SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of UnitInvestment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES 94
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's Suite 300
Principal Executive Offices: 1001 Warrenville Road
Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
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 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 the Public: --- Check if it is proposed
that this filing will
become effective on ----
at --- p.m. pursuant to
Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER 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 Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
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 Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan 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
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
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
disposition of income Rights of Unit Holders
(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 and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor 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 other *
persons 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
securities by states Public Offering
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;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
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 Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee 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 OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities 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. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
Preliminary Prospectus Dated April 20, 1994
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
10,000 Units (A Unit Investment Trust)
The attached final Prospectus for a prior Series of the Fund
is hereby used as a preliminary Prospectus for the above stated
Series. The narrative information and structure of the attached
final Prospectus will be substantially the same as that of the
final Prospectus for this Series. Information with respect to
pricing, the number of Units, dates and summary information
regarding the characteristics of securities to be deposited in
this Series is not now available and will be different since each
Series has a unique Portfolio. Accordingly the information
contained herein with regard to the previous Series should be
considered as being included for informational purposes only.
Ratings of the securities in this Series are expected to be
comparable to those of the securities deposited in the previous
Series. However, the Estimated Current Return for this Series
will depend on the interest rates and offering prices of the
securities in this Series and may vary materially from that of
the previous Series.
A registration statement relating to the units of this
Series will be filed with the Securities and Exchange Commission
but has not yet become effective. Information contained herein
is subject to completion or amendment. Such Units may not be
sold nor may offer to buy be accepted prior to the time the
registration statement becomes effective. This Prospectus shall
not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of the Units in any state in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such state.
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2
The Trust. The First Trust Special Situations Trust, Series 81
(the "Trust") is a unit investment trust consisting of a portfolio
of taxable U.S. Treasury Securities that are backed by the full
faith and credit of the United States Government, delivery statements
relating to contracts for the purchase of certain such securities
and an irrevocable letter of credit (the "Securities"). All of
the U.S. Treasury Securities in Series 2 of the Trust consist
of maturities of approximately 2.5-6.5 years which are "laddered"
to return approximately 15.4% of the Unit holders' principal annually
for four periods ranging from 1996 through 1999, with a final
distribution of approximately 38.4% of the Unit holders' principal
in the year 2000.
The objective of the Trust is to obtain safety of capital and
current monthly distributions of interest through an investment
in a fixed portfolio of Securities. Series 2 of the Trust will
be a "laddered" portfolio to provide flexibility of principal
investment with maturities ranging from 1996 to 2000 The average
weighted maturity of the Trust will be no less than two years
nor more than five years. With the deposit of the Securities in
the Trust on October 21, 1993, the Initial Date of Deposit, the
Sponsor established for Series 2 a percentage relationship between
the principal amount of Securities of specified interest rates
and ranges of maturities in the related Portfolio. From time to
time, pursuant to the Indenture, following the Initial Date of
Deposit, the Sponsor may deposit additional Securities in Series
2 of 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 Securities deposited in Series 2 of the Trust will
maintain as far as practicable the original percentage relationship
between the principal amounts of Securities of specified interest
rates and ranges of maturities in the original Portfolio of the
Trust.
The guaranteed payment of interest and principal afforded by the
Securities may make an investment in Series 2 of the Trust particularly
well suited for purchase by Individual Retirement Accounts, Keogh
Plans, pension funds and other tax-deferred retirement plans.
In addition, the ability to buy single Units (minimum purchase
$1,000, $250 for tax-deferred retirement plans such as IRA accounts)
during the initial offering period at a Public Offering Price
per Unit of approximately $1.00 enables such investors to tailor
the dollar amount of their purchases of Units to take the maximum
possible advantage of the annual deductions available for contributions
to such plans. Investors should consult with their tax advisers
before investing. See "Why are Investments in Series 2 of the
Trust Suitable for Retirement Plans?"
STANDARD & POOR'S CORPORATION HAS RATED UNITS OF EACH SERIES OF
THE TRUST "AAA." THIS IS THE HIGHEST RATING ASSIGNED BY STANDARD
& POOR'S CORPORATION. SEE "WHAT IS THE RATING OF THE UNITS?" AND
"DESCRIPTION OF STANDARD & POOR'S CORPORATION RATING."
Attention Foreign Investors: Your interest income from the Trust
may be exempt from federal withholding taxes if you are not a
United States citizen or resident and certain conditions are met.
See "What is the Federal Tax Status of Unit Holders?"
For Information on Estimated Current Return (if applicable) and
Estimated Long-Term Return including the estimated life of the
portfolio of Series 2 of the Trust, see "Special Information."
Estimated cash flows for Series 2 of the Trust are set forth herein
under "Estimated Cash Flows to Unit Holders."
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.
First Trust
The date of this Prospectus is October 21, 1993
Page 1
The Public Offering Price per 1,000 Units is equal to the aggregate
offering price of the Securities in the portfolio of a Series
of the Trust and the amount of Purchased Interest for each Trust
divided by the number of Units outstanding multiplied by 1,000,
plus a sales charge of 1.95% of the Public Offering Price (1.989%
of the net amount invested) for Series 2. In addition, on transactions
entered into for settlement after October 28, 1993, there will
be added an amount equal to accrued interest from October 28,
1993 to the date of settlement (five business days after order)
less distributions from the Interest Account subsequent to October
28, 1993. The secondary market Public Offering Price per 1,000
Units will be equal to the aggregate bid price of the Securities
in the portfolio of a Series of the Trust and the amount of Purchased
Interest for each Trust divided by the number of Units outstanding
multiplied by 1,000, plus a sales charge of 1.95% of the public
offering price (1.989% of the net amount invested) for Series
2. At the opening of business on the Initial Date of Deposit,
October 21, 1993, the Public Offering Price per 1,000 Units would
have been $1,000 for Series 2. The sales charge is reduced on
a graduated scale for sales involving at least $500,000. See "How
is the Public Offering Price Determined?", particularly for the
method of evaluation.
Each Unit represents an undivided interest in the principal, Purchased
Interest and net income of a Series of the Trust in the ratio
of one Unit for each $1.00 principal amount of Securities initially
deposited in such Series.
Distributions of interest received by a Series of the Trust will
be paid in cash monthly unless the Unit holder elects to have
them automatically reinvested as described herein. See "How Can
Distributions to Unit Holders be Reinvested?" Monthly distributions
will be made on the last day of each month to all Unit holders
of record on the 15th day of such month, commencing with the First
Distribution on November 30, 1993 to Unit holders of record on
November 15, 1993.
The Sponsor, although not obligated to do so, intends to maintain
a market for the Units of Series 2 at prices based upon the aggregate
offering price of the Securities in the portfolio of Series 2
of the Trust during the initial offering period and at prices
based upon the aggregate bid price of the Securities in the portfolio
of Series 2 of the Trust after the initial offering period. In
the absence of such a market, a Unit holder will nonetheless be
able to dispose of the Units through redemption at prices based
upon the bid prices of the underlying Securities. See "How May
Units be Redeemed?"
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-October 21, 1993
<TABLE>
<CAPTION>
<S> <C>
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
General Information
Principal Amount of Securities in the Trust $ 1,950,000
Number of Units 1,949,000
Fractional Undivided Interest in the Trust per Unit 1/1,949,000
Principal Amount (Par Value) of Securities per 1,000 Units $ 1,000.51
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $ 1,897,065
Aggregate Offering Price Evaluation per 1,000 Units $ 973.35
Purchased Interest (1) $ 13,938
Purchased Interest per 1,000 Units (1) $ 7.15
Sales Charge (2) $ 19.50
Public Offering Price per 1,000 Units (1) $ 1,000.00
Sponsor's Initial Repurchase Price per 1,000 Units, including
Purchased Interest (1) $ 980.50
Redemption Price per 1,000 Units, including Purchased Interest (3) $ 976.98
Excess of Public Offering Price per 1,000 Units Over Redemption
Price per 1,000 Units $ 23.02
Excess of Sponsor's Initial Repurchase Price per 1,000 Units Over
Redemption Price per 1,000 Units $ 3.52
</TABLE>
First Settlement Date October 28, 1993
Mandatory Termination Date December 31, 2000
Discretionary Liquidation Amount A Trust may be terminated if
the principal amount thereof is less than the lower of $1,000,000
or 10% of the total principal amount of Securities deposited in
a Trust during the primary offering period.
Supervisory Fee Maximum of $.10 per 1,000 Units outstanding annually. (4)
Evaluator's Fee $.25 per 1,000 Units outstanding annually.
Evaluations for purposes of sale, purchase or redemption of Units
are made at 4:00 p.m. Eastern time.
[FN]
______________
(1) Purchased Interest is a portion of the unpaid interest that
has accrued on the Securities from the later of the last payment
date on the Securities or the date of issuance thereof through
the First Settlement Date and is included in the calculation of
the Public Offering Price. Purchased Interest will not be distributed
to Unit holders until the Securities to which the Purchased Interest
relates are sold or mature, or until the sale or redemption of
Units by Unit holders prior to the termination of the Trust. Anyone
ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally five business days after order) less distributions from
the Interest Account subsequent to the First Settlement Date.
For purchases settling on the First Settlement Date, no accrued
interest will be added to the Public Offering Price other than
the Purchased Interest already included therein. After the initial
offering period, the Sponsor's Repurchase Price per 1,000 Units,
will be determined as described under the caption "Will There
Be a Secondary Market?"
(2) Sales charges for the Trust, expressed as a percentage of
the Public Offering Price per Unit and in parenthesis as a percentage
of the Aggregate Offering Price Evaluation per 1,000 Units, are
as follows: 1.95% (1.989%) for Series 2.
(3) See "How May Units be Redeemed?"
(4) Payable to an affiliate of the Sponsor.
Page 3
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2
The First Trust Special Situations Trust, Series 81
What is the First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 81 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:
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
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 $1,950,000 for Series 2
principal amount of taxable, interest-bearing and zero coupon
U.S. Treasury Obligations, delivery statements relating to contracts
for the purchase of certain such obligations and an irrevocable
letter of credit issued by a financial institution in the amount
required for such purchases (the "Securities"). The Trustee thereafter
credited to the account of the Sponsor 1,949,000 Units for Series
2 representing the entire ownership of the Trust at the Initial
Date of Deposit, which Units are being offered hereby.
The objective of each Series of the Trust is to obtain safety
of capital and current monthly distributions of interest through
an investment in a fixed portfolio of taxable U.S. Treasury Securities.
Series 2 of the Trust will be a "laddered" portfolio to provide
flexibility of principal investment with maturities ranging from
1996 to 2000. The Trust may be an appropriate medium for investors
who desire to participate in a portfolio of taxable fixed income
securities offering the safety of capital provided by securities
backed by the full faith and credit of the United States but who
do not wish to invest the minimum amount which is required for
a direct investment in the Securities. Because regular payments
of principal are to be received in accordance with the "laddered"
maturities of the Securities and certain Securities may be sold
under circumstances described herein, and because additional Securities
may be deposited in the Trust as described herein, the Trust is
not expected to retain its present size and composition. Units
will remain outstanding until redeemed upon tender to the Trustee
by any Unit holder (which may include the Sponsor) or until the
termination of a Series of the Trust pursuant to the Indenture.
Many investors in the First Trust U.S. Treasury Securities Trust,
Short-Intermediate Series may benefit from the exemption from
state and local personal income taxes that will pass through the
Trust to Unit holders in all states. The Trust has the additional
purpose of providing income which is exempt from withholding for
U.S. Federal income taxes for non-resident alien investors. A
foreign investor must provide a completed W-8 Form to his financial
representative or the Trustee to avoid withholding on his account.
In selecting the Securities for deposit in the Trust, the following
factors, among others, were considered by the Sponsor: (i) the
types of such securities available; (ii) the prices and yields
of such securities relative to other comparable securities, including
the extent to which such securities are trading at a premium or
at a discount from par; (iii) whether the Securities were issued
after July 18, 1984; and (iv) the maturities of such securities.
See "Portfolio" for information with respect to the Securities
initially selected for deposit in the Trust.
The Portfolio of the Trust may contain Securities which were acquired
at a market discount. Such Securities trade at less than par value
because the interest coupons thereon are lower than interest coupons
on comparable debt securities being issued at currently prevailing
interest rates. If such interest rates for newly issued and otherwise
comparable securities increase, the market discount of previously
issued securities will become greater, and if such interest rates
for newly issued comparable securities decline, the market discount
of previously issued securities will be reduced, other things
being equal. Investors should also note that the value of Securities
purchased at a market discount will increase in value faster than
Securities purchased at a market premium if interest rates decrease.
Conversely, if interest rates increase the value of Securities
Page 4
purchased at a market discount will decrease faster than Securities
purchased at a premium. Market discount attributable to interest
changes does not indicate a lack of market confidence in the issue.
Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the Securities.
The Portfolio of the Trust contains U.S. Treasury Obligations
which have been stripped of their unmatured interest coupons.
The zero coupon Securities evidence the right to receive a fixed
payment at a future date from the U.S. Government, and are backed
by the full faith and credit of the U.S. Government. Zero coupon
Securities are purchased at a deep discount because the buyer
obtains only the right to a fixed payment at a fixed date in the
future and does not receive any periodic interest payments. The
effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon Securities) is that
a fixed yield is earned not only on the original investment, but
also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income
on such obligations at a rate as high as the implicit yield on
the discount obligation, but at the same time eliminates the holder's
ability to reinvest at higher rates in the future. For this reason,
the zero coupon Securities are subject to substantially greater
price fluctuations during periods of changing interest rates than
are securities of comparable quality which make regular interest
payments.
The Portfolio of the Trust may contain Securities which were acquired
at a market premium. Such Securities trade at more than par value
because the interest coupons thereon are higher than interest
coupons on comparable debt securities being issued at currently
prevailing interest rates. If such interest rates for newly issued
and otherwise comparable securities decrease, the market premium
of previously issued securities will be increased, and if such
interest rates for newly issued comparable securities increase,
the market premium of previously issued securities will be reduced,
other things being equal. The current returns of securities trading
at a market premium are initially higher than the current returns
of comparably rated debt securities of a similar type issued at
currently prevailing interest rates because premium securities
tend to decrease in market value as they approach maturity when
the face amount becomes payable. Market premium attributable to
interest changes does not indicate market confidence in the issue.
The contracts to purchase Securities delivered to the Trustee
represent an obligation by issuers or dealers to deliver Securities
to the Sponsor for deposit in the Trust. Contracts are typically
settled and the Securities delivered within a few business days
subsequent to the Initial Date of Deposit. The percentage of the
aggregate principal amount of the Securities, if any, relating
to "when, as and if issued" Securities or other Securities with
delivery dates after the date of settlement for a purchase made
on the Initial Date of Deposit is indicated in the Portfolio.
Interest on "when, as and if issued" and delayed delivery Securities
begins accruing to the benefit of Unit holders on their dates
of delivery. Because "when, as and if issued" Securities have
not yet been issued, as of the Initial Date of Deposit the Trust
is subject to the risk that the issuers thereof might decide not
to proceed with the offering of such Securities or that the delivery
of such Securities or the delayed delivery Securities may be delayed.
If such Securities, or replacement securities described below,
are not acquired by the Trust or if their delivery is delayed,
the Estimated Returns shown under "Special Information" may be
reduced.
In the event of a failure to deliver any Securities that have
been purchased for a Series of the Trust under a contract ("Failed
Securities"), the Sponsor is authorized under the Indenture to
direct the Trustee to acquire other specified securities ("Replacement
Securities") to make up the original corpus of the Series of the
Trust. The Replacement Securities must be purchased within 20
days after delivery of the notice of the failed contract and the
purchase price (exclusive of accrued interest) may not exceed
the amount of funds reserved for the purchase of the Failed Securities.
The Replacement Securities (i) must satisfy the criteria previously
described for Securities originally included in a Series of the
Trust, (ii) must maintain as far as practicable the original percentage
relationship between the principal amounts of Securities of specified
interest rates and years of maturities in the Portfolio, and (iii)
shall not be "when, as and if issued" securities. Whenever Replacement
Securities have been acquired for a Series of the Trust, the Trustee
shall, within five days thereafter, notify all Unit holders of
such Series of the Trust of the acquisition of the Replacement
Securities
Page 5
and shall, on the next monthly distribution date which is more
than 30 days thereafter, make a pro rata distribution of the amount,
if any, by which the cost to the affected Series of the Trust
of the Failed Securities exceeded the cost of the Replacement
Securities plus accrued interest. Except as provided below, once
the original corpus of the Trust is acquired, the Trustee will
have no power to vary the investment of a Series 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.
If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Securities
in the event of a failed contract, the Sponsor shall refund the
sales charge and the Purchased Interest attributable to such failed
contract pro rata to all Unit holders, and the principal and accrued
interest (at the coupon rate of the relevant Securities to the
date the Sponsor is notified of the failure) attributable to such
failed contract shall be distributed not more than thirty days
after the determination of such failure or at such earlier time
as the Trustee in its sole discretion deems to be in the interest
of the Unit holders. Unit holders should be aware that at the
time of the receipt of such refunded principal they may not be
able to reinvest such principal in other securities at a yield
equal to or in excess of the yield which such principal would
have earned for Unit holders had the Failed Securities been delivered
to a Series of the Trust.
The Sponsor may, from time to time, deposit additional Securities
in Series 2 of the Trust (while additional Units are to be offered
to the public) maintaining, as close as practicable, the original
percentage relationship between the principal amounts of Securities
of specified interest rates and years of maturities in the Portfolio
of such Series. With respect to Series 2 of the Trust, the Sponsor
has the limited right to direct the Trustee to purchase additional
securities, which must satisfy the criteria previously described
for Securities originally included in Series 2 of the Trust, with
moneys held in the Principal Account of Series 2 of the Trust
representing the proceeds of Securities sold as described under
the caption "How May Securities be Removed from the Trust?" or
the proceeds of Securities sold which proceeds are not required
for the purpose of redemption of Units.
Each Unit initially offered represents the fractional undivided
interest in a Series of the Trust set forth in the "Summary of
Essential Information." To the extent that any Units are redeemed
by the Trustee, the fractional undivided interest in a Series
of the Trust represented by each unredeemed Unit will increase,
although the actual interest in such Series represented by such
fraction will remain substantially unchanged. However, if additional
Units are issued by Series 2 of the Trust (in connection with
the deposit by the Sponsor of additional Securities), the aggregate
value of Securities in such Series of the Trust will be increased
by amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit in the balance will be decreased.
Units will remain outstanding until redeemed upon tender to the
Trustee by any Unit holder, which may include the Sponsor, or
until the termination of the Indenture.
Special Considerations. The Securities are direct obligations
of the United States and are backed by its full faith and credit
although the Units of the Trust are not so backed. The Securities
are not rated but in the opinion of the Sponsor have credit characteristics
comparable to those of securities rated "AAA" by nationally recognized
rating agencies.
An investment in Units of the Trust should be made with an understanding
of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the Securities
and hence the Units will decline with increases in interest rates.
The high inflation of prior years, together with the fiscal measures
adopted to attempt to deal with it, have resulted in wide fluctuations
in interest rates and, thus, in the value of fixed rate debt obligations
generally. The Sponsor cannot predict whether such fluctuations
will continue in the future.
What is the Rating of the Units?
Standard & Poor's Corporation has rated Units of each Series of
the Trust "AAA." This is the highest rating assigned by Standard
& Poor's Corporation. See "Description of Standard & Poor's Corporation
Rating." The obtaining of this rating by the Trust should not
be construed as an approval of the offering of the Units by Standard
& Poor's Corporation or as a guarantee of the market value of
a Series of the Trust or the Units. Standard & Poor's Corporation
has indicated that this rating is not a recommendation to buy,
hold or sell
Page 6
Units nor does it take into account the extent to which expenses
of a Series of the Trust or sales by the Trust of Securities for
less than the purchase price paid by a Series of the Trust will
reduce payment to Unit holders of the interest and principal required
to be paid on such Securities. There is no guarantee that the
"AAA" investment rating with respect to the Units will be maintained.
Standard & Poor's Corporation will be compensated by the Sponsor
for its services in rating Units of a Series of the Trust.
What are Estimated Current Return and Estimated Long-Term Return?
Debt securities are customarily offered to investors on a "yield
price" basis (as contrasted to a "dollar price" basis) at the
lesser of the price as computed to maturity of such debt security
or to an earlier redemption date. Since Units of each Series of
the Trust are offered on a dollar price basis, the estimated rate
of return on an investment in Units of a Series of the Trust is
stated in terms of "Estimated Current Return and Estimated Long-Term
Return."
At the opening of business on the Initial Date of Deposit, the
Estimated Current Return (if applicable) and the Estimated Long-Term
Return for each Series is as set forth in the "Special Information"
herein. Estimated Current Return is computed by multiplying the
Estimated Net Annual Interest Rate per 1,000 Units by $1,000 and
dividing the result by the Public Offering Price per 1,000 Units.
The Estimated Net Annual Interest Rate per Unit will vary with
changes in fees and expenses of the Trustee and the Evaluator
and with the principal prepayment, redemption, maturity, exchange
or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Current Return
does not take into account timing of distributions of income and
other amounts (including delays in distribution to Unit Holders),
and it only partially reflects the effects of premiums paid and
discounts realized in the purchase price of Units.
Unlike Estimated Current Return, Estimated Long-Term Return is
a measure of the estimated return to the investor earned over
the estimated life of a Series of the Trust. The Estimated Long-Term
Return represents an average of the yields to estimated retirements
of the Securities in a Series of the Trust and adjusted to reflect
expenses and sales charges.
Both Estimated Current Return (if applicable) and Estimated Long-Term
Return are subject to fluctuation with changes in the compositions
of the Portfolio of a Series of the Trust and changes in market
value of the underlying Securities and changes in fees and expenses,
including sales charges, and therefore can be materially different
than the figures set forth in "Special Information" herein. In
addition, return figures may not be directly comparable to yield
figures used to measure other investments, and since return figures
are based on certain assumptions and variables, the actual returns
received by a Unit holder may be higher or lower. For information
on the estimated cash flows of each Series of the Trust, see "Estimated
Cash Flows to Unit Holders."
In order to acquire certain of the Securities contracted for by
the Sponsor for deposit in a Series of the Trust, it may be necessary
to pay on the settlement dates for delivery of such Securities
amounts covering accrued interest on such Securities which exceed
the amounts furnished by the Sponsor. The Trustee has agreed to
pay for any amounts necessary to cover any such excess and will
be reimbursed therefor, without interest, when funds become available
from interest payments on the particular Securities with respect
to which such payments have been made.
Record Dates for distributions of interest are the fifteenth day
of each month. The Distribution Dates for distributions of interest
are the first day of the month following that in which the related
Record Date occurs (except for the distribution which would be
made on January 1, which instead will be made on or before December 31).
How are Purchased Interest and Accrued Interest Treated?
Purchased Interest. Purchased Interest is a portion of the unpaid
interest that has accrued on the Securities from the later of
the last payment date on the Securities or the date of issuance
thereof through the First Settlement Date and is included in the
calculation of the Public Offering Price. Purchased Interest will
not be distributed
Page 7
to Unit holders until the Securities to which the Purchased Interest
relates are sold or mature. See "Summary of Essential Information"
for the amount of Purchased Interest per 1,000 Units for the Trust.
Purchased Interest is an element of the determination of the price
Unit holders will receive in connection with the sale or redemption
of Units prior to the termination of the Trust.
Accrued Interest. Accrued interest is the accumulation of unpaid
interest on a security from the last day on which interest thereon
was paid. Interest on Securities in the Trust generally is paid
semi-annually, although the Trust accrues such interest daily.
Because of this, the Trust always has an amount of interest earned
but not yet collected by the Trustee. For this reason, with respect
to sales settling subsequent to the First Settlement Date, the
Public Offering Price of Units will have added to it the proportionate
share of accrued interest to the date of settlement. Unit holders
will receive on the next distribution date of the Trust the amount,
if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid by Unit holders, the Trustee may advance
a portion of the accrued interest to the Sponsor as the Unit holder
of record as of the First Settlement Date. Consequently, the amount
of accrued interest to be added to the Public Offering Price of
Units will include only accrued interest from the First Settlement
Date to the date of settlement (other than Purchased Interest
already included therein) less any distributions from the Interest
Account subsequent to the First Settlement Date. See "Rights of
Unit Holders - How are Interest and Principal Distributed?"
Because of the varying interest payment dates of the Securities,
accrued interest at any point in time will be greater than the
amount of interest actually received by the Trust and distributed
to Unit holders. If a Unit holder sells or redeems all or a portion
of his Units, he will be entitled to receive his proportionate
share of Purchased Interest and accrued interest from the purchaser
of his Units. Since the Trustee has the use of the funds (including
Purchased Interest) held in the Interest Account for distributions
to Unit holders and since such Account is non-interest bearing
to Unit holders, the Trustee benefits thereby.
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
of the Trustee. 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. 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.
For purposes of evaluation of the Securities in a Series of the
Trust, the Evaluator will receive a fee as indicated in "Summary
of Essential Information." The Trustee pays certain expenses of
a Series of the Trust for which it is reimbursed by such Series
of the Trust. The Trustee will receive for its ordinary recurring
services to each Series of the Trust an annual fee computed at
$.96 per annum per 1,000 Units outstanding of underlying Securities.
For a discussion of the services performed by the Trustee pursuant
to its obligations under the Indentures, reference is made to
the material set forth under "Rights of Unit Holders." The Trustee's
and Evaluator's fees are payable monthly on or before each Distribution
Date from the Interest Account to the extent funds are available
and then from the Principal Account. Since the Trustee has the
use of the funds being held in the Principal and Interest Accounts
for future distributions, payment of expenses and redemptions
and since such Accounts are non-interest 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.
Page 8
The following additional charges with respect to a Series of the
Trust are or may be incurred by a Series of the Trust: all expenses
(including legal and annual auditing expenses) of the Trustee
incurred in connection with its responsibilities under the Indentures,
except in the event of negligence, bad faith or willful misconduct
on its part; the expenses and costs of any action undertaken by
the Trustee to protect a Series of 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 connections with its acceptance or administration
of a Series 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 a Series of the Trust (no such taxes
or charges are being levied or made upon termination of a Series
of the Trust). The above expenses and the Trustee's annual fee,
when paid or owing to the Trustee, are secured by a lien on each
Series of the Trust. In addition, the Trustee is empowered to
sell Securities in order to make funds available to pay all these
amounts if funds are not otherwise available in the Interest and
Principal Accounts. Due to the minimum principal amount in which
Securities may be required to be sold, the proceeds of such sales
may exceed the amount necessary for the payment of such fees and
expenses.
Unless the Sponsor determines that such an audit is not required,
the Indenture requires the accounts of a Series of the Trust shall
be audited on an annual basis at the expense of such Series by
independent auditors selected by the Sponsor. So long as the Sponsor
is making a secondary market for Units, the Sponsor shall bear
the cost of such annual audits to the extent such cost exceeds
$.50 per 1,000 Units. Unit holders of a Series of the Trust covered
by an audit may obtain a copy of the audited financial statements
from the Trustee upon request.
What is the Tax Status of Unit Holders?
In the opinion of Chapman and Cutler, 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 Trust under the Internal
Revenue Code (the "Code") and income of such Trust will be treated
as the income of the Unit holders under the Code.
2. Each Unit holder will have a taxable event when the Trust
disposes of a Security, or when the Unit holder redeems or sells
his Units. Unit holders must reduce the tax basis of their Units
for their share of accrued interest received by the Trust, if
any, on Securities delivered after the Unit holders pay for their
Units to the extent that such interest accrued on such Securities
during the period from the Unit holder's settlement date to the
date such Securities are delivered to the Trust and, consequently,
such Unit holders may have an increase in taxable gain or reduction
in capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing
the proceeds of such sale or redemption with the adjusted basis
of the Units. If the Trustee disposes of Securities (whether by
sale, payment on maturity, redemption or otherwise), gain or loss
is recognized to the Unit holder. The amount of such gain or loss
is measured by comparing the Unit holder's pro rata share of the
total proceeds from such disposition with the Unit holder's basis
for his or her fractional interest in the asset disposed of. In
the case of a Unit holder who purchases Units, such basis (before
adjustment for earned original issue discount, amortized bond
premium and accrued market discount (if the Unit holder has elected
to include such market discount in income as it accrues), if any)
is determined by apportioning the cost of the Units among each
of the Trust assets ratably according to value as of the date
of acquisition of the Units. The tax cost reduction requirements
of the Code relating to amortization of bond premium may, under
some circumstances, result in the Unit holder realizing a taxable
gain when his Units are sold or redeemed for an amount equal to
or less than his original cost.
3. The Trust contains certain "zero coupon" Securities (the "Stripped
Treasury Securities") that are treated as bonds that were originally
issued at an original issue discount provided, pursuant to a Treasury
Page 9
Regulation (the "Regulation") issued on December 28, 1992, that
the amount of original issue discount determined under Section
1286 of the Code is not less than a "de minimis" amount as determined
thereunder. Because the Stripped Treasury Securities represent
interests in "stripped" U.S. Treasury bonds, a Unit holder's initial
cost for his pro rata portion of each Stripped Treasury Security
held by the Trust (determined at the time he acquires his Units,
in the manner described above) shall be treated as its "purchase
price" by the Unit holder. Original issue discount is effectively
treated as interest for Federal income tax purposes, and the amount
of original issue discount in this case is generally the difference
between the bond's purchase price and its stated redemption price
at maturity. A Unit holder will be required to include in gross
income for each taxable year the sum of his daily portions of
original issue discount attributable to the Stripped Treasury
Securities held by the Trust as such original issue discount accrues
and will, in general, be subject to Federal income tax with respect
to the total amount of such original issue discount that accrues
for such year even though the income is not distributed to the
Unit holders during such year to the extent it is not less than
a "de minimis" amount as determined under the Regulation. In general,
original issue discount accrues daily under a constant interest
rate method which takes into account the semi-annual compounding
of accrued interest. In the case of the Stripped Treasury Securities,
this method will generally result in an increasing amount of income
to the Unit holders each year. Unit holders should consult their
tax advisers regarding the Federal income tax consequences and
accretion of original issue discount.
4. The Unit holder's aliquot share of the total proceeds received
on the disposition of, or principal paid with respect to, a Security
held by the Trust will constitute ordinary income (which will
be treated as interest income for most purposes) to the extent
it does not exceed the accrued market discount on such Security
issued after July 18, 1984 that has not previously been included
in taxable income by such Unit holder. A Unit holder may generally
elect to include market discount in income as such discount accrues.
In general, market discount is the excess, if any, of the Unit
holder's pro rata portion of the outstanding principal balance
of a Security over the Unit holder's initial tax cost for such
pro rata portion, determined at the time such Unit holder acquires
his Units. However, market discount with respect to any Security
will generally be considered zero if it amounts to less than 0.25%
of the obligation's stated redemption price at maturity times
the number of years to maturity. The market discount rules do
not apply to Stripped Treasury Securities because they are stripped
debt instruments subject to special original issue discount rules
as discussed above. If a Unit holder sells his Units, gain, if
any, will constitute ordinary income to the extent of the aggregate
of the accrued market discount on the Unit holder's pro rata portion
of each Security issued after July 18, 1984 that is held by the
Trust that has not previously been included in taxable income
by such Unit holder. In general, market discount accrues on a
ratable basis unless the Unit holder elects to accrue such discount
on a constant interest rate basis. However, a Unit holder should
consult his own tax adviser regarding the accrual of market discount.
The deduction by a Unit holder for any interest expense incurred
to purchase or carry Units will be reduced by the amount of any
accrued market discount that has not yet been included in taxable
income by such Unit holder. In general, the portion of any interest
expense which is not currently deductible would be ultimately
deductible when the accrued market discount is included in income.
5. 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
applicable series of the Trust, including fees of the Trustee
and the Evaluator but does not include amortizable bond premium
on Securities held by the Trust.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") was recently
enacted. The Tax Act raises tax rates on ordinary income while
capital gains remain subject to a 28% maximum stated rate. Because
some or all capital gains are taxed at a comparatively lower rate
under the Tax Act, the Tax Act includes a provision that recharacterizes
capital gains as ordinary income in the case of certain financial
transactions that are "conversion
Page 10
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.
A Unit holder of the Trust who is not a citizen or resident of
the United States or a United States domestic corporation (a "Foreign
Investor") will generally not be subject to U.S. Federal income
taxes, including withholding taxes on amounts distributed from
the Trust (including any original issue discount) on, or any gain
from the sale or other disposition of, his Units or the sale or
disposition of any Securities by the Trustee, provided that (i)
the interest income or gain is not effectively connected with
the conduct by the Foreign Investor of a trade or business within
the United States, (ii) with respect to any gain, the Foreign
Investor (if an individual) is not present in the United States
for 183 days or more during the taxable year, and (iii) the Foreign
Investor provides the required certification of his status and
of the matters contained in clauses (i) and (ii) above, and further
provided that the exemption from withholding for U.S. Federal
income taxes for interest on any U.S. Securities shall only apply
to the extent the Securities were issued after July 18, 1984.
Amounts otherwise distributable by the Trust to a Foreign Investor
will generally be subject to withholding taxes under Section 1441
of the Code unless the Unit holder timely provides his financial
representative or the Trustee with a statement that (i) is signed
by the Unit holder under penalties of perjury, (ii) certifies
that such Unit holder is not a United States person, or in the
case of an individual, that he is neither a citizen nor a resident
of the United States, and (iii) provides the name and address
of the Unit holder. The statement may be made, at the option of
the person otherwise required to withhold, on Form W-8 or on a
substitute form that is substantially similar to Form W-8. If
the information provided on the statement changes, the beneficial
owner must so inform the person otherwise required to withhold
within 30 days of such change.
Each Unit holder (other than a foreign investor who has properly
provided the certifications described in the preceding paragraph)
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 will be subject
to back-up withholding.
Investment in Series 2 of the Trust may be particularly well suited
for purchase by funds and accounts of individual investors that
are exempt from Federal income taxes such as Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans (see "Why are Investments in a Series of the Trust Suitable
for Retirement Plans?").
The foregoing discussions relate only to Federal income taxes
on distributions by the Trust. Foreign holders should consult
their own tax advisers with respect to the foreign and United
States Federal income tax consequences of ownership of Units.
The Sponsor believes that Unit holders who are individuals will
not be subject to any state personal income taxes on the interest
received by the Trust and distributed to them. However, Unit holders
(including individuals) may be subject to state and local taxes
on any capital gains (or market discount treated as ordinary income)
derived from the Trust and to other state and local taxes (including
corporate income or franchise taxes, personal property or intangible
taxes, and estate or inheritance taxes) on their Units or the
income derived therefrom. In addition, individual Unit holders
(and any other Unit holders which are not subject to state and
local taxes on the interest income derived from the Trust) will
probably not be entitled to a deduction for state and local tax
purposes for their share of the fees and expenses paid by the
Trust, for any amortized bond premium or for any interest on indebtedness
incurred to purchase or carry their Units. Therefore, even though
the Sponsor believes that interest income from the Trust is exempt
from state personal income taxes in all states, Unit holders should
consult their own tax advisers with respect to state and local
taxation of the purchase, ownership and disposition of Units.
It should be remembered that even if distributions are reinvested
through the Distribution Reinvestment Option they are still treated
as distributions for income tax purposes (see "How Can Distributions
to Unit Holders be Reinvested?").
Page 11
Why are Investments in a Series of the Trust Suitable for Retirement
Plans?
A Series of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing
plans are exempt from Federal income taxation. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special 10 year averaging or tax-deferred
rollover treatment. The Code substitutes 5 year averaging for
10 year averaging for qualifying lump sum plan distributions after
December 31, 1986 although certain transition rules apply to retain
10 year averaging for qualifying recipients who attained age 50
by January 1, 1986. Moreover, the Code contains provisions which
adversely affect the continued deductibility of annual contributions
to an IRA beginning in 1987. 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.
The Trust will waive the $1,000 minimum investment requirement
for tax-deferred retirement plan accounts. The minimum investment
is $250 for tax-deferred retirement plans such as IRA accounts.
Fees and charges with respect to such plans may vary.
Individual Retirement Account-IRA. The deductible amount an individual
may contribute will be reduced to the extent an individual has
adjusted gross income over $25,000 ($40,000 if married, filing
jointly or $0 if married, living apart and filing separately),
if either an individual or his spouse (if married, filing jointly)
is an active participant in an employer maintained retirement
plan. If an individual has adjusted gross income over $35,000
($50,000 if married, filing jointly or $0 if married, living apart
and filing separately) and if an individual or his spouse is an
active participant in an employer maintained retirement plan,
no IRA deduction is permitted. Under the Code, an individual may
make nondeductible contributions to the extent deductible contributions
are not allowed. The combined deductible and nondeductible limit
for an individual under the Code is the lesser of $2,000 ($2,250
in the case of a spousal IRA) or 100 percent of compensation.
Generally, Federal income tax relating to capital gains and income
received in an IRA is deferred until distributions are made. Distributions
from an IRA (other than the return of certain excess contributions)
are treated as ordinary income, except that under the Code an
individual need not pay tax on the return of nondeductible contributions.
The Code provides that if amounts are withdrawn from an IRA which
includes both deductible and nondeductible contributions, the
amount excludable from income for that taxable year is the same
proportion to the total amount withdrawn for that taxable year
that the individual's aggregate nondeductible IRA contributions
bear to the aggregate balance of all IRAs of the individual.
It should be noted that certain transactions which are prohibited
under the Code will cause all or a portion of the amount in an
IRA to be deemed to be distributed and subject to tax at that
time. A participant's entire interest in an IRA must be, or commence
to be, distributed to the participant not later than April 1 of
the calendar year following the year in which the individual attains
age 70 1/2. Excess contributions are subject to an annual 6% excise
tax. Distributions made before attainment of age 59 1/2, except
in the case of the participant's death or disability, separation
from service after attaining age 55, qualified domestic relations
orders or distributions applied to certain medical expenses or
where the amount distributed is to be rolled over to another IRA,
or if distributions are in a form of substantially equal periodic
payments over the life or life expectancy of the individual, or
over the joint lives of the individual and the individual's beneficiary,
are generally subject to a surtax in an amount equal to 10% of
the distribution.
Retirement Plans For The Self-Employed-Keogh Plans. Units of a
Series of the Trust may be purchased by retirement plans established
pursuant to the Self-Employed Individuals Tax Retirement Act of
1962 ("Keogh Plans"). Such plans are available for self-employed
individuals, partnerships or unincorporated companies. Under existing
law, qualified individuals may generally make annual tax-deductible
contributions to a defined contribution Keogh Plan of up to the
lesser of 25% of annual compensation (less the Keogh Plan contribution)
or $30,000 for taxable years beginning after December 31, 1983.
A defined benefit Keogh Plan is limited to providing benefits
each year which do not exceed the lesser of $90,000 (as adjusted
for inflation) or 100% of average compensation for the highest
three consecutive calendar years. The assets of
Page 12
the Keogh Plans must be held in a qualified trust or other arrangement
which meets the requirements of the Code. Generally, a participant's
entire interest in a Keogh Plan must be, or commence to be, distributed
to the participant not later than April 1 of the calendar year
following the year during which he attains age 70 1/2. Excess
contributions to a Keogh Plan are subject to an annual 10% excise
tax. Distributions made before attainment of age 59 1/2, except
in the case of the participant's death or disability, separation
from service after attaining age 55, qualified domestic relations
orders or distributions applied to certain medical expenses or
where the amount distributed is to be rolled over to an IRA or
another qualified plan, or if distributions are in the form of
substantially equal periodic payments over the life or life expectancy
of the individual, or over the lives of the individual and the
individual's beneficiary, are generally subject to a surtax in
an amount equal to 10% of the distribution. IRA deductions for
active Keogh Plan participants will be restricted (see above).
Corporate Pension and Profit-Sharing Plans. An employer who has
established a pension or profit sharing plan for employees may
purchase Units of a Series of the Trust for such a plan.
Excess Distributions Tax. In addition to the other taxes due by
reason of a plan distribution, a tax of 15% may apply to certain
aggregate distributions from IRAs, Keogh plans, and qualified
corporate retirement plans to the extent such aggregate taxable
distributions exceed specified amounts (generally $150,000, as
adjusted, or $112,000, as adjusted, if the recipient has made
a "grandfather election") during a tax year. This 15% tax will
not apply to distributions on account of death, qualified domestic
relations orders or amounts rolled over to an eligible plan. In
general, for qualifying lump sum distributions the excess distribution
over $750,000, as adjusted, or $562,500, as adjusted, if the recipient
has made a "grandfather election," will be subject to the 15%
tax.
See "Public Offering - How is the Public Offering Price Determined?"
for information with respect to the uncertainty during certain
periods of each month of the precise amount of principal and accrued
interest of the Securities.
Excess Accumulations Tax. On the participant's death, a 15% tax
will be imposed on aggregate balances remaining in IRAs, Keogh
Plans and corporate retirement plans to the extent those balances
exceed specified levels. If a spouse is the death beneficiary
of all balances and makes a spousal election, the imposition of
the tax may be postponed until the spouse's death unless such
spouse receives excess distributions as described above, during
her life in which case the spouse will be subject to the 15% tax
on excess distributions, as described above, as if the spouse
were the participant.
How Can Distributions to Unit Holders be Reinvested?
Universal Distribution Option. Unit holders may elect participation
in a Universal Distribution Option which permits a Unit holder
to direct the Trustee to distribute principal and interest payments
to any other investment vehicle of which the Unit holder has an
existing account. For example, at a Unit holder's direction, the
Trustee would distribute automatically on the applicable distribution
date interest income, capital gains or principal on the participant's
Units to, among other investment vehicles, a Unit holder's checking,
bank savings, money market, insurance, reinvestment or any other
account. All such distributions, of course, are subject to the
minimum investment and sales charges, if any, of the particular
investment vehicle to which distributions are directed. The Trustee
will notify the participant of each distribution pursuant to the
Universal Distribution Option. The Trustee will distribute directly
to the Unit holder any distributions which are not accepted by
the specified investment vehicle. A participant may at any time,
by so notifying the Trustee in writing, elect to terminate his
participation in the Universal Distribution Option and receive
directly future distributions on his Units.
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 determined by adding
to the Evaluator's determination of the aggregate offering price
of the Securities in the Trust, including any money in the Principal
Account other than money required to redeem tendered Units
Page 13
the amount of Purchased Interest and a sales charge of 1.95%
of the Public Offering Price (which is equivalent to 1.989% of
the net amount invested) for Series 2 of the Trust. During the
initial offering period, the Sponsor's Repurchase Price is equal
to the Evaluator's determination of the aggregate offering price
of the Securities in the Trust, including the amount of Purchased
Interest. For secondary market sales after the completion of the
initial offering period, the Public Offering Price is based on
the Evaluator's determination of the aggregate bid price of the
Securities in the Trust, including any money in the Principal
Account other than money required to redeem tendered Units, the
amount of Purchased Interest and also includes a sales charge
of 1.95% of the Public Offering Price (which is equivalent to
1.989% of the net amount invested) for Series 2 of the Trust.
Also added to the Public Offering Price is a proportionate share
of interest accrued but unpaid on the Securities after the First
Settlement Date to the date of settlement of Units (see "The First
Trust U.S. Treasury Securities Trust, Short-Intermediate, Series-How
are Purchased Interest and Accrued Interest Treated?").
The sales charge during the initial offering period is reduced
by a discount as indicated below for volume purchases:
<TABLE>
<CAPTION>
Dollar Amount Discount
of Transaction Expressed as a
at Public Percentage of
Offering Price Public Offering Price
________________ ________________
<S> <C>
$500,000 to 999,999 .10%
$1,000,000 or more .25%
</TABLE>
Any such reduced sales charge, including pursuant to a Letter
of Intent described below, shall be the responsibility of the
selling Underwriter or dealer. This reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one day from any one Underwriter or dealer. For
purposes of calculating the applicable sales charge, purchases
of Units in the Trust will not be aggregated with any other purchases
by the same person of units in any series of tax-exempt or other
unit investment trusts sponsored by Nike Securities L.P. 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 or single fiduciary account.
On the Initial Date of Deposit, the Public Offering Price per
1,000 Units with respect to each Series of the Trust is as indicated
in the "Summary of Essential Information." In addition to fluctuations
in the amount of interest accrued but unpaid on Securities in
a Series of the Trust, the Public Offering Price at any time during
the initial offering period will vary from the Public Offering
Price stated herein in accordance with fluctuations in the prices
of the underlying Securities.
The aggregate price of the Securities in a Series of the Trust
is determined by Securities Evaluation Service, Inc. acting as
evaluator (the "Evaluator") on the basis of bid prices or offering
prices as is appropriate, (1) on the basis of current market prices
for the Securities obtained from dealers or brokers who customarily
deal in Securities comparable to those held by the Trust; (2)
if such prices are not available for any of the Securities, on
the basis of current market prices for comparable securities;
(3) by determining the value of the Securities by appraisal; or
(4) by any combination of the above.
During the initial public offering period, a determination of
the aggregate price of the Securities in each Series of the Trust
is made by the Evaluator on an offering price basis, as of the
close of trading on the New York Stock Exchange on each day on
which it is open, effective for all sales made subsequent to the
last preceding determination. For secondary market purposes, the
Evaluator will be requested to make such a determination, on a
bid price basis, as of the close of trading on the New York Stock
Exchange (4:00 p.m. Eastern time) on each day on which it is open,
effective for all sales, purchases or redemptions made subsequent
to the last preceding determination.
Page 14
The Public Offering Price of the Units during the initial offering
period is equal to the offering price per 1,000 Units of the Securities
in a Series of the Trust and the amount of Purchased Interest
per 1,000 Units plus the applicable sales charge. After the completion
of the initial offering period, the secondary market Public Offering
Price will be equal to the bid price per Unit of the Securities
in a Series of the Trust and the amount of Purchased Interest
per 1,000 Units plus the applicable sales charge. The offering
price of Securities in a Series of the Trust was greater than
the bid price of such Securities on the Initial Date of Deposit
by the aggregate amount and the amount per 1,000 Units indicated
in the "Portfolio."
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. Initial transaction
statements for Units held in uncertificated form representing
Units so ordered will be issued to the registered owner of such
Units within two business days of the issuance of such Units.
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?
With respect to Series 2 of the Trust during the initial offering
period, Units issued on the Initial Date of Deposit and additional
Units issued after such date in respect of additional Securities
deposited by the Sponsor, will be distributed to the public at
the Public Offering Price. The initial offering period is 30 days
with respect to Series 2 of the Trust. Such initial offering period
may be extended by the Sponsor for up to five additional successive
30 day periods (i.e., until 180 days after the Initial Date of
Deposit). Units of a Series reacquired by the Sponsor during the
initial offering period may be resold at the then current Public
Offering Price. Upon completion of the initial offering period
with respect to all Series of the Trust, 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 1.10% of the Public Offering Price on Series 2 of
the Trust, but the Sponsor reserves the right to change the amount
of the concession to dealers and others from time to time. Certain
commercial banks are 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 second 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. Volume concessions of an additional 0.10% of the Public
Offering Price will be given to any broker/dealer or bank, who
reach cumulative firm sales for purchases made from the Sponsor
of at least $1,000,000 from the initial date of the offering through
November 21, 1994. After a firm has met the minimum $1,000,000
volume level, volume concessions will be given on all trades originated
from or by that firm, including those placed prior to reaching
the $1,000,000 level, and will continue to be given during the
entire initial offering period.
What are the Profits of the Sponsor?
The Underwriters, including the Sponsor, will receive a gross
sales commission equal to 1.95% of the Public Offering Price (equivalent
to 1.989% of the net amount invested) for Series 2 of the Trust.
The Sponsor will receive from the other Underwriters the excess
of such gross sales commission over 1.95% of the Public Offering
Price for Series 2 of the Trust. Although any reduced sales charge
shall be the responsibility of the selling Underwriter or dealer,
the Sponsor will reimburse Underwriters or dealers for discounts
made available to purchasers as described in "How is the Public
Offering Price Determined?" See "Underwriting" for information
regarding additional concessions available to Underwriters, dealers
and others. In addition, the Sponsor
Page 15
may be considered to have realized a profit or the Sponsor may
be considered to have sustained a loss, as the case may be for
each Trust, in the amount of any difference between the cost of
the Securities to each Series of the Trust and the cost of such
Securities to the Sponsor. See "Portfolio" under the heading "Profit
or (Loss) to Sponsor" for the Sponsor's profit or loss on the
Initial Date of Deposit. During the initial offering period, the
Underwriters also may realize profits or sustain losses from the
sale of Units to other Underwriters or as a result of fluctuations
after the Initial Date of Deposit in the offering prices of the
Securities and hence in the Public Offering Price received by
the Underwriters.
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 (based on the bid prices
of the Securities in a Series of the Trust) and the price at which
Units are resold (which price is also based on the bid prices
of the Securities in such Series and includes a sales charge of
1.95% for Series 2 of the Trust) or redeemed. The secondary market
public offering price of Units may be greater or less than the
cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to maintain a market for the Units
and continuously to offer to purchase Units at prices, subject
to change at any time, based upon the aggregate bid price of the
Securities in the portfolio of a Series of the Trust and the amount
of Purchased Interest plus interest accrued to the date of settlement.
To the extent that a secondary market is maintained during the
initial offering period with respect to Series 2 of the Trust,
the prices at which Units of a Series of the Trust will be repurchased
will be based upon the aggregate offering side evaluation of the
Securities in the portfolio of the Series of the Trust. The aggregate
bid prices of the underlying Securities in each Series of the
Trust, upon which the Sponsor's Repurchase Price and the Redemption
Price are based, are expected to be less than the related aggregate
offering prices (which is the evaluation method used during the
initial public offering period). 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 TNEDER FOR REDEMPTION
TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder
and will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee
will
Page 16
send to the registered owner of Units a written initial transaction
statement containing a description of a Series 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 issues 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 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 Interest and Principal Distributed?
The pro rata share of cash in the Principal Account will be computed
as of the fifteenth day of each month and distributions to the
Unit holders as of such Record Date will be made on the last day
of such month. Proceeds from the disposition of any of the Securities
or amounts representing principal on the Securities received after
such Record Date and prior to the following Distribution Date
will be held in the Principal Account and not distributed until
the next Distribution Date. The Trustee is not required to pay
interest on funds held in the Principal or Interest Account (but
may itself earn interest thereon and therefore benefits from the
use of such funds) nor to make a distribution from the Principal
Account unless the amount available for distribution shall equal
at least $1.00 per 1,000 Units.
The Trustee will credit to the Interest Account all interest received
by a Series of the Trust, including moneys representing penalties
for the failure to make timely payments on Securities or liquidated
damages for default or breach of any condition or term of the
Securities and that part of the proceeds of any disposition of
Securities which represents accrued interest. Other receipts will
be credited to the Principal Account. Persons who purchase Units
between a Record Date and a Distribution Date will receive their
first distribution on the second Distribution Date after the purchase.
As of the fifteenth day of each month, the Trustee will deduct
from the Interest Account and, to the extent funds are not sufficient
therein, from the Principal Account, amounts necessary to pay
the expenses of a Series of the Trust. The Trustee also may withdraw
from said accounts such amounts, if any, as it deems necessary
to establish a reserve for any governmental charges payable out
of a Series of the Trust. Amounts so withdrawn shall not be considered
a part of the assets of such Series of the Trust until such time
as the Trustee shall return all or any part of such amounts to
the appropriate account. In addition, the Trustee may withdraw
from the Interest Account and the Principal Account such amounts
as may be necessary to cover redemption of Units by the Trustee.
Record Dates for monthly distributions will be the fifteenth day
of each month. Distributions will be made on the last day of such
month. Distributions for an IRA, Keogh, pension fund or other
tax-deferred retirement plan will not be sent to the individual
Unit holder; these distributions will go directly to the custodian
of the plan to avoid the penalties associated with premature withdrawals
from such accounts.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of interest, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 1,000 Units. Within
a reasonable time after the end of each calendar year, the Trustee
will furnish to each person who at any time during the calendar
year was a Unit holder of record, a statement as to (1) the Interest
Account: interest received (including amounts representing interest
received upon any disposition of Securities, penalties for the
failure to make timely payments on Securities or liquidated damages
Page 17
for default or breach of any condition or term of the Securities),
deductions for payment of applicable taxes and for fees and expenses
of a Series of the Trust, redemption of Units and the balance
remaining after such distributions and deductions, expressed both
as a total dollar amount and as a dollar amount representing the
pro rata share per 1,000 Units outstanding on the last business
day of such calendar year; (2) the Principal Account: payments
of principal on Securities, the dates of disposition of any Securities
and the net proceeds received therefrom (excluding any portion
representing interest), deduction for payment of applicable taxes
and for fees and expenses of a Series of the Trust, redemptions
of Units, and the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar
amount per 1,000 Units; (3) the Securities held and the number
of Units outstanding on the last business day of such calendar
year; (4) the Redemption Price per 1,000 Units based upon the
last computation thereof made during such calendar year; (5) the
dollar amounts actually distributed during such calendar year
from the Interest Account and from the Principal Account, separately
stated; and (6) such other information as the Trustee may deem
appropriate. Unit holders of Units in uncertificated form shall
receive no less frequently than once each year a dated written
statement containing the name, address and taxpayer identification
number, if any, of the registered owner, the number of Units registered
in the name of the registered owner on the date of the statement
and certain other information, that will be provided as required
under applicable law.
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 furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or, in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive in cash an amount
for each Unit equal to the Redemption Price per Unit next computed
after receipt by 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 the
close of trading on the New York Stock Exchange (4:00 p.m. Eastern
time), the date of tender is the next day on which such 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 canceled.
Purchased Interest and any other accrued interest to the settlement
date paid on redemption shall be withdrawn from the Interest Account
or, if the balance therein is insufficient, from the Principal
Account. All other amounts paid on redemption shall be withdrawn
from the Principal Account.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Securities in a Series of the Trust and the amount
of Purchased Interest, while the Public Offering Price of Units
during the initial offering period will be determined on the basis
of the offering price of the Securities and the amount of Purchased
Interest, as of the close of trading on the New York Stock Exchange
(4:00 p.m. Eastern time) on the date any such determination is
made. At the opening of business on the Initial Date of Deposit
the Public Offering Price per Unit (which is based on the offering
prices of the Securities in the Trust and includes the sales charge)
exceeded the Unit value at which Units could have been redeemed
(based upon the current bid prices of the Securities in each Series
of the Trust) by the amount per 1,000 Units set forth in the "Summary
of Essential Information." The Redemption Price per 1,000 Units
is the pro rata share of each Unit determined by the Trustee on
the basis of (1) the cash on hand in the Trust or moneys in the
process of being collected, (2) the value of the Securities in
a Series of the Trust based on the bid prices of the Securities
and (3) Purchased Interest and any other interest accrued thereon,
less (a) amounts representing taxes or other governmental charges
payable out of
Page 18
a Series of the Trust and (b) the accrued expenses of a Series
of the Trust. The Evaluator may determine the value of the Securities
in a Series of the Trust (1) on the basis of current bid prices
of the Securities obtained from dealers or brokers who customarily
deal in securities comparable to those held by a Series of the
Trust, (2) on the basis of bid prices for securities comparable
to any securities for which bid prices are not available, (3)
by determining the value of the Securities by appraisal, or (4)
by any combination of the above.
The difference between the bid and offering prices of such Securities
may be expected to average 1/16 to 1/8 of 1% of the principal
amount of such Securities. Therefore, the price at which Units
may be redeemed could be less than the price paid by the Unit
holder. At the opening of business on the Initial Date of Deposit
the aggregate current offering price of such Securities exceeded
the Redemption Price (based upon current bid prices of such Securities)
by the aggregate amount and the amount per 1,000 Units indicated
in the "Portfolio."
The Trustee is empowered to sell underlying Securities in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might
otherwise be realized.
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 that Exchange is restricted or an 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.
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, which includes
Purchased Interest, it may purchase such Units by notifying the
Trustee before the close of business on the second succeeding
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.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
currently effective prospectus describing such Units. Any profit
or loss resulting from the resale or redemption of such Units
will belong to the Sponsor.
How May Securities be Removed from the Trust?
The Sponsor is empowered, but not obligated, to direct the Trustee
to dispose of Securities in the event certain events occur that
adversely affect the value of Securities including default in
payment of interest or principal, default in payment of interest
or principal of other obligations guaranteed or backed by the
full faith and credit of the United States of America, institution
of legal proceedings, default under other documents adversely
affecting debt service, decline in price or the occurrence of
other market or credit factors.
If any default in the payment of principal or interest on any
Security occurs and if the Sponsor fails to instruct the Trustee
to sell or to hold such Security within thirty days after notification
by the Trustee to the Sponsor of such default, the Trustee may,
in its discretion, sell the defaulted Security and not be liable
for any depreciation or loss thereby incurred.
The Trustee is also empowered to sell, for the purpose of redeeming
Units tendered by any Unit holder, and for the payment of expenses
for which funds may not be available, such of the Securities in
a list furnished by the Sponsor as the Trustee in its sole discretion
may deem necessary. Except as stated under "What is the First
Trust U.S. Treasury Securities Trust, Short-Intermediate, Series?",
the acquisition by the Trust of any securities other than the
Securities initially deposited is prohibited.
Page 19
INFORMATION as to SPONSOR, TRUSTEE and EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds, The First Trust GNMA, Templeton Growth and Treasury
Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and The Advantage Growth and Treasury Securities Trust. First
Trust introduced the first insured unit investment trust in 1974
and to date more than $7 billion in First Trust unit investments
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 Fund may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Securities. For information relating to
the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of 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 Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action
in good faith pursuant to the Indenture, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the case of the
Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities.
In the event of the failure of the Sponsor
Page 20
to act under the Indenture, the Trustee may act thereunder and
shall not be liable for any action taken by it in good faith under
the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of a Series 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 become incapable of acting or become bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187. The Evaluator
may resign or may be removed by the Sponsor and the Trustee, in
which event the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such 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),
provided that the Indenture is not amended to increase the number
of Units issuable thereunder or to permit the deposit or acquisition
of securities either in addition to or in substitution for any
of the Securities initially deposited in a Series of the Trust,
except for the substitution of Replacement Securities for Failed
Securities or the purchase of additional Securities pursuant to
the Indenture. In the event of any amendment, the Trustee is obligated
to notify promptly all Unit holders of the substance of such amendment.
A Series of the Trust may be liquidated at any time by consent
of 100% of the Unit holders or by the Trustee when the principal
amount of the Securities owned by such Series as shown by any
evaluation, is less than the lower of $1,000,000 or 10% of the
total principal amount of the Securities initially deposited in
such Series, or in the event that Units not yet sold aggregating
more than 60% of the Units initially deposited are tendered for
redemption by the Underwriters, including the Sponsor. If a Series
of the Trust is liquidated because of the redemption of unsold
Units by the Underwriters, the Sponsor will refund to each purchaser
of Units the entire sales charge paid by such purchaser. The Indenture
will terminate upon the redemption, sale or other disposition
of the last Security held thereunder, but in no event shall it
continue beyond December 31, 1999. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit
holders. Within a reasonable period after termination, the Trustee
will sell any Securities remaining in a Series of the Trust, and,
after paying all expenses and charges incurred by a Series of
the Trust, will distribute to each Unit holder
Page 21
(including the Sponsor if it then holds any Units), upon surrender
for cancellation of his Units, his pro rata share of the balances
remaining in the Interest and Principal Accounts, all as provided
in the Indenture.
Legal Opinions
The legality of the Units offered hereby will be passed upon by
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, as counsel for the Sponsor. Carter, Ledyard & Milburn,
2 Wall Street, New York, New York 10005, will act as counsel for
the Trustee.
Experts
The statement of net assets, including the portfolio, 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.
UNDERWRITING
On the Initial Date of Deposit, the Underwriters of the Trust
became the owners of the Units of the Trust and entitled to the
benefits thereof, as well as the risks inherent therein.
<TABLE>
<CAPTION>
Name Address Units
________ ________ ________
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532 1,349,000
Underwriters*
Edward D. Jones & Co. 12555 Manchester Road, St. Louis, MO 63131 500,000
Fidelity Capital Markets, 161 Devonshire Street D5, Boston, MA 02110 100,000
A division of National
Financial Services Corporation ---------
1,949,000
==========
</TABLE>
[FN]
* Each Underwriter has indicated an intention to purchase a
total of 1,000,000 Units from the Sponsor either on the Initial
Date of Deposit or during the initial offering period.
On the Initial Date of Deposit, the Underwriters of the Trust
became the owners of the Units of such Trust and entitled to the
benefits thereof, as well as the risks inherent therein.
The Agreement Among Underwriters provides that a public offering
of the Units will be made at the Public Offering Price described
in the Prospectus. Units may also be sold to dealers and others
at prices representing a concession or agency commission of 1.10%
of the Public Offering Price per Unit for primary and secondary
market sales for Series 2 of the Trust. See "Public Offering -
How is the Public Offering Price Determined?" for additional dealer
concessions for volume purchases. However, resales of Units 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 Underwriters have agreed to underwrite additional Units
of Series 2 of the Trust as they become available. In addition
to the concessions described in "Public Offering-What are the
Profits of the Sponsor?", Underwriters may be eligible for additional
concessions as set forth in the following table:
<TABLE>
<CAPTION>
Dollar Amount Underwriting Concession
of Units as a Percentage of the
Underwritten Public Offering Price
________________ ________________
<S> <C>
$1,000,000 or more 1.20%
</TABLE>
Total underwriting concession is based on the number of Units
an Underwriter has indicated its intention to purchase on the
Initial Date of Deposit.
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
Page 22
a minimum number of UIT Units (for this purpose, 1,000 Units of
the First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2 equals one UIT Unit) 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.
A comparison of estimated current returns and estimated long-term
returns with the returns on various investments is one element
to consider in making an investment decision. 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
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. Bank CDs and money market accounts, for example,
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 23
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2
Special Information
<TABLE>
<CAPTION>
<S> <C>
Calculation of Estimated Net Annual Unit Income Monthly
Estimated Annual Interest Income per 1,000 Units
(excluding accretion on the Zero Coupon Securities) $ 42.91
Less: Estimated Annual Expense per 1,000 Units $ 1.71
Estimated Net Annual Interest Income per 1,000 Units $ 41.20
Calculation of Interest Distribution per 1,000 Units
Estimated Net Annual Interest Income per 1,000 Units $ 41.20
Divided by 12 $ 3.43
Estimated Daily Rate of Net Interest Accrual per 1,000 Units $ .11443
Estimated Current Return Based on Public Offering Price (1) 4.12%
Estimated Long-Term Return Based on Public Offering Price (1) 4.35%
CUSIP 33734W 293
</TABLE>
Trustee's Annual Fee $.96 per 1,000 Units outstanding annually,
exclusive of expenses of the Trust,
commencing October 21, 1993.
Distributions
Estimated first distribution of $1.95 per 1,000 Units will be
paid on November 30, 1993 to Unit holders of record on November
15, 1993 (The First General Record Date).
Subsequent distributions will be paid on the last day of each
month to holders of record of Units on the fifteenth day of such
month.
No distributions need be made from the Principal Account if the
balance therein is less than $1.00 per 1,000 Units.
[FN]
_____________
(1) The Estimated Current Return is computed by multiplying the
Estimated Net Annual Interest Income per 1,000 Units by $1,000
and
dividing the result by the Public Offering Price per 1,000 Units.
The Estimated Net Annual Interest Income per Unit will vary with
changes in fees and expenses of the Trustee, Sponsor and Evaluator
and with the principal prepayment, redemption, maturity, exchange
or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current
Return indicated above will be realized in the future. The Estimated
Long-Term Return is calculated using a formula which (1) takes
into consideration, and determines and factors in the relative
weightings of, the market values, yields, (which takes into account
the amortization of premiums and the accretion of discounts) and
maturity of all of the Securities in the Trust and (2) takes into
account the expenses and sales charge associated with each Unit
of such Series. Since the market values and the expenses of the
Trust will change, there is no assurance that the present Estimated
Long-Term Return as indicated above will be realized in the future.
The Estimated Current Return and Estimated Long-Term Return are
expected to differ because the calculation of the Estimated Long-Term
Return reflects the date and estimated amount of principal returned
while the Estimated Current Return calculation includes only the
Net Annual Interest Income and Public Offering Price. Neither
rate reflects the true return to Unit holders which is lower because
neither includes the effect of certain delays in distributions
to Unit holders. These figures are based on per 1,000 Unit cash
flows. Cash flows will vary with changes in fees and expenses,
with the principal prepayment, redemption, maturity, exchange
or sale of the underlying Securities. For the Estimated Cash Flows
for this Series, see "Estimated Cash Flows to Unit Holders."
Page 24
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2 Trust Summary
The First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2 consists of six obligations. Five of the Securities represent
approximately 15% of the aggregate principal amount of the Securities
in the Trust. One of the Securities is a zero coupon Security
which represents approximately 23% of the aggregate principal
amount of the Securities in the Trust. See "What is the First
Trust Special Situations Trust?"
Page 25
Portfolio
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2
The First Trust Special Situations Trust, Series 81
At the Opening of Business on the Initial Date of Deposit
October 21, 1993
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities Rate Maturity Sponsor (1) to Trust (2) to Sponsor
________________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
$ 300,000 4.625% 2/15/1996 $ 304,593 $ 304,986 $ 393
300,000 6.250% 1/31/1997 318,468 318,429 (39)
300,000 5.125% 2/28/1998 307,266 307,299 33
300,000 6.375% 1/15/1999 323,109 322,974 (135)
* 450,000 0.000% 2/15/2000 330,305 331,830 1,525
300,000 5.500% 4/15/2000 311,532 311,547 15
________________ ____________ ____________ __________
$ 1,950,000 $ 1,895,273 $ 1,897,065 $ 1,792
================ ============ ============ ==========
</TABLE>
[FN]
(1) All Securities on the Initial Date of Deposit are represented
by the Sponsor's contracts to purchase such Securities. Such contracts
were acquired by the Sponsor on October 20, 1993. Interest will
begin accruing to the benefit of Unit holders from October 28,
1993, the First Settlement Date of the Trust.
(2) The cost of the Securities to the Trust represents the offering
side evaluation of the Securities as determined by Securities
Evaluation Service, Inc. The offering side evaluation is greater
than the current bid side evaluation of the Securities which is
the basis on which Redemption Price per Unit is determined. The
aggregate value based on the bid side evaluation at the opening
of business on the Initial Date of Deposit was $1,890,196, which
is $6,869 ($3.52 per 1,000 Units; .352% of the aggregate principal
amount) lower than the aggregate cost of the Securities to the
Trust based on the offering side evaluation.
* This Treasury Security is being purchased at a discount from
its par value because there is no stated interest income thereon
(such securities are often referred to as zero coupon U.S. Treasury
Securities). Over the life of a zero coupon U.S. Treasury Security
the value increases, so that upon maturity the holders will receive
100% of the principal amount thereof.
Page 26
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2
We have audited the accompanying statement of net assets, including
the portfolio, of the First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2, comprising The First Trust Special
Situations Trust, Series 81, as of the opening of business on
October 21, 1993. 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 at the opening of business on October 21, 1993. 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 the First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2, comprising the First Trust Special Situations Trust,
Series 81, at the opening of business on October 21, 1993 in conformity
with generally accepted accounting principles.
ERNST & YOUNG
Chicago, Illinois
October 21, 1993
Page 27
Statement of Net Assets
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2
The First Trust Special Situations Trust, Series 81
At the Opening of Business on the Initial Date of Deposit
October 21, 1993
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Delivery statements relating to Sponsor's contracts to purchase
Securities (1)(2) $ 1,897,065
Accrued interest on underlying Securities (2)(4) 14,235
-----------------
1,911,300
Less liabilities (4) 14,235
-----------------
Net assets $ 1,897,065
=================
Outstanding Units of fractional undivided interest 1,949,000
ANALYSIS OF NET ASSETS
Cost to investors (3) $ 1,949,009
Less Purchased Interest (5) 13,938
Less gross underwriting commissions (3) 38,006
-----------------
Net assets $ 1,897,065
=================
</TABLE>
NOTES TO STATEMENT OF NET ASSETS
[FN]
(1) The aggregate offering price of the Securities of the Trust
listed under "Portfolio" on the Initial Date of Deposit herein
and their cost to the Trust are the same. The offering price shown
above has been determined by Securities Evaluation Service, Inc.,
certain shareholders of which are officers of the Sponsor.
(2) Pursuant to delivery statements relating to contracts to purchase
Securities, an irrevocable letter of credit held by the Trustee
has been deposited in the Trust as collateral. The amount of
available letter of credit and the amount expected to be utilized
for the Trust is shown below. The amount expected to be utilized
is (a) the cost to the Trust of the principal amount of the Securities
to be purchased, (b) accrued interest on those Securities to the
Initial Date of Deposit and (c) accrued interest on those Securities
from the Initial Date of Deposit to the expected dates of delivery
of the Securities.
<TABLE>
<CAPTION>
Accrued Accrued
Aggregate Interest to Interest to
Letter of Credit Offering Initial Expected
To be Price of Date of Dates of
Series Available Utilized Securities Deposit Delivery
________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
First Trust U.S. Treasury
Securities Trust, Short-
Intermediate, Series 2 $ 2,800,000 $ 1,911,300 $ 1,897,065 $ 14,235 $ -
</TABLE>
(3) The aggregate cost to investors (including Purchased Interest)
and the aggregate gross underwriting commissions of 1.95% for
the Trust are computed assuming no reduction of sales charge for
quantity purchases.
(4) Accrued interest on the underlying Securities represents the
interest accrued as of the Initial Date of Deposit from the later
of the last payment date on the Securities or the date of issuance
thereof. Such amount applicable to the Trust is a liability of
the Trust because the Trust is only entitled to earn interest
income
Page 28
beginning on the Initial Date of Deposit. In addition, the Trustee
may advance to the Trust a portion of the accrued interest on
the underlying Securities and a portion of the amount of interest
which the Trust will earn from the Initial Date of Deposit to
October 28, 1993 the First Settlement Date, for distribution to
the Sponsor as the Unit holder of record.
(5) Purchased Interest is a portion of the accrued interest on
the underlying Securities as of the Initial Date of Deposit, plus
a portion of the interest that the Trust will earn from the Initial
Date of Deposit through the First Settlement Date. Purchased Interest
is included in the Public Offering Price.
DESCRIPTION of STANDARD & POOR'S CORPORATION RATING*
A Standard & Poor's Corporation's rating on the units of an investment
trust (hereinafter referred to collectively as "units" and "trust")
is a current assessment of creditworthiness with respect to the
investments held by such trust. This assessment takes into consideration
the financial capacity of the issuers and of any guarantors, insurers,
lessees or mortgagors with respect to such investments. The assessment,
however, does not take into account the extent to which trust
expenses or portfolio asset sales for less than the trust's purchase
price will reduce payment to the Unit holder of the interest and
principal required to be paid on the portfolio assets. In addition,
the rating is not a recommendation to purchase, sell, or hold
units, inasmuch as the rating does not comment as to market price
of the units or suitability for a particular investor.
Trusts rated "AAA" are composed exclusively of assets that are
rated "AAA" by Standard & Poor's or, have, in the opinion of Standard
& Poor's, credit characteristics comparable to assets rated "AAA,"
or certain short-term investments. Standard & Poor's defines its
"AAA" rating for such assets as the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is very strong.
* As described by Standard & Poor's Corporation.
Page 29
Estimated Cash Flows to Unit Holders
The tables below set forth the per Unit estimated monthly distributions
of interest and distributions of principal to Unit holders. The
tables assume no changes in the current interest rates, no exchanges,
redemptions, or sales of the underlying securities prior to their
maturity or expected retirement date. To the extent the foregoing
assumptions change, actual distributions will vary.
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2
Monthly
Estimated Estimated Estimated
Interest Principal Total
Date (Each Month) Distribution Distribution Distribution
________________ __________ __________ __________
<S> <C> <C> <C>
November 1993 1.95 1.95
December 1993-February 1996 3.43 3.43
March 1996 3.43 153.93 157.36
April 1996-January 1997 2.85 2.85
February 1997 2.85 153.93 156.78
March 1997-February 1998 2.06 2.06
March 1998 2.06 153.93 155.99
April 1998-January 1999 1.42 1.42
February 1999 1.42 153.93 155.35
March 1999-February 2000 0.61 0.61
March 2000 0.61 230.89 231.50
April 2000 0.63 0.63
May 2000 7.78 153.93 161.71
</TABLE>
Page 30
This page is intentionally left blank.
Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2
The First Trust Special Situations Trust, Series 81:
What is the First Trust Special Situations Trust? 4
What is the Rating of the Units? 6
What are Estimated Current Return and Estimated
Long-Term Return? 7
How are Purchased Interest and
Accrued Interest Treated? 7
What are the Expenses and Charges? 8
What is the Tax Status of Unit Holders? 9
Why are Investments in a Series of the Trust
Suitable for Retirement Plans? 12
How Can Distributions to Unit Holders be
Reinvested? 13
Public Offering:
How is the Public Offering Price Determined? 13
How are Units Distributed? 15
What are the Profits of the Sponsor? 15
Will There be a Secondary Market? 16
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 16
How are Interest and Principal Distributed? 17
What Reports Will Unit Holders Receive? 17
How May Units be Redeemed? 18
How May Units be Purchased by the Sponsor? 19
How May Securities be Removed from the Trust? 19
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 20
Who is the Trustee? 20
Limitations on Liabilities of Sponsor and Trustee 20
Who is the Evaluator? 21
Other Information:
How May the Indenture be Amended or
Terminated? 21
Legal Opinions 22
Experts 22
Underwriting 22
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 2 24
Portfolio 26
Report of Independent Auditors 27
Statement of Net Assets 28
Description of Bond Ratings 29
Estimated Cash Flows to Unit Holders 30
__________
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE FUND HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST
First Trust
U.S. Treasury Securities Trust,
Short-Intermediate,
Series 2
First Trust
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
October 21, 1993
Page 32
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 94
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 91, which is the
current fund, and The First Trust Special Situations Trust,
Series 94, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds comprising
the Fund, the evaluation, record and distribution dates and other
changes pertaining specifically to the new series, such as size
and number of Units in the Fund and the statement of condition of
the new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 91 Prospectus relate to the series number and size and the
date and various items of information which will be derived from
and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
94 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Village of Lisle and State of Illinois on April 20, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 94
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this 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 April 20, 1994
Corporation, the
General Partner of
Nike Securities L.P. Carlos E. Nardo
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Special
Situations Trust, Series 18 (File No. 33-42683) and the same
is hereby incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG
The consent of Ernst & Young to the use of its name and to
the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF 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 is filed as Exhibit 4.1 to the Registration Statement
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 24 and
subsequent Series effective January 23, 1992 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and Nike Financial Advisory
Services L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
45093] filed on behalf of The First Trust Special
Situations Trust, Series 24).
1.1.1* Form of Trust Agreement for Series 94 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 Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-4
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).
___________________________________
* To be filed by amendment.
S-5
