisor.
On the Initial Date of Deposit, the Sponsor deposited with the
Trustee confirmations of contracts for the purchase of common
stocks issued by public utility companies together with an irrevocable
letter or letters of credit of a financial institution in an amount
at least equal to the purchase price of such securities. In exchange
for the deposit of securities or contracts to purchase securities
in the Trust, the Trustee delivered to the Sponsor documents evidencing
the entire ownership of the Trust.
The objective of the Trust is to provide for income and potential
capital appreciation through an investment in equity securities
issued by public utility companies (the "Equity Securities").
A goal of the Trust is to invest in Equity Securities of well-established
companies with proven records of dependable and increasing dividend
payments. There is, of course, no guarantee that the objective
of the Trust will be achieved.
With the deposit of the Equity Securities on the Initial Date
of Deposit, the Sponsor established a percentage relationship
between the amounts of Equity Securities in the Trust's portfolio.
From time to time following the Initial Date of Deposit, the Sponsor,
pursuant to the Indenture, may deposit additional Equity Securities
in the Trust and Units may be continuously offered for sale to
the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any
additional Equity Securities deposited in the Trust will maintain,
as nearly as is practicable, the original proportionate relationship
of the Equity Securities in the Trust's portfolio. Any deposit
by the Sponsor of additional Equity Securities will duplicate,
as nearly as is practicable, the original proportionate relationship
and not the actual proportionate relationship on the subsequent
date of deposit, since the actual proportionate relationship may
be different than the original proportionate relationship. Any
such difference may be due to the sale, redemption or liquidation
of any of the Equity Securities deposited in the Trust on the
Initial, or any subsequent, Date of Deposit. See "How May Equity
Securities be Removed from the Trust?" The original percentage
relationship of each Equity Security to the Trust is set forth
herein under "Schedule of Investments." Since the prices of the
underlying Equity Securities will fluctuate daily, the ratio,
on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as
a result of the deposit of additional Equity Securities in the
Trust.
On the Initial Date of Deposit, each Unit of the Trust represented
the undivided fractional interest in the Equity Securities deposited
in the Trust set forth under "Summary of Essential Information."
To the extent that Units of the Trust are redeemed, the aggregate
value of the Equity Securities in the Trust will be reduced and
the undivided fractional interest represented by each outstanding
Unit of the Trust will increase. However, if additional Units
are issued by the Trust in connection with the deposit of additional
Equity Securities by the Sponsor, the aggregate value of the Equity
Securities in the Trust will be increased by amounts allocable
to additional Units, and the fractional undivided interest represented
by each Unit of the Trust will be decreased proportionately. See
"How May Units be Redeemed?" The Trust has a Mandatory Termination
Date as set forth herein under "Summary of Essential Information."
Page 4
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. The
Sponsor will not receive any fees in connection with its activities
relating to the Trust. However, First Trust Advisors L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee,
which is not to exceed the amount set forth under "Summary of
Essential Information," for providing portfolio supervisory services
for the Trust. Such fee is based on the number of Units outstanding
in the Trust on January 1 of each year except for the year or
years in which an initial offering period occurs in which case
the fee for a month is based on the number of Units outstanding
at the end of such month. The fee may exceed the actual costs
of providing such supervisory services for this Trust, but at
no time will the total amount received for portfolio supervisory
services rendered to unit investment trusts of which Nike Securities
L.P. is the Sponsor in any calendar year exceed the aggregate
cost to First Trust Advisors L.P. of supplying such services in
such year. See "Underwriting."
Subsequent to the initial offering period, the Evaluator will
receive a fee as indicated in the "Summary of Essential Information."
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust an annual fee computed at $.74
per annum per 100 Units in the Trust outstanding based upon the
largest aggregate number of Units of the Trust outstanding at
any time during the year. 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 the Trust to the extent funds are available and then
from the Capital Account of the Trust. Since the Trustee has the
use of the funds being held in the Capital and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
The following additional charges are or may be incurred by the
Trust: all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the Unit
holders; fees of the Trustee for any extraordinary services performed
under the Indenture; indemnification of the Trustee for any loss,
liability or expense incurred by it without negligence, bad faith
or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification
of the Sponsor for any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct in acting as
Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such
taxes or charges are being levied or made or, to the knowledge
of the Sponsor, contemplated). The above expenses and the Trustee's
annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to
sell Equity Securities in the Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of the Trust. Since the Equity
Securities are all common stocks and the income stream produced
by dividend payments is unpredictable, the Sponsor cannot provide
any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities
will have to be sold to meet Trust expenses. These sales may result
in capital gains or losses to Unit holders. See "What is the Federal
Tax Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the Units, the Sponsor is required to bear the cost of such
annual audits to the extent such cost exceeds $.50 per
Page 5
100 Units. Unit holders of the Trust covered by an audit may obtain
a copy of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
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 (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 Trust.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of the Trust
under the Code; and the income of the Trust will be treated as
income of the Unit holders thereof under the Code. Each Unit holder
will be considered to have received his pro rata share of the
income derived from each Equity Security when such income is received
by the Trust.
2. Each Unit holder will have a taxable event when the Trust
disposes of an Equity Security (whether by sale, exchange, redemption,
or otherwise) 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
Equity Security held by the Trust (in proportion to the fair market
values thereof on the date the Unit holder purchases his Units)
in order to determine his initial cost for his pro rata portion
of each Equity Security held by the Trust. 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 the 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 Equity Securities held
by the Trust will generally be considered a capital gain except
in the case of a dealer or a financial institution and will be
long-term if the Unit holder has held his Units for more than
one year. A Unit holder's portion of loss, if any, upon the sale
or redemption of Units or the disposition of Equity Securities
held by the Trust will generally be considered a capital loss
except in the case of a dealer or a financial institution and,
in general, will be long-term if the Unit holder has held his
Units for more than one year. Unit holders should consult their
tax advisers regarding the recognition of such capital gains and
losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by the
Trust, including fees of the Trustee and the Evaluator.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by the Trust (to the extent such dividends are taxable as ordinary
income, as discussed above) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends. However,
a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Proposed regulations have been issued which address
special rules that must be considered in determining whether the
46 day holding requirement is met. Moreover, the allowable percentage
Page 6
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.
Recognition of Taxable Gain or Loss Upon Disposition of Securities
by the Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when an Equity Security
is disposed of by the Trust or if the Unit holder disposes of
a Unit. For taxpayers other than corporations, net capital gains
are subject to a maximum stated marginal tax rate of 28%. However,
it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences
at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the
Tax Act includes a provision that would recharacterize capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions
entered into after April 30, 1993. Unit holders and prospective
investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Redemption
of Units or Termination of the Trust. As discussed in "Rights
of Unit Holders-How are Income and Capital Distributed?", under
certain circumstances a Unit holder who owns at least 2,500 Units
may request an In-Kind Distribution upon the redemption of Units
or the termination of the Trust. The Unit holder requesting an
In-Kind Distribution will be liable for expenses related thereto
(the "Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See
"Rights of Unit Holders-How are Income and Capital Distributed?"
As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unit holder is considered as owning
a pro rata portion of each of the Trust assets for Federal income
tax purposes. The receipt of an In-Kind Distribution upon the
redemption of Units or the termination of the 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 the Trust in exchange
for an undivided interest in whole shares of stock plus, possibly,
cash.
There are generally three different potential tax consequences
which may occur under an In-Kind Distribution with respect to
each Equity Security owned by the Trust. An "Equity Security"
for this purpose is a particular class of stock issued by a particular
corporation. If the Unit holder receives only whole shares of
an Equity Security in exchange for his or her pro rata portion
in each share of such security held by the Trust, there is no
taxable gain or loss recognized upon such deemed exchange pursuant
to Section 1036 of the Code. If the Unit holder receives whole
shares of a particular Equity Security plus cash in lieu of a
fractional share of such Equity Security, and if the fair market
value of the Unit holder's pro rata portion of the shares of such
Equity Security exceeds his tax basis in his pro rata portion
of such Equity Security, taxable gain would be recognized in an
amount not to exceed the amount of such cash received, pursuant
to Section 1031(b) of the Code. No taxable loss would be recognized
upon such an exchange pursuant to Section 1031(c) of the Code,
whether or not cash is received in lieu of a fractional share.
Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unit holder's
tax basis in the shares of such particular Equity Security which
he receives as part of the In-Kind Distribution. Finally, if a
Unit holder's pro rata interest in an Equity Security does not
equal a whole share, he may receive entirely cash in exchange
for his pro rata portion of a particular Equity Security. In such
case, taxable gain or loss is measured by comparing the amount
of cash received by the Unit holder with his tax basis in such
Equity Security.
Because the Trust will own many Equity Securities, a Unit holder
who requests an In-Kind Distribution will have to analyze the
tax consequences with respect to each Equity Security owned by
the Trust. In analyzing the tax consequences with respect to each
Equity Security, such Unit holder must allocate the Distribution
Expenses among the Equity Securities (the "Allocable Expenses").
The Allocable Expenses will reduce
Page 7
the amount realized with respect to each Equity Security so that
the fair market value of the shares of such Equity Security received
(if any) and cash received in lieu thereof (as a result of any
fractional shares) by such Unit holder should equal the amount
realized for purposes of determining the applicable tax consequences
in connection with an In-Kind Distribution. A Unit holder's tax
basis in shares of such Equity Security received will be increased
by the Allocable Expenses relating to such Equity Security. The
amount of taxable gain (or loss) recognized upon such exchange
will generally equal the sum of the gain (or loss) recognized
under the rules described above by such Unit holder with respect
to each Equity Security owned by the Trust. Unit holders who request
an In-Kind Distribution are advised to consult their tax advisers
in this regard.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Trust to
such Unit holder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions
by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States
persons. Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of income
dividends includable in the Unit holder's gross income and amounts
of Trust expenses which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject
to state and local taxes. Investors should consult their tax advisers
for specific information on the tax consequences of particular
types of distributions.
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trust for New York tax matters, under the existing income
tax laws of the State of New York, the Trust is not an association
taxable as a corporation and the income of the Trust will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust 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 Equity Securities?
The Trust consists of different issues of Equity Securities issued
by public utility companies which are listed on a national securities
exchange or the NASDAQ National Market System or traded in the
over-the-counter market. The utility industry is recognized for
its relative safety, stability and as a high-yielding sector of
the equity market. As such, the Trust may be a suitable investment
for investors seeking a fixed portfolio with a known maturity,
bond buyers needing a conservative equity investment and utility
stock buyers desiring greater diversification and frequent monthly
income. See "What are the Equity Securities Selected for Utility
Income Trust, Series 2?" for a general description of the companies.
An investment in Units of the Trust should be made with an understanding
of the characteristics of the public utility industry and the
risks which such an investment may entail. General problems of
the public utility industry include the difficulty in obtaining
an adequate return on invested capital despite frequent increases
Page 8
in rates which have been granted by the public service commissions
having jurisdiction, the difficulty in financing large construction
programs during an inflationary period, the restrictions on operations
and increased cost and delays attributable to environmental and
other regulatory considerations, the difficulty to the capital
markets in absorbing utility debt and equity securities, the difficulty
in obtaining fuel for electric generation at reasonable prices,
and the effects of energy conservation. There is no assurance
that such commissions will in the future grant rate increases
or that any such increases will be adequate to cover operating
and other expenses and debt service requirements. All of the public
utilities which are issuers of the Equity Securities in the portfolio
have been experiencing many of these problems in varying degrees.
In addition, federal, state and municipal governmental authorities
may from time to time review existing, and impose additional,
regulations governing the licensing, construction and operation
of nuclear power plants, which may adversely affect the ability
of the issuers of certain of the Equity Securities in the Trust's
portfolio to make dividend payments on their Equity Securities.
Utilities are generally subject to extensive regulation by state
utility commissions which, for example, establish the rates which
may be charged and the appropriate rate of return on an approved
asset base, which must be approved by the state commissions. Certain
utilities have had difficulty from time to time in persuading
regulators, who are subject to political pressures, to grant rate
increases necessary to maintain an adequate return on investment
and voters in many states have the ability to impose limits on
rate adjustments (for example, by initiative or referendum). Any
unexpected limitations could negatively affect the profitability
of utilities whose budgets are planned far in advance. In addition,
gas pipeline and distribution companies have had difficulties
in adjusting to short and surplus energy supplies, enforcing or
being required to comply with long-term contracts and avoiding
litigation from their customers, on the one hand, or suppliers,
on the other.
Certain of the issuers of the Equity Securities in the Trust may
own or operate nuclear generating facilities. Governmental authorities
may from time to time review existing, and impose additional,
requirements governing the licensing, construction and operation
of nuclear power plants. Nuclear generating projects in the electric
utility industry have experienced substantial cost increases,
construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing
costs, required design changes and rework, allegedly faulty construction,
objections by groups and governmental officials, limits on the
ability to finance, reduced forecasts of energy requirements and
economic conditions. This experience indicates that the risk of
significant cost increases, delays and licensing difficulties
remains present until completion and achievement of commercial
operation of any nuclear project. Also, nuclear generating units
in service have experienced unplanned outages or extensions of
scheduled outages due to equipment problems or new regulatory
requirements sometimes followed by a significant delay in obtaining
regulatory approval to return to service. A major accident at
a nuclear plant anywhere, such as the accident at a plant in Chernobyl,
could cause the imposition of limits or prohibitions on the operation,
construction or licensing of nuclear units in the United States.
In view of the uncertainties discussed above, there can be no
assurance that any company's share of the full cost of nuclear
units under construction ultimately will be recovered in rates
or of the extent to which a company could earn an adequate return
on its investment in such units. The likelihood of a significantly
adverse event occurring in any of the areas of concern described
above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse
events could occur and individually or collectively could have
a material adverse impact on a company's financial condition,
or the results of its operations or its ability to make interest
and principal payments on its outstanding debt or to pay dividends.
Other general problems of the gas, water, telephone and electric
utility industries (including state and local joint action power
agencies) include difficulty in obtaining timely and adequate
rate increases, difficulty in financing large construction programs
to provide new or replacement facilities during an inflationary
period, rising costs of rail transportation to transport fossil
fuels, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which
adversely affect a utility's ability to operate profitably, increased
competition in service costs, recent reductions in estimates of
future demand for electricity and gas in certain areas of the
country, restrictions on operations and increased cost and
Page 9
delays attributable to environmental considerations, uncertain
availability and increased cost of capital, unavailability of
fuel for electric generation at reasonable prices, including the
steady rise in fuel costs and the costs associated with conversion
to alternate fuel sources such as coal, availability and cost
of natural gas for resale, technical and cost factors and other
problems associated with construction, licensing, regulation and
operation of nuclear facilities for electric generation, including
among other considerations the problems associated with the use
of radioactive materials and the disposal of radioactive wastes,
and the effects of energy conservation. Each of the problems referred
to could adversely affect the ability of the issuers of any Equity
Securities in the Trust to make dividend payments.
The average common stock dividend yield of utilities has exceeded
that of the S&P 500 stocks. There can be no assurance that the
historical investment performance for any industry (including
the public utilities industry) is indicative of future performance.
However, during periods of lower interest rates, dividend yields
on utility common stocks are often attractive. In times of both
economic weakness and lower interest rates, utility stocks have
outperformed most other equity issues in terms of price and dividend
stability. However, during periods of rising interest rates, the
prices of utility common stocks typically decline.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time
to time in the Trust and any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Trust
Agreement together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Equity Securities. However, should
any contract for the purchase of any of the Equity Securities
initially deposited hereunder fail, the Sponsor will, unless substantially
all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Equity Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable
to such failed contract to all Unit holders on the next distribution
date.
Because certain of the Equity Securities from time to time may
be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders
and will not be reinvested, no assurance can be given that the
Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor
may instruct the Trustee to sell Equity Securities under certain
limited circumstances. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired
in connection with a merger or other transaction. If offered such
new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by the Trust, they may be accepted for deposit
in the Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities
be Removed from the Trust?" Equity Securities, however, will not
be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national
securities exchange, the principal trading market for the Equity
Securities may be in the over-the-counter market. As a result,
the existence of a liquid trading market for the Equity Securities
may depend on whether dealers will make a market in the Equity
Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. The recent 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 Trust may be restricted under the Investment
Company Act of 1940 from selling Equity Securities to the Sponsor.
The price at which the Equity Securities may be sold to meet redemptions,
and the value of the Trust, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the
Page 10
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 the Portfolio may be expected
to fluctuate over the life of the Trust to values higher or lower
than those prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in the Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
The Underwriter has acquired or will acquire the Equity Securities
for the Sponsor and thereby benefits. The Underwriter in its general
securities business acts as agent or principal in connection with
the purchase and sale of equity securities, including the Equity
Securities in the Trust, and may act as a market maker in certain
of the Equity Securities. The Underwriter also from time to time
may issue reports on and make recommendations relating to equity
securities, which may include the Equity Securities.
How were the Equity Securities Selected?
The Trust has been carefully researched and selected by professional
analysts at J.C. Bradford & Co.'s research department in conjunction
with their national correspondents. The portfolio will continue
to be monitored as will the utility industry by J.C. Bradford's
research department and the Sponsor.
What are the Equity Securities Selected for Utility Income Trust,
Series 2?
American Telephone & Telegraph Company-AT&T (T), headquartered
in New York, New York, provides products, services and systems
for the movement and management of information. The company also
provides voice, data and image telecommunications services, including
domestic and international long distance telecommunications services.
In addition, the company also markets AT&T products, systems and
services in the United States and abroad.
Ameritech Corporation (AIT), headquartered in Chicago, Illinois,
is a regional telephone holding company for various subsidiaries
under the "Bell Telephone Company" name. The subsidiaries operate
in Illinois, Indiana, Michigan, Ohio, and Wisconsin. Ameritech
Corporation also provides cellular mobile telephone
Page 11
services, paging products, financing and leasing of computer hardware,
and real estate management services.
Bell Atlantic Corporation (BEL), located in Philadelphia, Pennsylvania,
owns and operates various telephone subsidiaries in the Middle
Atlantic states and the District of Columbia. In addition, the
company operates cellular telephone services in its geographic
service area, maintains computer equipment and associated peripherals
and sells and repairs computer parts. The company also provides
telephone consulting outside the United States.
Brooklyn Union Gas Company (BU) distributes natural gas at the
retail level to metropolitan New York City as well as the boroughs
of Brooklyn, Staten Island and Queens. Headquartered in Brooklyn,
New York, the company serves a 3.6 million population service
area. Through its subsidiaries, Brooklyn Union Gas also markets
energy-related products, distributes propane and explores for
and produces natural gas.
Central & South West Corporation (CSR), headquartered in Dallas,
Texas, is a public utility holding company. Its subsidiaries purchase,
generate, transmit, distribute and sell electricity, providing
service in several midwestern and southern states. The company
also owns an intrastate natural gas pipeline.
Dominion Resources, Inc. (DOMR), headquartered in Clanton, Alabama,
operates a cellular radio telephone system. The company services
the cities of Montgomery and Birmingham, Alabama through its subsidiary,
Dominion Cellular, Inc.
DPL, Inc. (DPL), based in Dayton, Ohio, operates through its subsidiary,
The Dayton Power and Light Company. The company supplies electricity
and natural gas to numerous counties in Ohio. The company's largest
industrial customer group is the electrical and electronic machinery
industry.
Duke Power Company (DUK), headquartered in Charlotte, North Carolina,
generates, transmits, distributes and sells electric energy in
the Piedmont sections of North Carolina and South Carolina. Duke
Power Company also supplies electricity to other rural electric
cooperatives and private utilities.
Entergy Corporation (ETR) is the holding company for Arkansas
Power and Light Company, Louisiana Power and Light Company, Mississippi
Power and Light Company and New Orleans Public Service, Inc. These
companies provide electricity to retail customers in Arkansas,
Louisiana and Mississippi. The company is headquartered in New
Orleans, Louisiana.
Florida Progress Corporation (FPC), headquartered in St. Petersburg,
Florida, is the holding company for Florida Power Corporation,
an electric utility. Florida Power Corporation provides electric
utility services to the Gulf Coast and approximately half of Florida's
counties. The company is also involved in commercial finance and
life insurance, leveraged leasing, and coal mining.
General Public Utilities Corporation (GPU) is a utility holding
company whose three subsidiaries, Jersey Central Power & Light,
Metropolitan Edison and Pennsylvania Electric, provide electric
service to millions of people in Pennsylvania and New Jersey.
The company is headquartered in Parsippany, New Jersey.
LG & E Energy Corporation (LGE), based in Louisville, Kentucky,
supplies electric and gas services to residential, commercial,
and industrial customers in the greater Louisville area.
New England Electric System (NES) provides electric service to
areas in Massachusetts, New Hampshire and Rhode Island through
its subsidiaries. In addition, the company's subsidiaries purchase,
generate, transmit and sell electric power in wholesale quantities,
primarily to its affiliates. Headquartered in Westborough, Massachusetts,
the company also owns an interest in domestic oil and gas exploration
and production.
Niagara Mohawk Power Corporation (NMK), headquartered in Syracuse,
New York, produces, purchases, transmits, distributes and sells
electricity and gas in New York State. Through subsidiaries, the
company is involved in the operation of nuclear plants.
NIPSCO Industries, Inc. (NI), based in Hammond, Indiana, is the
holding company for Northern Indiana Public Service Company, which
provides the northern third of Indiana with electricity and natural
gas. Electrical generation sources are primarily coal and, to
a lesser extent, natural gas.
Northwest Natural Gas Company (NWNG), headquartered in Portland,
Oregon, distributes natural gas to customers in western Oregon
and southwestern Washington, including the metropolitan Portland
area. Through its subsidiaries, the company also explores for,
develops and produces natural gas; purchases, markets
Page 12
and arranges for the transportation of gas in the western United
States and develops real estate in the Portland area.
PECO Energy Company (PE), headquartered in Philadelphia, Pennsylvania,
provides electricity and gas to southwestern Pennsylvania, including
the city of Philadelphia. The company also owns and operates the
two-unit Limerick nuclear facility.
Pinnacle West Capital Corporation (PNW) is a utility holding company
headquartered in Phoenix, Arizona. The company supplies electricity
to several counties in Arizona through its subsidiary, Arizona
Public Service Company. The company also has subsidiaries in the
real estate and banking industries.
Public Service Enterprise Group, Inc. (PEG) is a public utility
holding company for Public Service Electric & Gas Company. The
company generates and distributes electricity and produces natural
gas in New Jersey. Headquartered in Newark, New Jersey, Public
Service Enterprise Group, Inc. controls a service area from Bergen
County southwest to Camden, New Jersey.
Southern Company (SO) is the parent company of five electric service
companies. These companies include Alabama Power, Georgia Power,
Gulf Power, Mississippi Power and Savannah Electric, all of which
provide residential, commercial and industrial service to most
of the Southeast. The company is headquartered in Atlanta, Georgia.
Southwestern Bell Corporation (SBC), based in St. Louis, Missouri,
is one of the regional companies formerly owned by American Telephone
& Telegraph Company (AT&T). The company is a telephone holding
company which provides exchange telecommunications and access
services. In addition, Southwestern Bell Corporation markets cellular
telephone services, provides paging services and directory publishing.
TECO Energy, Inc. (TE) conducts business through its five subsidiaries.
The company's largest subsidiary, Tampa Electric Company, is an
electric utility serving customers in west central Florida. Other
subsidiaries include TECO Finance, TECO Investments, TECO Power
Services, and TECO Diversified, Inc. The subsidiaries provide
financial and investment services and develop power generation
projects. The company is headquartered in Tampa, Florida.
US West, Inc. (USW) is a regional phone holding company based
in Englewood, Colorado. Its subsidiaries provide telecommunications
services in various western states. The company also has subsidiaries
involved in marketing and finance.
Wisconsin Energy Corporation (WEC), headquartered in Milwaukee,
Wisconsin, is a holding company with subsidiaries primarily engaged
in the generation, distribution and sale of electricity and the
distribution and sale of natural gas in eastern Wisconsin and
the Upper Peninsula of Michigan.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life
of the Trust and may be more or less than the price at which they
were deposited in the Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Security. In the event of
a notice that any Equity Security will not be delivered ("Failed
Contract Obligations") to the Trust, the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other Equity
Securities ("Replacement Securities"). Any Replacement Security
will be identical to those which were the subject of the failed
contract. The Replacement Securities must be purchased within
20 days after delivery of the notice of a failed contract and
the purchase price may not exceed the amount of funds reserved
for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in
the event of a failed contract, the Sponsor will refund the sales
charge attributable to such Failed Contract Obligations to all
Unit holders of the Trust and the Trustee will distribute the
principal attributable to such Failed Contract Obligations not
more than 120 days after the date on which the
Page 13
Trustee received a notice from the Sponsor that a Replacement
Security would not be deposited in the Trust. In addition, Unit
holders should be aware that, at the time of receipt of such principal,
they may not be able to reinvest such proceeds in other securities
at a yield equal to or in excess of the yield which such proceeds
would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size
of the Trust and the number of Units thereof by the deposit of
additional Equity Securities in the Trust and the issuance of
a corresponding number of additional Units.
The Trust consists of the Equity Securities listed under "Schedule
of Investments" (or contracts to purchase such Securities) as
may continue to be held from time to time in the Trust and any
additional Equity Securities acquired and held by the Trust pursuant
to the provisions of the Indenture (including provisions with
respect to deposits into the Trust of Equity Securities in connection
with the issuance of additional Units).
Once all of the Equity Securities in the Trust are acquired, the
Trustee will have no power to vary the investments of the Trust,
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unit holder's investment, but
may dispose of Equity Securities only under limited circumstances.
See "How May Equity Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation
pending as of the Initial Date of Deposit in respect of any Equity
Security which might reasonably be expected to have a material
adverse effect on the Trust. At any time after the Initial Date
of Deposit, litigation may be instituted on a variety of grounds
with respect to the Equity Securities. The Sponsor is unable to
predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse
effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust, plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust, plus a sales charge of 4.9% (equivalent to 5.152% of the
net amount invested) subject to reduction beginning March 1, 1995,
divided by the amount of Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price
is based on 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 divided by the number of Units of the Trust
outstanding. For secondary market sales after the completion of
the initial offering period, the Public Offering Price is also
based on 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 a maximum sales charge of 4.9% of
the Public Offering Price (equivalent to 5.152% of the net amount
invested) divided by the number of outstanding Units of the Trust.
The minimum purchase of the Trust is $2,000 ($1,000 for purchasers
who are IRAs or other retirement plans). The applicable sales
charge for both primary and secondary market sales is reduced
by a discount as indicated below for volume purchases:
<TABLE>
<CAPTION>
Primary and Secondary
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
________________ ________ ________
<S> <C> <C>
10,000 but less than 25,000 0.50% 0.5025%
25,000 but less than 50,000 0.70% 0.7049%
50,000 but less than 75,000 0.90% 0.9082%
75,000 but less than 100,000 1.40% 1.4199%
100,000 or more 1.90% 1.9368%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling Underwriter or dealer. The reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one
Page 14
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 Underwriter and their subsidiaries, the sales
charge is reduced by 4.1% of the Public Offering Price for purchases
of Units during the primary and secondary public offering periods.
Had the Units of the Trust been available for sale on the business
day prior to the Initial Date of Deposit, the Public Offering
Price would have been as indicated in "Summary of Essential Information."
The Public Offering Price of Units on the date of the prospectus
or during the initial offering period may vary from the amount
stated under "Summary of Essential Information" in accordance
with fluctuations in the prices of the underlying Equity Securities.
During the initial offering period, the aggregate value of the
Units of the Trust shall be determined on the basis of the aggregate
underlying value of the Equity Securities therein plus or minus
cash, if any, in the Income and Capital Accounts of the Trust.
The aggregate underlying value of the Equity Securities 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 ask 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 ask prices on the over-the-counter market
(unless it is determined that these prices are inappropriate as
a basis for evaluation). If current ask prices are unavailable,
the evaluation is generally determined (a) on the basis of current
ask prices for comparable securities, (b) by appraising the value
of the Equity Securities on the ask side of the market or (c)
by any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust plus the
applicable sales charge.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made five business
days following such order or shortly thereafter. See "Rights of
Unit Holders-How may Units be Redeemed?" for information regarding
the ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Equity Securities are deposited by the
Sponsor, Units will be distributed to the public at the then current
Public Offering Price. The initial offering period may be up to
approximately 180 days. During such period, the Sponsor may deposit
additional Equity Securities in the Trust and create additional
Units. Units reacquired by the Sponsor during the initial offering
period (at prices based upon the aggregate underlying value of
the Equity Securities in the Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon
the termination of the initial offering period, unsold Units created
or reacquired during the initial offering period will be sold
or resold at the then current Public Offering Price.
Page 15
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Sales initially will be made to
dealers and others at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price, and, for secondary
market sales, 3.2% of the Public Offering Price (or 65% of the
then current maximum sales charge after March 1 , 1995). Effective
on each March 1, commencing March 1, 1995, such sales charge will
be reduced by 1/2 of 1% to a minimum sales charge of 2.9%. However,
resales of Units of the Trust by such dealers and others to the
public will be made at the Public Offering Price described in
the prospectus. The Sponsor reserves the right to change the amount
of the concession or agency commission from time to time. Certain
commercial banks may be making Units of the Trust available to
their customers on an agency basis. A portion of the sales charge
paid by these customers is retained by or remitted to the banks
in the amounts indicated in the fourth preceding sentence. 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?
The Underwriter of the Trust will receive a gross sales commission
equal to 4.9% of the Public Offering Price of the Units (equivalent
to 5.152% of the net amount invested), less any reduced sales
charge for quantity purchases as described under "Public Offering-How
is the Public Offering Price Determined?" See "Underwriting" for
information regarding the receipt of the excess gross sales commissions
by the Sponsor from the other Underwriter and additional concessions
available to Underwriters, dealers and others. In addition, the
Sponsor and the Underwriter may be considered to have realized
a profit or to have sustained a loss, as the case may be, in the
amount of any difference between the cost of the Equity Securities
to the Trust (which is based on the Evaluator's determination
of the aggregate offering price of the underlying Equity Securities
of such Trust on the Initial Date of Deposit as well as subsequent
deposits) and the cost of such Equity Securities to the Sponsor.
See "Underwriting" and Note (2) of "Schedule of Investments."
During the initial offering period, the Underwriter also may realize
profits or sustain losses as a result of fluctuations after the
Date of Deposit in the Public Offering Price received by the Underwriter
upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a sales charge of 4.9%
subject to reduction beginning March 1, 1995) or redeemed. The
secondary market public offering price of Units may be greater
or less than the cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to, and the Underwriter may, maintain
a market for the Units and continuously offer to purchase Units
at prices, subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee
in transferring and recording the ownership of Units, will be
borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases
of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET
PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
Page 16
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
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 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 an amount substantially equal to the
Unit holder's pro rata share of the balance of the Income Account
calculated on the basis of one-twelfth of the estimated annual
dividend distributions in the Income Account after deducting estimated
expenses to Unit holders of record on the preceding Income Record
Date. See "Summary of Essential Information." Because dividends
are not received by the Trust at a constant rate throughout the
year, such distributions to Unit holders may be more or less than
the amount credited to the Income Account as of the Record Date.
For the purpose of minimizing fluctuation in the distributions
from the Income Account, the Trustee is authorized to advance
such amounts as may be necessary to provide income distributions
of approximately equal amounts. The Trustee shall be reimbursed
without interest, for any such advances from funds in the Income
Account at the ensuing Record Date. Persons who purchase Units
will commence receiving distributions only after such person becomes
a record owner. Notification to the Trustee of the transfer of
Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
Proceeds received on the sale of any Equity Securities in the
Trust, to the extent not used to meet redemptions of Units or
pay expenses, will, however, be distributed on the last day of
each month to Unit holders of record on the fifteenth day of such
month if the amount available for distribution equals at least
$1.00 per 100 Units. The Trustee is not required to pay interest
on funds held in the Capital Account of a Trust (but may itself
earn interest thereon and therefore benefit from the use of such
funds). Notwithstanding, distributions
Page 17
of funds in the Capital Account, if any, will be made on the last
day of each December to Unit holders of record as of December
15. See "What is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by the Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder only when filing a tax return. Under normal circumstances
the Trustee obtains the Unit holder's tax identification number
from the selling broker. However, a Unit holder should examine
his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should
be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit
holder will, upon surrender of his 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 and (ii) a pro rata share of any other assets
of the Trust, less expenses of the Trust. Not less than 60 days
prior to the Mandatory Termination Date of the Trust, the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (an "In-Kind Distribution"),
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. 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 of the Trust. 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 the 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 the Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 100 Units. Within
a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each person who at any time during
the calendar year was a Unit holder of the Trust the following
information in reasonable detail: (1) a summary of transactions
in the Trust for such year; (2) any Equity Securities sold during
the year and the Equity Securities held at the end of such year
by the Trust; (3) the redemption price per 100 Units based upon
a computation thereof on the 31st day of December of such year
(or the last business day prior thereto); and (4) amounts of income
and capital distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive in cash an amount
for each Unit equal to the Redemption Price per Unit next
Page 18
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 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.
Any Unit holder tendering 2,500 Units or more 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 the Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust
in order to make funds available for redemption. To the extent
that Equity Securities are sold, the size and diversity of the
Trust will be reduced. Such sales may be required at a time when
Equity Securities would not otherwise be sold and might result
in lower prices than might otherwise be realized.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
plus or minus cash, if any, in the Income and Capital Accounts
of the Trust. The Redemption Price per Unit is the pro rata share
of each Unit determined by the Trustee by adding: (1) the cash
on hand in the Trust other than cash deposited in the Trust to
purchase Equity Securities not applied to the purchase of such
Equity Securities;(2) the aggregate value of the Equity Securities
held in the Trust, as determined by the Evaluator on the basis
of the aggregate underlying value of the Equity Securities in
the Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation;
and deducting therefrom: (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust; (2) any
amounts owing to the Trustee for its advances; (3) an amount representing
estimated accrued expenses of the Trust, including but not limited
to fees and expenses of the Trustee (including legal and auditing
fees), the Evaluator and supervisory fees, if any; (4) cash held
for distribution to Unit holders of record of the Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results
of such computation by the number of Units of the Trust outstanding
as of the date thereof.
Page 19
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 prices on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee before 1:00 p.m. Eastern time
on the same business day and by making payment therefor to the
Unit holder not later than the day on which the Units would otherwise
have been redeemed by the Trustee. Units held by the Sponsor may
be tendered to the Trustee for redemption as any other Units.
In the event the Sponsor does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that the issuer of the Equity Security has breached
a covenant which would affect the payments of dividends, the credit
standing of the issuer or otherwise impair the sound investment
character of the Equity Security, that the issuer has defaulted
on the payment on any other of its outstanding obligations, that
the price of the Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to the Trust. Except as stated under "Portfolio - What are Some
Additional Considerations for Investors?" for Failed Obligations,
the acquisition by the Trust of any securities or other property
other than the Equity Securities is prohibited. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities
or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee
or held in the Trust pursuant to the direction of the Sponsor
(who may rely on the advice of the Portfolio Supervisor). Proceeds
from the sale of Equity Securities
Page 20
(or any securities or other property received by the Trust in
exchange for Equity Securities) by the Trustee are credited to
the Capital Account of the Trust for distribution to Unit holders
or to meet redemptions.
The Trustee may also sell Equity Securities designated by the
Sponsor, or if not so directed, in its own discretion, for the
purpose of redeeming Units of the Trust tendered for redemption
and the payment of expenses.
The Sponsor, in designating Equity Securities to be sold by the
Trustee, will generally make selections in order to maintain,
to the extent practicable, the proportionate relationship among
the number of shares of individual issues of Equity Securities.
To the extent this is not practicable, the composition and diversity
of the Equity Securities may be altered. In order to obtain the
best price for the Trust, it may be necessary for the Sponsor
to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
J.C. Bradford & Co., the Underwriter, is one of America's top
ten investment firms located outside New York City. Founded in
1927, J.C. Bradford & Co. is headquartered in Nashville, Tennessee
and currently has over 76 branch offices, primarily across the
southeast.
A major strength of the firm is its Research Department and its
investment council division, Bradford Investment Management. Among
other things, the Research Department provides its brokers with
detailed information on emerging companies, progress reports on
existing corporations, and updates on selected industries such
as the utility sector. Bradford Investment Management's area of
expertise is high-quality growth stocks for long-term appreciation.
J.C. Bradford & Co. is a member of the New York Stock Exchange
and the National Association of Securities Dealers Automated Quotation
System, Inc. (NASDAQ).
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 and Templeton Foreign Fund & U.S. Treasury Securities Trust.
First Trust introduced the first insured unit investment trust
in 1974 and to date more than $7.5 billion in First Trust unit
investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience
in the unit investment trust industry. The Sponsor is a member
of the National Association of Securities Dealers, Inc. and Securities
Investor Protection Corporation and has its principal offices
at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(708) 241-4141. As of August 31, 1993, the total partners' capital
of Nike Securities L.P. was $14,270,063 (unaudited). (This paragraph
relates only to the Sponsor and not to the Trust or to any series
thereof or to any other Underwriter. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its
contractual obligations. More detailed financial information will
be made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Trust may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
Page 21
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Equity Securities. For information relating
to the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Equity Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187. The Evaluator
may resign or may be removed by the Sponsor and the Trustee, in
which event the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
Page 22
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the
Mandatory Termination Date indicated herein under "Summary of
Essential Information." The Trust may be liquidated at any time
by consent of 100% of the Unit holders of the Trust or by the
Trustee when the value of the Equity Securities owned by the Trust,
as shown by any evaluation, is less than 40% of the total value
of Equity Securities deposited in such Trust during the primary
offering period, or in the event that Units of the Trust not yet
sold aggregating more than 60% of the Units of the Trust are tendered
for redemption by the Underwriter, including the Sponsor. If the
Trust is liquidated because of the redemption of unsold Units
of the Trust by the 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 the 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 the
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of the Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his address appearing on
the registration books of the Trust maintained by the Trustee.
At least 60 days prior to the Maturity Date of the Trust the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (reduced by customary
transfer and registration charges), if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment
in cash for such Unit holder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. To be
effective, the election form, together with surrendered certificates
and other documentation required by the Trustee, must be returned
to the Trustee at least five business days prior to the Mandatory
Termination Date of the Trust. Unit holders not electing a distribution
of shares of Equity Securities will receive a cash distribution
from the sale of the remaining Equity Securities within a reasonable
time after the Trust is terminated. Regardless of the distribution
involved, the Trustee will deduct from the funds of the Trust
any accrued costs, expenses, advances or indemnities provided
by the 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 Equity Securities in the Trust
upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. 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 statement of net assets, including the schedule of investments,
of the Trust at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
has been audited by Ernst & Young, independent auditors, as set
forth in their report thereon appearing elsewhere herein
and in the Registration Statement, and is included in reliance
upon such report given upon the authority of such firm as experts
in accounting and auditing.
Page 23
UNDERWRITING
The Underwriter named below has purchased Units in the following
amount:
<TABLE>
<CAPTION>
Number of
Name Address Units
________ ________ ________
<S> <C> <C>
Underwriter
J.C. Bradford & Co. 330 Commerce Street, Nashville, TN 37201-1809 50,000
========
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became
the owner of the Units of the Trust and entitled to the benefits
thereof, as well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the
Units of the Trust will be made at the Public Offering Price described
in the prospectus. Units may also be sold to or through dealers
and others during the initial offering period and in the secondary
market at prices representing a concession or agency commission
as described in "Public Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the
Trust as they become available. The Sponsor will receive from
the Underwriter the difference between the gross sales concession
and 3.5% of the Public Offering Price of the Units, which is retained
by the Underwriter.
Underwriters, dealers and others who, in a single month, purchase
from the Sponsor Units of any Series of The First Trust GNMA,
The First Trust of Insured Municipal Bonds, The First Trust Combined
Series, The First Trust Special Situations Trust, Templeton Growth
and Treasury Trust, Templeton Foreign Fund & U.S. Treasury Securities
Trust, The Advantage Growth and Treasury Securities Trust or any
other unit investment trust of which Nike Securities L.P. is the
Sponsor (the "UIT Units"), which sale of UIT Units are in the
following aggregate dollar amounts, will receive additional concessions
from the Sponsor as indicated in the following table:
<TABLE>
<CAPTION>
Aggregate Monthly Amount Additional Concession
of UIT Units Sold (per $1,000 sold)
________________ ________________
<S> <C>
$ 5,000,000 - $ 7,499,999 $1.50
$ 7,500,000 - $ 9,999,999 $2.00
$10,000,000 - $14,999,999 $3.00
$15,000,000 - $19,999,999 $4.00
$20,000,000 or more $5.00
</TABLE>
Aggregate Monthly Dollar Amount of UIT Units Sold is based on
settled trades for a month (including sales of UIT Units to the
Sponsor in the secondary market which are resold), net of redemptions.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of an Underwriter or
dealer may be eligible to win other nominal awards for certain
sales efforts, or under which the Sponsor will reallow to any
such Underwriter or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor
pay fees to qualifying Underwriters or dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that the Trust will receive from the Units
sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on the Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the
Page 24
full faith and credit of the U.S. Government and bank CDs and
money market accounts are insured by an agency of the federal
government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with
the condition of the short-term debt market. The investment characteristics
of the Trust are described more fully elsewhere in this Prospectus.
Page 25
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 90
We have audited the accompanying statement of net assets, including
the schedule of investments, of Utility Income Trust, Series 2,
comprising The First Trust Special Situations Trust, Series 90
as of the opening of business on February 16, 1994. This statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement
of net assets is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on February 16, 1994. An audit also includes assessing
the accounting principles used and significant estimates made
by the Sponsor, as well as evaluating the overall presentation
of the statement of net assets. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above
presents fairly, in all material respects, the financial position
of Utility Income Trust, Series 2, comprising The First Trust
Special Situations Trust, Series 90 at the opening of business
on February 16, 1994 in conformity with generally accepted accounting
principles.
ERNST & YOUNG
Chicago, Illinois
February 16, 1994
Page 26
Statement of Net Assets
Utility Income Trust, Series 2
The First Trust Special Situations Trust, Series 90
At the Opening of Business on the Initial Date of Deposit
February 16, 1994
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $ 474,621
========
Units outstanding 50,000
========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $ 499,076
Less sales charge (3) (24,455)
________
Net Assets $ 474,621
========
</TABLE>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $600,000 issued
by Bankers Trust Company has been deposited with the Trustee covering
the monies necessary for the purchase of the Equity Securities
pursuant to contracts for the purchase of such Equity Securities.
(3) The aggregate cost to investors includes a sales charge
computed at the rate of 4.9% of the Public Offering Price (equivalent
to 5.152% of the net amount invested), assuming no reduction of
sales charge for quantity purchases.
Page 27
Schedule of Investments
Utility Income Trust, Series 2
The First Trust Special Situations Trust, Series 90
At the Opening of Business on the Initial Date of Deposit
February 16, 1994
<TABLE>
<CAPTION>
Market
Percentage of Value Cost of Equity
Number Ticker Symbol and Aggregate per Securities
of Shares Name of Issuer of Equity Securities (1) Offering Price Share to Trust (2)
_________ _______________________________________ ______________ ______ ______________
<S> <C> <C> <C> <C>
362 T American Telephone &
Telegraph Company-AT&T 4.18% $ 54.750 $ 19,819
480 AIT Ameritech Corporation 4.17% 41.250 19,800
360 BEL Bell Atlantic Corporation 4.16% 54.875 19,755
741 BU Brooklyn Union Gas Company 4.18% 26.750 19,822
741 CSR Central & South West Corporation 4.18% 26.750 19,822
472 DOMR Dominion Resources, Inc. 4.20% 42.250 19,942
991 DPL DPL, Inc. 4.20% 20.125 19,944
500 DUK Duke Power Company 4.17% 39.625 19,812
564 ETR Entergy Corporation 4.14% 34.875 19,669
663 FPC Florida Progress Corporation 4.17% 29.875 19,807
689 GPU General Public Utilities Corporation 4.16% 28.625 19,723
537 LGE LG & E Energy Corporation 4.17% 36.875 19,802
541 NES New England Electric System 4.19% 36.750 19,882
1,057 NMK Niagara Mohawk Power Corporation 4.15% 18.625 19,687
655 NI NIPSCO Industries, Inc. 4.21% 30.500 19,977
558 NWNG Northwest Natural Gas Company 4.17% 35.500 19,809
730 PE PECO Energy Company 4.13% 26.875 19,619
927 PNW Pinnacle West Capital Corporation 4.20% 21.500 19,930
658 PEG Public Service Enterprise Group, Inc. 4.13% 29.750 19,575
477 SO Southern Company 4.16% 41.375 19,736
523 SBC Southwestern Bell Corporation 4.17% 37.875 19,809
949 TE TECO Energy, Inc. 4.12% 20.625 19,573
469 USW US West, Inc. 4.13% 41.750 19,581
793 WEC Wisconsin Energy Corporation 4.16% 24.875 19,726
______ ______________
Total Investment 100% $ 474,621
====== ==============
</TABLE>
[FN]
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on February 15, 1994.
(2) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of the
listed Equity Securities and the ask prices of the over-the-counter
traded Equity Securities). The valuation of the Equity Securities
has been determined by the Evaluator, certain shareholders of
which are officers of the Sponsor. The aggregate underlying value
of the Equity Securities on the Initial Date of Deposit was $474,621.
Cost and loss to Sponsor relating to the Equity Securities sold
to the Trust were $475,612 and $991, respectively.
Page 28
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Page 29
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Page 30
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Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
Utility Income Trust, Series 2
The First Trust Special Situations Trust, Series 90:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 6
Why are Investments in the Trust Suitable for
Retirement Plans? 8
Portfolio:
What are Equity Securities? 8
How were the Equity Securities Selected? 11
What are the Equity Securities Selected for
Utility Income Trust, Series 2? 11
What are Some Additional Considerations
for Investors? 13
Public Offering:
How is the Public Offering Price Determined? 14
How are Units Distributed? 15
What are the Sponsor's Profits? 16
Will There be a Secondary Market? 16
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 16
How are Income and Capital Distributed? 17
What Reports will Unit Holders Receive? 18
How May Units be Redeemed? 18
How May Units be Purchased by the Sponsor? 20
How May Equity Securities be Removed
from the Trust? 20
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 21
Who is the Sponsor? 21
Who is the Trustee? 21
Limitations on Liabilities of Sponsor and Trustee 22
Who is the Evaluator? 22
Other Information:
How May the Indenture be Amended
or Terminated? 22
Legal Opinions 23
Experts 23
Underwriting 24
Report of Independent Auditors 26
Statement of Net Assets 27
Notes to Statement of Net Assets 27
Schedule of Investments 28
___________
</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 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.
J.C. Bradford & Co.
Utility Income Trust
Series 2
J. C. Bradford & Co.
330 Commerce Street
Nashville, TN 37201-1809
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
February 16, 1994
Page 32
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 90, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1
and The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, for purposes of
the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
90, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
February 16, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 90
By NIKE SECURITIES L.P.
Depositor
By Carlos E. Nardo
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) February 16, 1994
General Partner of )
Nike Securities L.P. )
)
)
) Carlos E. Nardo
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Special Situations Trust, Series 18 (File No. 33-42683) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated February 16, 1994 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 33-51913) and related Prospectus of The First Trust Special
Situations Trust, Series 90.
ERNST & YOUNG
Chicago, Illinois
February 16, 1994
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF SECURITIES EVALUATION SERVICE, INC.
The consent of Securities Evaluation Service, Inc. to the
use of its name in the Prospectus included in the Registration
Statement will be filed as Exhibit 4.1 to the Registration
Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 90 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York, as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and First Trust Advisors
L.P., as Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of Securities Evaluation Service, Inc.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
-1-
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 90
TRUST AGREEMENT
Dated: February 16, 1994
This Trust Agreement among Nike Securities L.P., as
Depositor, United States Trust Company of New York, as Trustee,
Securities Evaluation Service, Inc., as Evaluator, and First
Trust Advisors L.P., as Portfolio Supervisor, sets forth certain
provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust
for The First Trust Special Situations Trust, Series 22 and
certain subsequent Series, Effective November 20, 1991" (herein
called the "Standard Terms and Conditions of Trust"), and such
provisions as are incorporated by reference constitute a single
instrument. All references herein to Articles and Sections are
to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 50,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/50,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
4.18% American Telephone & Telegraph Company-AT&T,
4.17% Ameritech Corporation, 4.16% Bell Atlantic
Corporation, 4.18% Brooklyn Union Gas Company,
4.18% Central & South West Corporation, 4.20%
Dominion Resources, Inc., 4.20% DPL, Inc., 4.17%
Duke Power Company, 4.14% Entergy Corporation, 4.17%
Florida Progress Corporation, 4.16% General Public
Utilities Corporation, 4.17% LG & E Energy
Corporation, 4.19% New England Electric System,
4.15% Niagara Mohawk Power Corporation, 4.21% NIPSCO
Industries, Inc., 4.17% Northwest Natural Gas Company,
4.13% PECO Energy Company, 4.20% Pinnacle West Capital
Corporation, 4.13% Public Service Enterprise Group,
Inc., 4.16% Southern Company, 4.17% Southwestern Bell
Corporation, 4.12% TECO Energy, Inc., 4.13% US West,
Inc., 4.16% Wisconsin Energy Corporation.
D. The Record Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
E. The Distribution Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
February 1, 2000.
G. The Evaluator's compensation as referred to in Section
4.03 of the Standard Terms and Conditions of Trust shall be an
annual fee of $0.17 per 100 Units calculated on the largest
number of Units outstanding during each period in respect of
which a payment is made pursuant to Section 3.05, payable on a
Distribution Date. The minimum and maximum evaluation fee for any
one calendar year will be $1,000 and $2,500, respectively.
H. The Trustee's Compensation Rate pursuant to Section
6.04 of the Standard Terms and Conditions of Trust shall be an
annual fee of $.74 per 100 Units, calculated on the largest
number of Units outstanding during each period in respect of
which a payment is made pursuant to Section 3.05. However, in no
event, except as may be otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive compen
sation in any one year from any Trust of less than $2,000 for
such annual compensation.
I. The Initial Date of Deposit for the Trust is February
16, 1994.
K. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
B. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute to
each Unit holder of record at the close of business on the Record
Date immediately preceding such Distribution Date an amount per
Unit equal to such Unit holder's pro rata share of the balance of
the Principal Account (except for monies on deposit therein
required to purchase Contract Obligations) computed as of the
close of business on such Record Date after deduction of any
amounts provided in Subsection I, provided, however, that with
respect to distributions other than the distribution occurring in
the month of December of each year, the Trustee shall not be
required to make a distribution from the Principal Account unless
the amount available for distribution shall equal $1.00 per 1000
Units in the case of Units initially offered at approximately
$1.00 per Unit, or, $1.00 per 100 Units in the case of Units
initially offered at approximately $10.00 per Unit."
C. For purposes of this Trust, all references in the
Standard Terms and Conditions of Trust including provisions
thereof amended hereby to "$1.00 per Unit" shall be amended to
read "$10.00 per Unit" and all references to "per 1,000 Units"
shall be amended to read "per 100 Units."
D. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following new paragraph after the
second paragraph of such section:
"In lieu of a cash redemption, Unit holders tendering 2,500
Units or more for redemption may request from the Trustee by
written notice submitted at the time of tender an in kind
distribution of shares of Securities, to the extent of whole
shares. To the extent possible, in kind distributions of
Securities shall be made by the Trustee through the distribution
of each of the Securities in book-entry form to the account of
the Unit holder's bank or broker-dealer at the Depository Trust
Company. An in kind distribution will be reduced by all expenses
in connection with customary transfer and registration charges.
The tendering Unit holder will receive his pro rata number of
whole shares of each of the Securities comprising the portfolio
and cash from the Principal Account equal to the fractional
shares to which the tendering Unit holder is entitled. The
Trustee may, but shall not be required to, adjust the number of
shares of any issue of 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
Securities on the date of tender. If funds in the Principal
Account are insufficient to cover the required cash distribution
to the tendering Unit holder, the Trustee may sell Securities in
the manner described in this Section 5.02."
E. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended to delete the reference to "100,000 Units"
and substitute "2,500 Units" in the third sentence of the second
paragraph thereof.
IN WITNESS WHEREOF, Nike Securities L.P., United States
Trust Company of New York, Securities Evaluation Service, Inc.
and First Trust Advisors L.P. have each caused this Trust
Agreement to be executed and the respective corporate seal to be
hereto affixed and attested (if applicable) by authorized
officers; all as of the day, month and year first above written.
NIKE SECURITIES L.P.,Depositor
By Carlos E. Nardo
Senior Vice President
UNITED STATES TRUST COMPANY OF NEW
YORK, Trustee
(SEAL) By Thomas Porrazzo
Vice President
Attest:
Rosalia A. Raviele
Assistant Secretary SECURITIES EVALUATION SERVICE,
INC., Evaluator
(SEAL) By James R. Couture
President
Attest:
James G. Prince
Vice President and
Assistant Secretary
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Carlos E. Nardo
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 90
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
February 16, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 90
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 90 in connection with the preparation, execution
and delivery of a Trust Agreement dated February 16, 1994 among
Nike Securities L.P., as Depositor, United States Trust Company
of New York, as Trustee, Securities Evaluation Service, Inc., as
Evaluator, and First Trust Advisors L.P., as Portfolio
Supervisor, pursuant to which the Depositor has delivered to and
deposited the Securities listed in Schedule A to the Trust
Agreement with the Trustee and pursuant to which the Trustee has
issued to or on the order of the Depositor a certificate or
certificates representing units of fractional undivided interest
in and ownership of the Fund created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-51913)
relating to the Units referred to above, to the use of our name
and to the
reference to our firm in said Registration Statement and in
the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jlg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60661
February 16, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
United States Trust Company of New York
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 90
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 90 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trust of said Fund (the "Trust"),
under a Trust Agreement, dated February 16, 1994 (the
"Indenture"), among Nike Securities L.P., as Depositor, United
States Trust Company of New York, as Trustee, Securities
Evaluation Service, Inc., as Evaluator and First Trust Advisors
L.P., as Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds Equity Securities as such term is defined in the
Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of the assets
of the Trust under the Internal Revenue Code of 1986, as amended
(the "Code"); the income of the Trust will be treated as income
of the Unit holders thereof under the Code; and an item of Trust
income will have the same character in the hands of a Unit holder
as it would have in the hands of the Trustee. Each Unit holder
will be considered to have received his pro rata share of income
derived from each Trust asset when such income is received by the
Trust.
II. Each Unit holder will have a taxable event when the
Trust disposes of an Equity Security (whether by sale, exchange,
redemption, or otherwise) 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 Equity Security held by the Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases
his Units) in order to determine his initial cost for his pro
rata portion of each Equity Security held by the Trust. For
Federal income tax purposes, a Unit holder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a
corporation 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 which exceed such
current and accumulated earnings and profits will first reduce a
Unit holder's tax basis in such Equity Security (and accordingly
his basis in his Units), and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall be
treated as gain from the sale or exchange of property.
III. A Unit holder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Securities held by
the Trust will generally be considered a capital gain except in
the case of a dealer or a financial institution and will be
generally long-term if the Unit holder has held his Units for
more than one year. A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of
Securities held by the Trust will generally be considered a
capital loss except in the case of a dealer or a financial
institution and will be generally long-term if the Unit holder
has held his Units for more than one year.
IV. The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they exceed two
percent of an individual taxpayer's adjusted gross income.
Miscellaneous itemized deductions subject to this limitation
under present law include a Unit holder's pro rata share of
expenses paid by the Trust, including fees of the Trustee and the
Evaluator.
For taxable years beginning after December 31, 1986 and
before January 1, 1996, certain corporations may be subject to
the environmental tax (the "Superfund Tax") imposed by Section
59A of the Code. Income received from, and gains recognized from
the disposition of, an Equity Security by the Trust will be
included in the computation of the Superfund Tax by such
corporations holding Units in the Trust.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-51913)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jlg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
February 16, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 90
Utility Income Trust, Series 2
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 90
Utility Income Trust, Series 2
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
90 Utility Income Trust, Series 2 (the "Trust"), which will be
established under a Standard Terms and Conditions of Trust dated
November 20, 1991, and a related Trust Agreement dated as of
today (collectively, the "Indenture"), among Nike Securities
L.P., as Depositor (the "Depositor"); Securities Evaluation
Service, Inc., as Evaluator; First Trust Advisors L.P., as
Portfolio Supervisor and United States Trust Company of New York,
as Trustee (the "Trustee"). Pursuant to the terms of the
Indenture, units of fractional undivided interest in the Trust
(the "Units") will be issued in the aggregate number set forth in
the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 33-51913) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit Holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
February 16, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 90
Utility Income Trust, Series 2
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 90
Utility Income Trust, Series 2
Dear Sirs:
We are acting as counsel for United States Trust Company of
New York (the "Trust Company") in connection with the execution
and delivery of a Standard Terms and Conditions of Trust dated
November 20, 1991, and a related Trust Agreement, dated today's
date (collectively, the "Indenture"), among Nike Securities L.P.,
as Depositor (the "Depositor"); Securities Evaluation Service,
Inc., as Evaluator; First Trust Advisors L.P., as Portfolio
Supervisor; and the Trust Company, as Trustee (the "Trustee"),
establishing The First Trust Special Situations Trust, Series 90
Utility Income Trust, Series 2 (the "Trust"), and the execution
by the Trust Company, as Trustee under the Indenture, of a
certificate or certificates evidencing ownership of units (such
certificate or certificates and such aggregate units being herein
called "Certificates" and "Units"), each of which represents an
undivided interest in the Trust, which consists of common stocks
(including confirmations of contracts for the purchase of certain
obligations not delivered and cash, cash equivalents or an
irrevocable letter of credit or a combination thereof, in the
amount required for such purchase upon the receipt of such
obligations), such obligations being defined in the Indenture as
Securities and listed in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. The Trust Company is a duly organized and existing
corporation having the powers of a trust company under the laws
of the State of New York.
2. The Indenture has been duly executed and delivered by
the Trust Company and, assuming due execution and delivery by the
other parties thereto, constitutes the valid and legally binding
obligation of the Trust Company.
3. The Certificates are in proper form for execution and
delivery by the Trust Company, as Trustee.
4. The Trust Company, as Trustee, has duly executed and
delivered to or upon the order of the Depositor a Certificate or
Certificates evidencing ownership of the Units, registered in the
name of the Depositor. Upon receipt of confirmation of the
effectiveness of the registration statement for the sale of the
Units filed with the Securities and Exchange Commission under the
Securities Act of 1933, the Trustee may deliver such other
Certificates, in such names and denominations as the Depositor
may request, to or upon the order of the Depositor as provided in
the Closing Memorandum.
5. The Trust Company, as Trustee, may lawfully under the
New York Banking Law advance to the Trust amounts as may be
necessary to provide monthly interest distributions of
approximately equal amounts, and be reimbursed, without interest,
for any such advances from funds in the interest account on the
ensuing record date, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
SES
Securities Evaluation Service, Inc.
Suite 200
531 E. Roosevelt Road
Wheaton, Illinois 60187
February 16, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 90
Gentlemen:
We have examined the Registration Statement File No. 33-
51913 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to Securities
Evaluation Service, Inc. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
Securities Evaluation Service, Inc.
James R. Couture
President
