File No. 033-54199
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
FIRST INVESTORS SPECIAL SITUATIONS GROWTH AND TREASURY SECURITIES
TRUST, SERIES 1
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : September 30, 1996
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
Pursuant to Rule 24f-2 under the Investment Company Act of
1940, the issuer has registered an indefinite amount of
securities. A 24f-2 Notice for the offering was last filed on
July 14, 1995.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
1,135,000 UNITS
PROSPECTUS
Part One
Dated September 24, 1996
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
The Trust
First Investors Special Situations Growth & Treasury Securities Trust, Series
1 (the "Trust") is a unit investment trust consisting of a portfolio of "zero
coupon" U.S. Treasury bonds and shares of "First Investors Special Situations
Series ("Special Situations" or "Series"), a separate designated series of
First Investors Series Fund (the "Fund"). The fund is an open-end diversified
management investment company, commonly known as a mutual fund. At August 16,
1996, each Unit represented a 1/1,135,000 undivided interest in the principal
and net income of the Trust (see "The Trust" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust divided by the number of Units
outstanding, plus a sales charge of 6.0% of the Public Offering Price (6.383%
of the net amount invested) excluding income and principal cash. At August
16, 1996, the Public Offering Price per Unit was $11.8978 (see "Public
Offering" in Part Two). The minimum purchase is 200 Units.
Please retain both parts of this Prospectus for future reference.
_____________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_____________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
SUMMARY OF ESSENTIAL INFORMATION AS OF AUGUST 16, 1996
Sponsor: Nike Securities L.P.
Evaluator: First Trust Advisors L.P.
Trustee: The Bank of New York
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Aggregate Maturity Value of Treasury Obligations
in the Trust $11,350,000
Aggregate Number of Shares of Special Situations in
the Trust 322,340
Number of Units 1,135,000
Fractional Undivided Interest in the Trust per Unit 1/1,135,000
Public Offering Price:
Aggregate Value of Securities in the Portfolio $12,704,631
Aggregate Value of Securities per Unit $11.1935
Income and Principal cash (overdraft) in the Portfolio $(11,531)
Income and Principal cash (overdraft) per Unit $(.0102)
Sales Charge 6.383% (6.0% of Public Offering Price,
excluding income and principal cash) $.7145
Public Offering Price per Unit $11.8978
Redemption Price and Sponsor's Repurchase Price per
Unit ($.7145 less than the Public Offering Price per
Unit) $11.1833
</TABLE>
Date Trust Established June 27, 1994
Mandatory Termination Date August 15, 2005
Evaluator's Annual Fee: $.0020 per $10.00 principal amount of Treasury
Obligations outstanding. Evaluations for purposes of sale, purchase or rede
mption of Units are made as of the close of trading (4:00 p.m. Eastern time) o
n the New York Stock Exchange on each day on which it is open.
Supervisory fee payable to an affiliate Maximum of $.0015 per
of the Sponsor Unit outstanding annually
Trustee's Annual Fee: $.0085 per Unit outstanding.
Record Date: As soon as practicable after Special Situations'
ex-dividend date.
Distribution Date: As soon as practicable after Special Situations'
distribution date.
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of First Investors
Special Situations Growth & Treasury
Securities Trust, Series 1
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of First Investors Special Situations Growth &
Treasury Securities Trust, Series 1 as of May 31, 1996, and the related
statements of operations and changes in net assets for the year then ended and
for the period from the Initial Date of Deposit, June 27, 1994, to May 31,
1995. These financial statements are the responsibility of the Trust's
Sponsor. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of May 31, 1996, by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Investors Special
Situations Growth & Treasury Securities Trust, Series 1 at May 31, 1996, and
the results of its operations and changes in its net assets for the year then
ended and for the period from the Initial Date of Deposit, June 27, 1994, to
May 31, 1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
August 30, 1996
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost, including accretion
on the treasury obligations, $11,313,358) (Note 1) $13,213,759
Cash 1,424
___________
13,215,183
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Accrued liabilities 5,675
__________
Net assets, applicable to 1,135,000 outstanding
units of fractional undivided interest:
Cost of Trust assets, including accretion on
the treasury obligations (Note 1) $11,313,358
Net unrealized appreciation (Note 2) 1,900,401
Distributable funds (deficit) (4,251)
__________
$13,209,508
===========
Net asset value per unit $11.6383
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
PORTFOLIO - See accompanying notes to financial statements.
May 31, 1996
<TABLE>
<CAPTION>
Maturity Market
value Name of Issuer and Title of Security value
<C> <S> <C>
"Zero Coupon" U.S. Treasury Bonds
$11,350,000(1) maturing on August 15, 2005 $6,032,024
===========
</TABLE>
<TABLE>
<CAPTION>
Number
of
Shares
<C> <S> <C>
322,340 First Investors Series Fund, Special
Situations Series 7,181,735
___________
Total investments $13,213,759
===========
</TABLE>
(1) The treasury obligations have been purchased at a discount from their
par value because there is no stated interest income thereon (such
securities are often referred to as U.S. Treasury zero coupon bonds).
Over the life of the treasury obligations the value increases, so that
upon maturity the holders will receive 100% of the principal amount
thereof.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from the
Initial Date
of Deposit,
Year ended June 27, 1994,
May 31, 1996 to May 31, 1995
<S> <C> <C>
Interest income $514,115 $361,318
Dividends:
Capital gain 260,065 293,651
Ordinary income - -
__________________________
Total investment income 774,180 654,969
Expenses:
Trustee's fees and related expenses (15,895) (10,208)
Evaluator's fees (2,270) (1,880)
Supervisory fees (1,702) (1,404)
__________________________
Total expenses (19,867) (13,492)
__________________________
Investment income - net 754,313 641,477
Net gain (loss) on investments:
Net realized gain (loss) - -
Change in net unrealized appreciation
or depreciation 1,083,625 816,776
__________________________
1,083,625 816,776
__________________________
Net increase in net assets
resulting from operations $1,837,938 1,458,253
==========================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from the
Initial Date
of Deposit,
Year ended June 27, 1994,
May 31, 1996 to May 31, 1995
<S> <C> <C>
Net increase (decrease) in net assets
resulting from operations:
Investment income - net $754,313 641,477
Net realized gain (loss) on investments - -
Change in net unrealized appreciation or
(depreciation) on investments 1,083,625 816,776
_________________________
1,837,938 1,458,253
Units issued (1,125,000 in 1995) - 10,348,058
Distributions to unit holders:
Investment income - net (237,930) (286,678)
Principal from investment transactions - -
_________________________
(237,930) (286,678)
_________________________
Total increase (decrease) in net assets 1,600,008 11,519,633
Net assets:
At the beginning of the period (representing
1,135,000 units and 10,000 units outstanding
at May 31, 1995 and June 27, 1994,
respectively) 11,609,500 89,867
_________________________
At the end of the period (including
distributable funds (deficit) applicable
to Trust units of $(4,251) and $(6,519) at
May 31, 1996 and 1995, respectively $13,209,508 11,609,500
=========================
Trust units outstanding at the end of
the period 1,135,000 1,135,000
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
The treasury obligations are stated at values as determined by First Trust
Advisors L.P., an affiliate of the Sponsor. The values are based on (1)
current bid prices for the securities obtained from dealers or brokers who
customarily deal in securities comparable to those held by the Trust, (2)
current bid prices for comparable securities, (3) appraisal or (4) any
combination of the above.
Shares of First Investors Special Situations Series Fund (Special Situations)
are stated at Special Situations' published net asset value as reported by the
Evaluator. Net asset value is determined by dividing the value of Special
Situations' securities plus any cash and other assets (including accrued
interest and dividends receivable) less all liabilities (including accrued
expenses) by the number of shares outstanding, adjusted to the nearest whole
cent.
Investment income -
Dividends from the Special Situations shares are recorded on Special
Situations' ex-dividend date. Interest income consists of amortization of
original issue discount and market discount or premium on the treasury
obligations. Such amortization is included in the cost of treasury
obligations rather than in distributable funds because it is not currently
available for distribution to unit holders.
Security cost -
Cost of the Trust's treasury obligations is based on the offering price of the
treasury obligations on the dates the treasury obligations were deposited in
the Trust, plus amortization of original issue discount and amortization of
market discount or premium. Cost of the Special Situations shares is based on
the net asset value of such securities on the dates the securities were
deposited in the Trust. The cost of securities sold is determined using the
average cost method. Sales of securities are recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trust pays a fee for Trustee services to The Bank of New York, which is
based on $.0085 per annum per unit outstanding based on the largest aggregate
number of units outstanding during the calendar year. The Evaluator will
receive an annual fee based on $.002 per $10 principal amount of treasury
obligations outstanding. Additionally, the Trust pays recurring financial
reporting costs and an annual supervisory fee payable to an affiliate of the
Sponsor.
<PAGE>
2. Unrealized appreciation and depreciation
An analysis of net unrealized appreciation at May 31, 1996 follows:
<TABLE>
<CAPTION>
Special
Treasury Situation
obligations shares Total
<S> <C> <C> <C>
Unrealized appreciation $182,911 1,717,490 1,900,401
Unrealized depreciation - - -
____________________________________
$182,911 1,717,490 1,900,401
====================================
</TABLE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
offering price of the treasury obligations and the aggregate underlying value
of the equity securities on the date of an investor's purchase, plus a sales
charge of 6.0% of the public offering price which is equivalent to
approximately 6.383% of the net amount invested.
Distributions to unit holders -
Distributions to unit holders are made as soon as practicable after Special
Situations' distribution date. During the year ended May 31, 1996 and period
from the Initial Date of Deposit, June 27, 1994 to May 31, 1995, the Trust
made distributions totaling $.2096 per unit and $.2526 per unit, respectively,
as described below.
<PAGE>
Selected data per unit of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from the
Initial Date
of Deposit,
Year ended June 27, 1994,
May 31, 1996 to May 31, 1995
<S> <C> <C>
Investment income - interest and dividends $.6821 .6476
Expenses (.0175) (.0133)
_________________________
Investment income - net .6646 .6343
Distributions to unit holders:
Investment income - net (.2096) (.2526)
Principal from investment transactions - -
Net gain (loss) on investments .9547 .8602
_________________________
Total increase (decrease) in net assets 1.4097 1.2419
Net assets:
Beginning of the period 10.2286 8.9867
_________________________
End of the period $11.6383 10.2286
=========================
</TABLE>
Investment income - interest and dividends, Expenses and Investment income -
net per unit have been calculated based on the weighted average number of
units outstanding during each period (1,135,000 units and 1,011,331 units in
1996 and 1995, respectively). Distributions to unit holders of Investment
income - net per unit reflects the Trust's actual distributions of
approximately $.2096 per unit to 1,135,000 units on January 15, 1996 and
approximately $.2526 per unit to 1,135,000 units on February 1, 1995. The Net
gain (loss) on investments per unit during the period ended May 31, 1995
includes the effects of changes arising from issuance of 1,125,000 additional
units during the period at net asset values which differed from the net asset
value per unit of the original 10,000 units ($8.9867 per unit) on June 27,
1994.
<PAGE>
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST, SERIES 1
PART ONE
Must be Accompanied by Part Two
___________________
P R O S P E C T U S
___________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Bank of New York
101 Barclay Street
New York, New York 10005
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Tanner Propp & Farber
TO TRUSTEE: 99 Park Avenue
New York, New York 10016
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST
PROSPECTUS
Part Two NOTE: THIS PART TWO PROSPECTUS MAY
Dated September 27, 1996 ONLY BE USED WITH PART ONE
The Trust. First Investors Special Situations Growth & Treasury
Securities Trust (the "Trust") is a unit investment trust consisting of
a portfolio of zero coupon U.S. Treasury bonds and shares of First
Investors Special Situations Series ("Special Situations" or "Series"),
a separate designated series of First Investors Series Fund (the
"Fund"). The Fund is an open-end diversified management investment
company, commonly known as a mutual fund.
The objective of the Trust is to protect Unit holders' capital by
investing a portion of the Trust's portfolio in zero coupon U.S.
Treasury bonds ("Treasury Obligations") and to provide for potential
capital appreciation by investing a portion of the Trust's portfolio in
shares of Special Situations. Collectively the Treasury Obligations and
the Special Situations shares are referred to herein as the
"Securities." Special Situations' investment objective is to seek long-
term growth of capital. Special Situations invests principally in common
stocks of companies with small to medium market capitalization which the
Series' investment adviser, First Investors Management Company, Inc.
("FIMCO" or "Adviser"), considers to be undervalued or less well known
in the current marketplace and to have potential for capital growth. The
majority of such common stocks are listed on the domestic securities
exchanges or are traded in the over-the-counter market. Special
Situations may also invest in other common stocks, preferred stocks,
convertible securities issued by such companies and common stock of
companies located outside the United States. See "What is Special
Situations' Investment Objectives and Policies?" and "Description of
Certain Securities, Other Investment Policies and Risk Factors." The
Treasury Obligations evidence the right to receive a fixed payment at a
future date from the U.S. Government and are backed by the full faith
and credit of the U.S. Government. The guarantee of the U.S. Government
does not apply to the market value of the Treasury Obligations or the
Units of the Trust, whose net asset value will fluctuate and, prior to
maturity, may be worth more or less than a purchaser's acquisition cost.
This Trust is intended to achieve its objective over the life of the
Trust and as such is best suited for those investors capable of holding
Units to maturity. There is, of course, no guarantee that the objective
of the Trust will be achieved. See "Portfolio" in Part One.
The Trust has a mandatory termination date ("Mandatory Termination Date"
or "Trust Ending Date") as set forth under "Summary of Essential
Information" in Part One.
Each Unit of the Trust represents an undivided fractional interest in
all the Securities deposited in the Trust. The Trust has been organized
so that purchasers of Units should receive, at the termination of the
Trust, an amount per Unit at least equal to $10.00 (which is equal to
the per Unit value upon maturity of the Treasury Obligations), even if
the Trust never paid a dividend and the value of the Special Situations
shares were to decrease to zero, which the Sponsor considers highly
unlikely. This feature of the Trust provides Unit holders who purchase
Units at a price of $10.00 or less per Unit with total principal
protection, including any sales charges paid, although they might forego
any earnings on the amount invested. To the extent that Units are
purchased at a price less than $10.00 per Unit, this feature may also
provide a potential for capital appreciation. As a result of the
volatile nature of the market for zero coupon U.S. Treasury bonds, Units
sold or redeemed prior to maturity will fluctuate in price and the
underlying Treasury Obligations may be valued at a price greater or less
than their value as of the Initial Date of Deposit. UNIT HOLDERS
DISPOSING OF THEIR UNITS PRIOR TO THE MATURITY OF THE TRUST MAY RECEIVE
MORE OR LESS THAN $10.00 PER UNIT, DEPENDING ON MARKET CONDITIONS ON THE
DATE UNITS ARE SOLD OR REDEEMED.
BOTH PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1
The Treasury Obligations deposited in the Trust will mature on August
15, 2005 (the "Treasury Obligations Maturity Date"). The Treasury
Obligations in the Trust have a maturity value equal to or greater than
the aggregate Public Offering Price (which includes the sales charge) of
the Units of the Trust on the Initial Date of Deposit. The Special
Situations shares deposited in the Trust's portfolio have no fixed
maturity date and the net asset value of the shares will fluctuate. See
"Portfolio" in Part One. The Trust will automatically terminate shortly
after the maturity of the Treasury Obligations deposited therein.
Public Offering Price. The secondary market Public Offering Price per
Unit will be based upon a pro rata share of the bid prices of the
Treasury Obligations and the net asset value of the Special Situations
shares in the Trust plus or minus a pro rata share of cash, if any, in
the Capital and Income Accounts of the Trust plus a maximum sales charge
as set forth in "Summary of Essential Information" in Part One. The
minimum purchase is that amount set forth in Part One. The sales charge
is reduced on a graduated scale for sales involving at least 2,500
Units. See "How is the Public Offering Price Determined?"
Income and Capital Gains Distributions. Distributions, if any, of net
income, other than amortized discount, will be made at least annually.
Distributions of realized capital gains, if any, received by the Trust,
will be made whenever Special Situations makes such a distribution. Any
distribution of income and/or capital gains will be net of the expenses
of the Trust. INCOME WITH RESPECT TO THE ACCRUAL OF ORIGINAL ISSUE
DISCOUNT ON THE TREASURY OBLIGATIONS WILL NOT BE DISTRIBUTED CURRENTLY,
ALTHOUGH UNIT HOLDERS WILL BE SUBJECT TO FEDERAL INCOME TAX AT ORDINARY
INCOME RATES AS IF A DISTRIBUTION HAD OCCURRED. See "What is the Federal
Tax Status of Unit Holders?" Additionally, upon termination of the
Trust, the Trustee will distribute, upon surrender of Units for
redemption, to each Unit holder his or her pro rata share of the Trust's
assets, less expenses, in the manner set forth under "Rights of Unit
Holders-How are Income and Capital Distributed?"
Reinvestment. Each Unit holder will, unless he or she elects to receive
cash payments, have distributions of principal (including, if elected by
Unit holders, the proceeds received upon the maturity of the Treasury
Obligations in the Trust at termination), capital gains, if any, and
income earned by the Trust, automatically invested in shares of Special
Situations (if Units are registered in the Unit holder's state of
residence) in the name of the Unit holder. Such distributions
(including, if elected by Unit holders, the proceeds received upon the
maturity of the Treasury Obligations in the Trust at termination) will
be reinvested without a sales charge to the Unit Holder on each
applicable distribution date. See "Rights of Unit Holders-How Can
Distributions to Unit Holders be Reinvested?"
Secondary Market for Units. The Sponsor may maintain a market for Units
of the Trust and offer to resell such Units at prices which are based on
the aggregate bid side evaluation of the Treasury Obligations and the
aggregate net asset value of Special Situations shares in the Trust plus
or minus a pro rata share of cash, if any, in the Capital and Income
Accounts of the Trust plus a maximum sales charge as set forth in
"Summary of Essential Information" in Part One. As of the date of this
Prospectus, the Sponsor is maintaining a secondary market. If a
secondary market is not maintained in the future, a Unit holder may
redeem Units through redemption at prices based upon the aggregate bid
price of the Treasury Obligations plus the aggregate net asset value of
the Special Situations shares in the Trust plus or minus a pro rata
share of cash, if any, in the Capital and Income Accounts of the Trust.
All expenses incurred in maintaining a secondary market, other than the
fees of the Evaluator, the supervisory and audit expenses and the costs
of the Trustee in transferring and recording the ownership of Units,
will be borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases of
Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS OR HER
UNITS, HE OR SHE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET
PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. See
"Rights of Unit Holders-How May Units be Redeemed?"
Page 2
FIRST INVESTORS SPECIAL SITUATIONS
GROWTH & TREASURY SECURITIES TRUST
What is First Investors Special Situations Growth & Treasury Securities
Trust?
The First Investors Special Situations Growth & Treasury Securities
Trust is a series of investment companies created by the Sponsor under
the name of First Investors Special Situations Growth & Treasury
Securities 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 was created under the laws of the State of New
York pursuant to a Trust Agreement (the "Indenture"), dated the Initial
Date of Deposit, with Nike Securities L.P., as Sponsor, The Bank of New
York, as Trustee, and First Trust Advisors L.P., as Portfolio Supervisor
and Evaluator.
The objective of the Trust is to protect Unit holders' capital by
investing a portion of the Trust's portfolio in zero coupon U.S.
Treasury bonds ("Treasury Obligations") and to provide for potential
capital appreciation by investing a portion of the Trust's portfolio in
shares of First Investors Special Situations Series ("Special
Situations" or "Series"), a separate designated series of First
Investors Series Fund (the "Fund"). The Fund is an open-end diversified
management company. Special Situations' investment objective is to seek
long-term growth of capital. The Treasury Obligations evidence the right
to receive a fixed payment at a future date from the U.S. Government and
are backed by the full faith and credit of the U.S. Government. The
guarantee of the U.S. Government does not apply to the market value of
the Treasury Obligations or the Units of the Trust, whose net asset
value will fluctuate and, prior to maturity, may be more or less than a
Unit holder's acquisition cost. Collectively, the Treasury Obligations
and Special Situations shares in the Trust are referred to herein as the
"Securities." There is, of course, no guarantee that the objective of
the Trust will be achieved.
The Trust has been organized so that purchasers of Units should receive,
at the termination of the Trust, an amount per Unit at least equal to
$10.00 per Unit (which is equal to the per Unit value upon maturity of
the Treasury Obligations), even if the Special Situations shares never
paid a dividend and the value of Special Situations shares in the Trust
were to decrease to zero, which the Sponsor considers highly unlikely.
Furthermore, the Sponsor will take such steps in connection with the
deposit of additional Securities in the Trust as are necessary to
maintain a maturity value of the Units of the Trust at least equal to
$10.00 per Unit. The receipt of only $10.00 per Unit upon the
termination of the Trust (an event which the Sponsor believes is
unlikely) represents a substantial loss on a present value basis.
Furthermore, the $10.00 per Unit in no respect protects investors
against diminution in the purchasing power of their investment due to
inflation (although expectations concerning inflation are a component in
determining prevailing interest rates, which in turn determine present
values). To the extent that Units of the Trust are redeemed, the
aggregate value of the Securities in the Trust will be reduced and the
undivided fractional interest represented by each outstanding Unit of
the Trust will increase. See "How May Units be Redeemed?" The Trust has
a Mandatory Termination Date as set forth under "Summary of Essential
Information" in Part One.
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 for the Units,
legal and accounting expenses, expenses of the Trustee and other out-of-
pocket expenses. The Sponsor will not receive any fees in connection
with its activities relating to the Trust. However, First Trust Advisors
L.P., an affiliate of the Sponsor, will receive an annual supervisory
fee, which is not to exceed the amount set forth under "Summary of
Essential Information" appearing in Part One, for providing portfolio
supervisory services for the Trust. Such fee is based on the number of
Units outstanding in the Trust on January 1 of each year except during
the year or years in which an initial offering period occurs in which
case the fee for a month is based on the number of Units outstanding at
the end of such month. The fee may exceed the actual costs of providing
such supervisory services for the Trust, but at no time will the total
amount received for portfolio supervisory services rendered to unit
Page 3
investment trusts of which Nike Securities L.P. is the Sponsor in any
calendar year exceed the aggregate cost of First Trust Advisors L.P. of
supplying such services in such year.
The Evaluator will receive a fee as indicated in the "Summary of
Essential Information" appearing in Part One. No fee is paid to the
Evaluator with respect to the Special Situations shares in the Trust.
The Trustee pays certain expenses of the Trust for which it is
reimbursed by the Trust. The Trustee will receive for its ordinary
recurring services to the Trust and for all normal expenses of the
Trustee incurred by or in connection with its responsibilities under the
Indenture, an annual fee computed at $0.0085 per annum per Unit in the
Trust outstanding based upon the largest aggregate number of Units of
the Trust outstanding at any time during the year. For a discussion of
the services performed by the Trustee pursuant to its obligations under
the Indenture, reference is made to the material set forth under "Rights
of Unit Holders." Rule 12b-1 fees imposed on shares of Special
Situations held in the Trust, are rebated to the Trust, deposited in the
Income Account and are used to pay expenses of the Trust.
The Trustee's and Evaluator's fees are payable from the Income Account
of the Trust to the extent funds are available and then from the Capital
Account of the Trust. Since the Trustee has the use of the funds being
held in the Capital and Income Accounts for payment of expenses *and
redemptions and since such Accounts are 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.
The following additional charges are or may be incurred by the Trust:
all legal and annual auditing expenses of the Trustee incurred by or in
connection with its responsibilities under the Indenture; the expenses
and costs of any action undertaken by the Trustee to protect the Trust
and the rights and interests of the Unit holders; fees of the Trustee
for any extraordinary services performed under the Indenture;
indemnification of the Trustee for any loss, liability or expense
incurred by it without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with its acceptance or
administration of the Trust; indemnification of the Sponsor for any
loss, liability or expense incurred without gross negligence, bad faith
or willful misconduct in acting as depositor of the Trust; all taxes and
other government charges imposed upon the Securities or any part of the
Trust (no such taxes or charges are being levied or made or, to the
knowledge of the Sponsor, contemplated). The above expenses and the
Trustee's annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to sell
Securities in the Trust in order to make funds available to pay all
these amounts if funds are not otherwise available in the Income and
Capital Accounts of the Trust except that the Trustee shall not sell
Treasury Obligations to pay Trust expenses. Since the Special Situations
shares consist primarily of common stock and the income stream produced
by dividends is unpredictable, the Sponsor cannot provide any assurance
that dividends will be sufficient to meet any or all expenses of the
Trust. As discussed above, if dividends are insufficient to cover
expenses, it is likely that Special Situations shares will have to be
sold to meet Trust expenses. These sales may result in capital gains or
losses to Unit holders. See "What is the Federal Tax Status of Unit
Holders?"
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. So
long as the Sponsor is making a secondary market for the Units, the
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.005 per Unit. Unit holders of the Trust covered by
an audit may obtain a copy of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended
(the "Code"). Unit holders should consult their tax advisers in
determining the Federal, state, local and any other tax consequences of
the purchase, ownership and disposition of Units in the Trust.
Page 4
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 each of the assets of the Trust under the
Code; the income of the Trust will be treated as income of the Unit
holders thereof under the Code; and each Unit holder will be considered
to have received his or her pro rata share of income derived from each
Trust asset when such income is considered to be received by the Trust.
2. Each Unit holder will have a taxable event when the Trust disposes
of a Security (whether by sale, exchange, liquidation, redemption,
payment at maturity or otherwise) or upon the sale or redemption of
Units by such Unit holder. The price a Unit holder pays for his or her
Units is allocated among his or her pro rata portion of each Security
held by the Trust (in proportion to the fair market values thereof on
the date the Unit holder purchases his or her Units) in order to
determine his or her initial basis (before adjustment for accrual of
original issue discount) for his or her pro rata portion of each
Security held by the Trust. The Treasury Obligations are treated as
stripped bonds and are treated as bonds issued at an original issue
discount as of the date a Unit holder purchases his or her Units.
Because the Treasury Obligations represent interests in "stripped" U.S.
Treasury bonds, a Unit holder's initial cost for his or her pro rata
portion of each Treasury Obligation held by the Trust (determined at the
time he or she acquires his or her 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 or her
daily portions of original issue discount attributable to the Treasury
Obligations 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 a Treasury Regulation relating to stripped bonds. To
the extent the amount of such discount is less than the respective "de
minimis" amount, such discount is generally treated as zero. In general,
original issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding of accrued
interest. In the case of the Treasury Obligations, this method will
generally result in an increasing amount of income to the Unit holders
each year. Unit holders should consult their tax advisers regarding the
Federal income tax consequences and accretion of original issue
discount. For Federal income tax purposes, a Unit holder's pro rata
portion of dividends (other than designated capital gain dividends as
discussed below) as defined by Section 316 of the Code, paid with
respect to a Special Situation shares held by the Trust is taxable as
ordinary income to the extent of such Special Situation's current and
accumulated "earnings and profits." A Unit holder's pro rata portion of
dividends paid on such Special Situation share which exceed such current
and accumulated earnings and profits will first reduce a Unit holder's
tax basis in such Special Situation share, and to the extent that such
dividends exceed a Unit holder's tax basis in such Special Situation
shall generally be treated as capital gain. In general, any such capital
gain will be short-term unless a Unit holder has held his or her Units
for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust
will generally be considered a capital gain except in the case of a
dealer and, in general, will be long-term if the Unit holder has held
his or her Units for more than one year (the date on which the Units are
acquired (i.e., the "trade date") is excluded for purposes of
determining whether Units have been held for more than one year). A Unit
holder's portion of loss, if any, upon the sale or redemption of Units
or the disposition of Securities held by the Trust will generally be
considered a capital loss (except in the case of a dealer) and, in
general, will be long-term if the Unit holder has held his or her Units
for more than one year. Unit holders should consult their tax advisers
regarding the recognition of such capital gains and losses for Federal
income tax purposes.
Because Unit holders are deemed to directly own a pro rata portion of
the Special Situations shares as discussed above, Unit holders are
Page 5
advised to read the discussion of tax consequences set forth in the
current prospectus for Special Situations. Distributions declared by
Special Situations on the Special Situations shares in October, November
or December that are held by the Trust and paid during the following
January will be treated as having been received by Unit holders on
December 31 in the year such distributions were declared. Distributions
of the Fund's net capital gain which the Fund properly designates as
capital gain dividends will be taxable to the Unit holders as long-term
capital gains regardless of how long a person has been a Unit holder. If
a Unit holder holds his or her Units for six months or less or if the
Trust holds shares of Special Situations for six months or less, any
loss incurred by a Unit holder related to the disposition of Special
Situations shares will be treated as a long-term capital loss to the
extent of any long-term capital gains distributions received (or deemed
to have been received) with respect to such shares. For taxpayers other
than corporations, net capital gains are subject to a maximum marginal
tax rate of 28%. However, it should be noted that legislative proposals
are introduced from time to time that affect tax rates and could affect
relative differences at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum
stated rate for taxpayers other than corporations. Because some or all
capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after
April 30, 1993. Unit holders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision
on their investment in Units. If the Unit holder disposes of a Unit, he
is deemed thereby to have disposed of his entire pro rata interest in
all assets of the Trust involved including his pro rata portion of all
the Securities represented by that Unit.
Distributions on the Special Situation shares which are taxable as
ordinary income to the Unit holders will constitute dividends for
Federal income tax purposes. To the extent dividends received by the
Special Situations are attributable to foreign corporations, a
corporation that owns Units will not be entitled to the dividends
received deduction with respect to the pro rata portion of such
dividends, since the dividends received deduction is generally available
only with respect to dividends paid by domestic corporations. However,
to the extent dividends received by the Special Situations are from
United States corporations (other than real estate investment trusts)
and are designated by the Special Situation as being eligible for the
dividends received deduction, distributions received by corporate Unit
holders with respect to Special Situations attributable to such
dividends may qualify for the 70% dividends received deduction, subject
to limitations otherwise applicable to the availability of the
deduction. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced. Unit
holders should consult with their tax advisers with respect to the
limitation on an possible modification of the dividends received
deduction.
If more than 50% of the value of the total assets of Special Situations
consist of stock or securities in foreign corporations, Special
Situations may elect to pass through to its shareholders the foreign
income and similar taxes paid by Special Situations in order to enable
such shareholders to take a credit (or deduction) for foreign income
taxes paid by Special Situations. If such an election is made, Unit
holders of the Trust, because they are deemed to own a pro rata portion
of the Special Situations shares held by the Trust, as described above,
must include in their gross income, for Federal income tax purposes,
both their portion of dividends received by the Trust from Special
Situations, and also their portion of the amount which Special
Situations deems to be the Trust's portion of foreign income taxes paid
with respect to, or withheld from, dividends, interest or other income
of Special Situations from its foreign investments. Unit holders may
then subtract from their Federal income tax the amount of such taxes
withheld, or else treat such foreign taxes as deductions from gross
income; however, as in the case of investors receiving income directly
from foreign sources, the above described tax credit or deduction is
subject to certain limitations. Unit holders should consult their tax
advisers regarding this election and its consequences to them.
Each Unit holder's pro rata share of each expense paid by the Trust is
deductible by the Unit holder to the same extent as though the expense
had been paid directly by him or her. It should be noted that as result
of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
Page 6
the extent they exceed 2% of such individual's adjusted gross income.
Unit holders may be required to treat some or all of the expenses of the
Trust as miscellaneous itemized deductions subject to this limitation.
General. Each Unit holder will be requested to provide its taxpayer
identification number to the Trustee and to certify that the Unit holder
has not been notified that payments to the Unit holder are subject to
back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions
by the Trust to such Unit holder (including amounts received upon the
redemption of Units) will be subject to back-up withholding.
Distributions by the Trust will generally be subject to United States
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-United
States persons (accrual of original issue discount on the Treasury
Obligations may not be subject to Federal taxation or withholding
provided certain requirements are met). Such persons should consult
their tax advisers.
Unit holders will be notified annually of the amounts of original issue
discount, dividend income and long-term capital gains distributions
includable in the Unit holder's gross income and the amount of Trust
expenses which may be claimed as itemized deductions.
Distributions of income, long-term capital gains and accrual of original
issue discount may also be subject to state and local taxes. Foreign
investors may be subject to different Federal income tax consequences
than those described above. Investors should consult their tax advisers
for specific information on the tax consequences of particular types of
distributions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trust Suitable for
Retirement Plans?"
In the opinion of Tanner Propp & Farber, Special Counsel to the Trust
for New York tax matters, under the existing income tax laws of the
State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, pension funds and other tax-deferred retirement
plans. Generally, the Federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Treasury Obligations?
The Treasury Obligations deposited in the Trust consist of U.S. Treasury
bonds which have been stripped of their unmatured interest coupons. The
Treasury Obligations evidence the right to receive a fixed payment at a
future date from the U.S. Government, and are backed by the full faith
and credit of the U.S. Government. Treasury Obligations are purchased at
a deep discount because the buyer obtains only the right to a fixed
payment at a fixed date in the future and does not receive any periodic
interest payments. The effect of owning deep discount bonds which do not
make current interest payments (such as the Treasury Obligations) is
that a fixed yield is earned not only on the original investment but
also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest the income on such
obligations at a rate as high as the implicit yield on the discount
obligation, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, the Treasury
Obligations are subject to substantially greater price fluctuations
during periods of changing interest rates than are securities of
comparable quality which make regular interest payments. The effect of
being able to acquire the Treasury Obligations at a lower price is to
Page 7
permit more of the Trust's portfolio to be invested in shares of Special
Situations.
What is First Investors Special Situations Series?
The portfolio of the Trust also contains shares of First Investors
Special Situations Series.
Organization. First Investors Series Fund is a Massachusetts business
trust organized on September 23, 1988 which contains five series,
including Special Situations Series. The Fund's Board of Trustees has
authority to issue an unlimited number of shares of beneficial interest
of separate series, no par value, of the Fund. Prior to February 15,
1990, the name of the Fund was First Investors Fund. Shares of Special
Situations Series have equal dividend, voting, liquidation and
redemption rights with all other shares of that Series. In the event of
establishment of classes, each class of the Series shall represent
interests in the assets of that Series and shall have identical voting,
dividend, liquidation and other rights and the same terms and conditions
as any other class of that Series, except that expenses allocated to a
class of the Series may be borne solely by that class and a class of the
Series may have exclusive voting rights with respect to matters
affecting only that class. The Fund does not hold annual shareholder
meetings. If requested to do so by the holders of at least 10% of the
Fund's outstanding shares, the Board of Trustees will call a special
meeting of shareholders for any purpose, including the removal of Trustees.
Custodian. The Bank of New York, 48 Wall Street, New York, NY 10286, is
a custodian of the securities and cash of the Series.
Transfer Agent. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and First Investors
Corporation ("FIC"), acts as transfer and dividend disbursing agent for
the Series and as redemption agent for regular redemptions. The Transfer
Agent's telephone number is 1-800-423-4026.
Share Certificates. The Series does not issue share certificates unless
requested in writing to do so. Ownership of shares of the Series is
recorded on a stock register by the Transfer Agent and shareholders have
the same rights of ownership with respect to such shares as if
certificates had been issued.
Confirmations and Statements. You will receive confirmations of
purchases and redemptions of shares of the Series. Statements of shares
owned will be sent to you following a transaction in the account,
including payment of a dividend or capital gain distribution in
additional shares or cash.
Shareholder Inquiries. Shareholder inquiries regarding Special
Situations can be made by calling Shareholder Services at 1-800-423-4026.
Fee Table. The following table is intended to assist investors in
understanding the expenses associated with investing in the Series.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)+ 6.25%
Exchange Fee $0
Annual Fund Operating Expenses
(as a percentage of average net assets)
<TABLE>
<CAPTION>
Total Fund
Management 12b-1 Other Operating
Series of the Fund Fees (1) Fees Expenses Expenses (2)
__________________________ ______________ ______ _________ ____________
<S> <C> <C> <C> <C>
Special Situations Series 0.75%* 0.30%++ 0.55% 1.60%*
</TABLE>
[FN]
____________________
* Net of waiver and/or reimbursement.
(1) For the fiscal year ended December 31, 1995, the Adviser waived
Management Fees in excess of 0.75% for the Series. If not waived,
Management Fees for the Series would have been 1.00%. The Adviser
expects to continue to waive such fees for a minimum period ending
December 31, 1996.
(2) If certain fees and expenses were not waived, Total Fund Operating
Expenses for Special Situations Series would have been 1.85%.
+ There is no sales load payable upon the purchase of the Special
Situations shares deposited in the Trust. However, the maximum sales
charge on the Units, and therefore indirectly on the Special Situations
shares is 6.0% in the secondary market.
++ Effectively, there are no 12b-1 fees on Special Situations shares
held in the Trust. However, Unit holders who acquire shares of Special
Situations through reinvestment of dividends or other distributions or
through reinvestment at the Trust's termination will begin to incur 12b-
1 fees at such time as shares are acquired.
Page 8
For a more complete description of the various costs and expenses, see
"How to Buy Shares", "How to Redeem Shares", "Management" and "Distribution
Plans" in the Special Situations Prospectus. Due to the imposition of 12b-1
fees, it is possible that long-term shareholders of a Series may pay more
in total sales charges than the economic equivalent of the maximum front-end
sales charge permitted by the rules of the National Association of Securities
Dealers, Inc.
The example below is based on expense data for the Series' fiscal year
ended December 31, 1995, except that certain Operating Expenses have
been restated to reflect expenses expected to be incurred in fiscal
1995, as noted above:
EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Three Five Ten
One Year Years Years Years
__________________________ ________ ______ ______ ______
<S> <C> <C> <C> <C>
Special Situations Series ++ $78 $110 $144 $241
</TABLE>
The expenses in the Example should not be considered a representation by
the Series of past or future expenses. Actual expenses in future years
may be greater or less than those shown.
Financial Highlights. The following table sets forth the Special
Situations Series' per share operating performance data for a share of
beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated. The table
has been derived from financial statements which are covered by another
independent certified public accountants' report appearing in the Funds'
Statement of Additional Information ("SAI"). This information should be
read in conjunction with the Financial Statements and Notes thereto for
the Series, which also appear in the SAI, available at no charge upon
request to the Series.
<TABLE>
<CAPTION>
Year Ended December 31
1991 1992 1993 1994 1995
_____ _____ _____ _____ _____
<S> <C> <C> <C> <C> <C>
Per Share Data
Net Asset Value - Beginning of Period $ 9.58 $13.99 $15.62 $18.00 $16.43
====== ====== ====== ====== ======
Income from Investment Operations:
Net Investment Income (Loss) + .10 - (.08) (.04) (.01)
Net Realized and Unrealized Gain
(Loss) on investments 4.74 2.41 3.29 (.62) 3.94
______ ______ ______ ______ ______
Total from Investment Operations 4.84 2.41 3.21 (.66) 3.93
====== ====== ====== ====== ======
Less Distributions From:
Net Investment Income .10 - - - -
Net Realized Gain on Investments .33 .78 .83 .91 .73
______ ______ ______ ______ ______
Total Distributions .43 .78 .83 .91 .73
====== ====== ====== ====== ======
Net Asset Value - End of Period $13.99 $15.62 $18.00 $16.43 $19.63
====== ====== ====== ====== ======
Total Return * 50.47% 17.26% 20.52% (3.66)% 23.92%
Ratios/Supplemental Data
Net Assets-End of Period (in thousands) 9,183 25,814 59,148 89,906 125,331
Ratio of Expenses to Average Net Assets + - 1.06% 1.55% 1.65% 1.60%
Ratio of Net Investment Income to
Average Net Assets + 1.44% (.05)% (.63)% (.26)% (.10)%
Ratio of Expenses to Average Net Assets Before
Expenses Waived or Assumed 2.31% 1.92% 1.89% 1.90% 1.85%
Ratio of Net Investment Income to Average Net
Assets Before Expenses Waived or Assumed (.87)% (.91)% (.96)% (.51)% (.35)%
Portfolio Turnover Rate 86% 88% 71% 53% 80%
</TABLE>
[FN]
____________________
+ Net of expenses waived or assumed by the investment adviser.
* Calculated without sales charge.
Page 9
What is Special Situations' Investment Objective and Policies?
Special Situations seeks long-term growth of capital. The Series seeks
to achieve its objective by investing, under normal market conditions,
at least 65% of its total assets in the common stock of companies with
small to medium market capitalization that the Adviser considers to be
undervalued or less well known in the current marketplace and to have
potential for capital growth. The Series may invest up to 35% of its
total assets in other common stocks, in preferred stock that is
convertible into common stock issued by U.S. corporations, and in the
common stock of companies located outside the United States.
Special Situations seeks to invest in the common stock of companies that
the Adviser believes are undervalued in the current market in relation
to fundamental economic values such as earnings, sales, cash flow and
tangible book value; that are early in their corporate development
(i.e., before they become widely recognized and well known and while
their reputations and track records are still emerging); or that offer
the possibility of greater earnings because of revitalized management,
new products or structural changes in the economy. Such companies
primarily are those with small to medium market capitalization, which
the Series considers to be up to $1.5 billion. The Adviser believes
that, over time, these securities are more likely to appreciate in price
than securities whose market prices have already reached their perceived
economic value. In addition, the Series intends to diversify its
holdings among as many companies and industries as the Adviser deems
appropriate.
Companies that are early in their corporate development may be dependent
on relatively few products or services, may lack adequate capital
reserves, may be dependent on one or two management individuals and may
have less of a track record or historical pattern of performance. In
addition, there may be less information available as to the issuers and
their securities may not be well known to the general public and may not
yet have wide institutional ownership. Thus, the investment risk is
higher than that normally associated with larger, older or better-known
companies.
Investments in securities of companies with small to medium market
capitalization are generally considered to offer greater opportunity for
appreciation and to involve greater risk of depreciation than securities
of companies with larger market capitalization. These include the equity
securities of companies which represent new or changing industries and
those which, in the opinion of the Adviser, represent special
situations, the potential future value of which has not been fully
recognized. Growth securities of companies with small to medium market
capitalization which represent a special situation bear the risk that
the special situation will not develop as favorably as expected, or the
situation may deteriorate. For example, a merger with favorable
implications may be blocked, an industrial development may not enjoy
anticipated market acceptance or a bankruptcy may not be as profitably
resolved as had been expected. Because the securities of most companies
with small to medium market capitalization are not as broadly traded as
those of companies with larger market capitalization, these securities
are often subject to wider and more abrupt fluctuations in market price.
In the past, there have been prolonged periods when these securities
have substantially underperformed or outperformed the securities of the
larger capitalization companies. In addition, smaller capitalization
companies generally have fewer assets available to cushion an unforeseen
adverse occurrence and thus such an occurrence may have a
disproportionately negative impact on these companies.
The majority of Special Situations' investments are expected to be
securities listed on the NYSE or other national securities exchanges, or
securities that have an established over-the-counter ("OTC") market,
although the depth and liquidity of the OTC market may vary from time to
time and from security to security.
Special Situations may invest up to 15% of its total assets in common
stocks issued by foreign companies which are traded on a recognized
domestic or foreign securities exchange. In addition to the fundamental
analysis of companies and their industries which it performs for U.S.
issuers, the Adviser evaluates the economic and political climate of the
country in which the company is located and the principal securities
markets in which such securities are traded. Although the foreign stocks
in which the Series invests are primarily denominated in foreign
currencies, the Series also may invest in American Depositary Receipts
("ADRs"). The Series' Adviser does not attempt to time actively either
short-term market trends or short-term currency trends in any market.
Page 10
The Series may invest up to 5% of its total assets in the securities of
other registered investment companies. Such investments will probably
involve additional advisory or distribution fees. The Series may borrow
money for temporary or emergency purposes in amounts not exceeding 5% of
its total assets. The Series also may enter into repurchase agreements
and engage in short sales "against the box."
In any period of market weakness or of uncertain market or economic
conditions, the Series may establish a temporary defensive position to
preserve capital by having all or part of its assets invested in short-
term fixed income securities or retained in cash or cash equivalents,
including bank certificates of deposit, bankers' acceptances,
obligations issued or guaranteed as to principal and interest by the
U.S. Government, its agencies or instrumentalities ("U.S. Government
Obligations") and commercial paper issued by domestic corporations. See
the SAI for a description of these securities.
The Series' net asset value fluctuates based mainly upon changes in the
value of its portfolio securities. The Series' investment objective and
certain investment limitations set forth in the SAI are fundamental
policies that may not be changed without shareholder approval. There can
be no assurance that the Series will achieve its investment objective.
Description of Certain Securities, Other Investment Policies and Risk
Factors
American Depositary Receipts. Special Situations may invest in sponsored
and unsponsored ADRs. ADRs are receipts typically issued by a U.S. bank
or trust company evidencing ownership of the underlying securities of
foreign issuers, and other forms of depository receipts for securities
of foreign issuers. Generally, ADRs, in registered form, are denominated
in U.S. dollars and are designed for use in the U.S. securities markets.
Thus, these securities are not denominated in the same currency as the
securities into which they may be converted. In addition, the issuers of
the securities underlying unsponsored ADRs are not obligated to disclose
material information in the United States and, therefore, there may be
less information available regarding such issuers and there may not be a
correlation between such information and the market value to the ADRs.
GDRs are issued globally and evidence a similar ownership arrangement.
Generally, GDRs are designed for trading in non-U.S. securities markets.
ADRs and GDRs are considered to be foreign securities by the Series.
Convertible Securities. A convertible security is a bond, debenture,
note, preferred stock or other security that may be converted into or
exchanged for a prescribed amount of common stock of the same or a
different issuer within a particular period of time at a specified price
or formula. A convertible security entitles the holder to receive
interest paid or accrued on debt or dividends paid on preferred stock
until the convertible security matures or is redeemed, converted or
exchanged. Convertible securities have unique investment characteristics
in that they generally (1) have higher yields than common stocks, but
lower yields than comparable non-convertible securities, (2) are less
subject to fluctuation in value than the underlying stock because they
have fixed income characteristics and (3) provide the potential for
capital appreciation if the market price of the underlying common stock
increases. See the SAI for more information on convertible securities.
Foreign Securities-Risk Factors. Special Situations may sell a security
denominated in a foreign currency and retain the proceeds in that
foreign currency to use at a future date (to purchase other securities
denominated in that currency) or the Series may buy foreign currency
outright to purchase securities denominated in that foreign currency at
a future date. Because Special Situations does not intend to hedge its
foreign investments against the risk of foreign currency fluctuations,
changes in the value of these currencies can significantly affect the
Series' share price. In addition, the Series will be affected by changes
in exchange control regulations and fluctuations in the relative rates
of exchange between the currencies of different nations, as well as by
economic and political developments. Other risks involved in foreign
securities include the following: there may be less publicly available
information about foreign companies comparable to the reports and
ratings that are published about companies in the United States; foreign
companies are not generally subject to uniform accounting, auditing and
financial reporting standards and requirements comparable to those
applicable to U.S. companies; some foreign stock markets have
substantially less volume than U.S. markets, and securities of some
foreign companies are less liquid and more volatile than securities of
comparable U.S. companies; there may be less government supervision and
regulation of foreign stock exchanges, brokers and listed companies than
exist in the United States; and there may be the possibility of
Page 11
expropriation or confiscatory taxation, political or social instability
or diplomatic developments which could affect assets of the Series held
in foreign countries.
Money Market Instruments. Investments in commercial paper are limited to
obligations rated Prime-1 by Moody's Investors Service, Inc. or A-1 by
Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. Commercial paper includes notes, drafts, or similar
instruments payable on demand or having a maturity at the time of
issuance not exceeding nine months, exclusive of days of grace or any
renewal thereof. Investments in certificates of deposit will be made
only with domestic institutions with assets in excess of $500 million.
See the SAI for more information regarding money market instruments and
Appendix A to the SAI for a description of commercial paper ratings.
Preferred Stock. A preferred stock is a blend of the characteristics of
a bond and common stock. It can offer the higher yield of a bond and has
priority over common stock in equity ownership, but does not have the
seniority of a bond and, unlike common stock, its participation in the
issuer's growth may be limited. Preferred stock has preference over
common stock in the receipt of dividends and in any residual assets
after payment to creditors should the issuer be dissolved. Although the
dividend is set at a fixed annual rate, in some circumstances it can be
changed or omitted by the issuer.
Repurchase Agreements. Repurchase agreements are transactions in which
the Series purchases securities from a bank or recognized securities
dealer and simultaneously commits to resell the securities to the bank
or dealer at an agreed-upon date and price reflecting a market rate of
interest unrelated to the coupon rate or maturity of the purchased
securities. The Series' risk is limited to the ability of the seller to
repurchase the securities at the agreed-upon price upon the delivery
date. See the SAI for more information regarding repurchase agreements.
Restricted and Illiquid Securities. The Series may invest up to 15% of
its net assets in illiquid securities, including (1) securities that are
illiquid due to the absence of a readily available market or due to
legal or contractual restrictions on resale and (2) repurchase
agreements maturing in more than seven days. However, illiquid
securities for purposes of this limitation do not include securities
eligible for resale under Rule 144A under the Securities Act of 1933, as
amended (the "1933 Act"), which the Fund's Board of Trustees or the
Adviser has determined are liquid under Board-approved guidelines. The
Series may invest up to 5% of its total assets in Rule 144A securities.
See the SAI for more information regarding restricted and illiquid
securities.
U.S. Government Obligations. Securities issued or guaranteed as to
principal and interest by the U.S. Government include (1) U.S. Treasury
obligations which differ only in their interest rates, maturities and
time of issuance as follows: U.S. Treasury bills (maturities of one year
or less), U.S. Treasury notes (maturities of one to ten years) and U.S.
Treasury bonds (generally maturities of greater than ten years), and (2)
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities that are backed by the full faith and credit of the
United States, such as securities issued by the Federal Housing
Administration, Government National Mortgage Association, the Department
of Housing and Urban Development, the Export-Import Bank, the General
Services Administration and the Maritime Administration and certain
securities issued by the Farmers Home Administration and the Small
Business Administration. The range of maturities of U.S. Government
Obligations is usually three months to thirty years. For additional
information concerning these and other investment policies of the
Series, see the SAI.
Who is the Management of Special Situations?
Board of Trustees. The Fund's Board of Trustees, as part of its overall
management responsibility, oversees various organizations responsible
for the Series' day-to-day management.
Adviser. First Investors Management Company, Inc. ("FIMCO") supervises
and manages the Series' investments, determines the Series' portfolio
transactions and supervises all aspects of the Series' operations. The
Adviser is a New York corporation located at 95 Wall Street, New York,
NY 10005. The Adviser presently acts as investment adviser to 14 mutual
funds. First Investors Consolidated Corporation ("FICC") owns all of the
voting common stock of the Adviser and all of the outstanding stock of
FIC and the Transfer Agent. Mrs. Julie W. Grayson (through shares to be
received pursuant to probate proceedings) and Mr. Glenn O. Head (or
members of his family) are controlling persons of FICC and, therefore,
jointly control the Adviser.
Page 12
As compensation for its services, the Adviser receives an annual fee
from the Series, which is payable monthly. For the fiscal year ended
December 31, 1995, the advisory fee was 0.75% of average daily net
assets, net of waiver.
The Series bears all expenses of its operations other than those
incurred by the Adviser or the Series' Underwriter under the terms of
its advisory or underwriting agreements. Series expenses include, but
are not limited to: the advisory fee; shareholder servicing fees and
expenses; custodian fees and expenses; legal and auditing fees; expenses
of communicating to existing shareholders, including preparing, printing
and mailing prospectuses and shareholder reports to such shareholders;
and proxy and annual meeting expenses.
Portfolio Manager. Patricia D. Poitra has been Portfolio Manager for
Special Situations Series since its inception in 1990. Ms. Poitra joined
FIMCO in 1985 as a Senior Equity Analyst. Ms. Poitra also is Portfolio
Manager for the Blue Chip Series and Discovery Series of First Investors
Life Series Fund, the Blue Chip Fund of Executive Investors Trust, the
Made In the U.S.A. Fund of First Investors Series Fund II, Inc., the
Blue Chip Series of First Investors Series Fund and, since 1993, the
small capitalization equity portion of the Total Return Series of First
Investors Series Fund.
Brokerage. The Series may allocate brokerage commissions to broker-
dealers in consideration of Series share distribution, but only when
execution and price are comparable to that offered by other broker-
dealers. See the SAI for more information on allocation of portfolio
brokerage.
Underwriter. The Fund has entered into an Underwriting Agreement with
FIC, 95 Wall Street, New York, NY 10005, pursuant to which FIC acts as
the Series' Underwriter ("Series Underwriter"). The Underwriter receives
all sales charges in connection with the sale of the Series' shares and
may receive payments under a plan of distribution. See "How to Buy
Shares" and "Distribution Plan" in the Series' Prospectus.
Regulatory Matters. In June 1992, the Fund's underwriter FIC, entered
into a settlement with the Securities and Exchange Commission ("SEC") to
resolve allegations by the agency that certain of FIC's sales
representatives had made misrepresentations concerning the risks of
investing in two high-yield bond funds, the First Investors Fund For
Income, Inc. and the First Investors High Yield Fund, Inc. ("High Yield
Funds"), and had sold these Funds to investors for whom they were not
suitable. Without admitting or denying the SEC's allegations, FIC: (a)
consented to the entry of a final judgment enjoining it from violating
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder and Section 17(a) of the 1933 Act; (b) agreed to the entry of
an administrative order censuring it and requiring it to comply with
undertakings to improve its policies and procedures with regard to
sales, training, supervision and compliance; and (c) agreed to pay $24.7
million to certain investors who purchased shares of the High Yield
Funds from in or about November 1984 to in or about November 1990.
FIC, FIMCO and/or certain affiliated entities and persons have entered
into settlements with regulators in 29 states to resolve allegations,
similar to those made by the SEC, concerning sales of the High Yield
Funds. In October 1993, as part of settlements with Maine,
Massachusetts, New York, Virginia and Washington ("State of
Settlements"), FIC, FIMCO and certain affiliated entities and persons
agreed, without admitting or denying any of the allegations, (a) to be
enjoined from violating certain provisions of the state securities laws,
(b) to engage in remedial measures designed to ensure that proper sales
practices are observed in the future, and (c) to pay $7.5 million, in
addition to the $24.7 million previously paid by FIC in connection with
the SEC settlement, to investors in the High Yield Funds. In addition,
as part of those settlements, several FIC executives including Glenn O.
Head, who is an officer and trustee of the Fund agreed to be suspended
and enjoined temporarily from associating with any broker/dealer in a
supervisory capacity in certain of the states. On December 8, 1993,
several present and former FIC executives, including Mr. Head, also
agreed, without admitting or denying the allegations, to temporary SEC
suspensions form associating with broker/dealers and in some cases other
regulated entities in a supervisory capacity.
Distribution Plan. Pursuant to an Amended and Restated Plan of
Distribution ("12b-1 Plan"), the Series is authorized to pay the Series'
Underwriter a fee at the annual rate of 0.30% of such Series' average
daily net assets as compensation for the Underwriter's activities
relating to the distribution of Series shares ("distribution fees") and
the servicing and maintenance of existing Series shareholder accounts
("service fees"). Distribution fees are paid for activities relating to
the distribution of the Series' shares, including costs of printing and
Page 13
dissemination of sales material or literature, prospectuses and reports
used in connection with the sale of Series shares. Service fees are paid
for the ongoing maintenance and servicing of existing shareholder
accounts, including payments to registered representatives who provide
shareholder liaison services to their customers who are shareholders of
the Series, provided they meet certain criteria.
Payments made to the Series' Underwriter under the 12b-1 Plan will
represent compensation for distribution and service activities, not
reimbursement for specific expenses incurred. Thus, even if the expenses
of the Series' Underwriter exceed its distribution and/or service fees
for the Series, the Series will not be obligated to pay more than those
fees, and if the Underwriter's expenses are less than those fees, it
will retain the full fees and realize a profit. The Series will pay the
distribution and service fees until the Underwriting Agreement or the
12b-1 Plan is terminated or not renewed. In that event, the expenses of
the Series' Underwriter in excess of distribution and service fees
received or accrued through the termination date will be the
Underwriter's sole responsibility and not obligations of the Series. The
distribution and service fees paid to the Series' Underwriter by the
Series will not be used for expenses of any other series of the Fund.
THE RULE 12B-1 FEES IMPOSED ON SHARES HELD IN THE TRUST ARE REBATED TO
THE TRUST AND ARE USED TO REDUCE EXPENSES OF THE TRUST RESULTING IN
INCREASED DISTRIBUTIONS TO UNIT HOLDERS. UNIT HOLDERS WHO ACQUIRE SHARES
OF SPECIAL SITUATIONS THROUGH REINVESTMENT OF DIVIDENDS OR OTHER
DISTRIBUTIONS OR THROUGH REINVESTMENT AT THE TRUST'S TERMINATION WILL
BEGIN TO INCUR RULE 12B-1 FEES AT SUCH TIME AS SHARES ARE ACQUIRED.
Determination of Net Asset Value. The net asset value of shares of the
Series is determined as of the close of regular trading on the NYSE
(generally 4:00 p.m. Eastern time) on each day the NYSE is open for
trading, and at such other times as the Board of Trustees deems
necessary, by dividing the market value of the securities held by the
Series, plus any cash and other assets, less all liabilities, by the
number of shares outstanding. If there is no available market value,
securities will be valued at their fair value as determined in good
faith pursuant to procedures adopted by the Board of Trustees. The NYSE
currently observes the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Dividends and Other Distributions. Dividends from net investment income
are generally declared annually by Special Situations Series and are
paid in additional shares of the Series at the net asset value (without
sales charge) generally determined as of the close of business on the
business day immediately following the record date of the dividend. Net
investment income includes interest and dividends, earned discount and
other income earned on portfolio securities less expenses.
The Series also distributes substantially all of its net capital gain
(the excess of net long-term capital gain over net short-term capital
loss) and net short-term capital gain, if any, after deducting any
available capital loss carryovers, and any net realized gains from
foreign currency transactions, with its regular dividend at the end of
the year. Distributions are paid in additional shares of the Series at
the net asset value (without sales charge) generally determined as of
the close of business on the business day immediately following the
record date of the distribution. The Series may make an additional
distribution if necessary to avoid a Federal excise tax on certain
undistributed income and capital gain.
Performance Information. For purposes of advertising, the Series'
performance may be calculated based on average annual total return and
total return. Each of these figures reflects past performance and does
not necessarily indicate future results. Average annual total return
shows the average annual percentage change in an assumed $1,000
investment. It reflects the hypothetical annually compounded return that
would have produced the same total return if the Series' performance had
been constant over the entire period. Because average annual total
return tends to smooth out variations in the Series' return, you should
recognize that it is not the same as actual year-by-year results.
Average annual total return includes the effect of paying the maximum
sales charge and payment of dividends and other distributions in
additional shares. Total return is computed using the same calculations
as average annual total return. However, the rate expressed is the
percentage change from the initial $1,000 invested to the value of the
investment at the end of the stated period.
Each of the above performance calculations may be based on investment at
reduced sales charge levels or at net asset value. Any quotation of
performance figures not reflecting the maximum sales charge will be
Page 14
greater than if the maximum sales charge were used. Additional
performance information is contained in the Fund's Annual Report which
may be obtained without charge by contacting the Fund at 1-800-423-4026.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust described herein.
The Sponsor has obtained an exemptive order of the Securities and
Exchange Commission ("SEC") to enable it to deposit Special Situations
shares purchased for deposit in the Trust. Under the terms of the
exemptive order, the Sponsor has agreed to take certain steps to ensure
that investment in Special Situations shares is equitable to all parties
and particularly that the interests of the Unit holders are protected.
Special Situations has agreed to waive any sales charge on shares sold
to the Trust. Furthermore, FT Evaluators L.P. has agreed to waive its
usual fee for acting as Evaluator of the Trust's portfolio with respect
to that portion of the portfolio comprised of Special Situations shares,
since information with respect to the price of Special Situations'
shares is readily available to it. In addition, the Indenture requires
the Trustee to vote all shares of Special Situations held in the Trust
in the same manner and ratio on all proposals as the vote of owners of
Special Situations shares not held by the Trust.
The value of Special Situations' shares, like the value of the Treasury
Obligations, will fluctuate over the life of the Trust and may be more
or less than the price at which they were deposited in the Trust.
Special Situations' shares may appreciate or depreciate in value (or pay
dividends or other distributions) depending on the full range of
economic and market influences affecting the securities in which it is
invested and the success of Special Situations' Adviser in anticipating
or taking advantage of such opportunities as they may occur. However,
the Sponsor believes that, upon termination of the Trust, even if the
Special Situations shares deposited in the Trust are worthless, an event
which the Sponsor considers highly unlikely, the Treasury Obligations
will provide sufficient principal to at least equal $10.00 per Unit
(which is equal to the per Unit value upon maturity of the Treasury
Obligations) for those individuals purchasing on the Initial Date of
Deposit (or any other Date when the value of the Units is $10.00 or
less). This feature of the Trust provides Unit holders with principal
protection, although they might forego any earnings on the amount
invested. To the extent that Units are purchased at a price less than
$10.00 per Unit, this feature may also provide a potential for capital
appreciation.
Unless a Unit holder purchases Units of the Trust on the Initial Date of
Deposit (or another date when the value of the Units is $10.00 or less),
total distributions, including distributions made upon termination of
the Trust, may be less than the amount paid for a Unit.
The Trustee will have no power to vary the investments of the Trust,
i.e., the Trustee will have no managerial power to take advantage of
market variations to improve a Unit holder's investment but may dispose
of Securities only under limited circumstances. See "How May Securities
be Removed from the Trust?" Of course, the portfolio of Special
Situations will be changing as the Adviser attempts to achieve Special
Situations' objective.
To the best of the Sponsor's knowledge, there is no litigation pending
as of the date of this Part Two Prospectus in respect of any Security
which might reasonably be expected to have a material adverse effect on
the Trust. Litigation may be instituted on a variety of grounds with
respect to the Securities. The Sponsor is unable to predict whether any
such litigation will be instituted, or if instituted, whether such
litigation might have a material adverse effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate bid side evaluation of the Treasury
Obligations and the net asset value of the Special Situations shares in
the Trust, plus or minus cash, if any, in the Capital and Income
Accounts held or owned by the Trust, plus a maximum sales charge of 6.0%
of the Public Offering Price (equivalent to 6.383% of the net amount
invested) divided by the number of outstanding Units of the Trust.
Page 15
The minimum purchase in the Trust is 200 Units. The applicable sales
charge is reduced by a discount as indicated below for volume purchases:
<TABLE>
<CAPTION>
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
________________________ ___________ ___________
<S> <C> <C>
2,500 but less than 5,000 5.50% 5.82%
5,000 but less than 10,000 5.25% 5.54%
10,000 but less than 25,000 4.25% 4.44%
25,000 but less than 50,000 3.25% 3.36%
50,000 but less than 75,000 2.25% 2.30%
100,000 or more 1.25% 1.27%
</TABLE>
Any such reduced sales charge shall be the responsibility of FIC. The
reduced sales charge structure will apply on all purchases of Units in
the Trust by the same person on any one day from the Underwriter.
Additionally, Units purchased in the name of the spouse of a purchaser
or in the name of a child of such purchaser under 21 years of age will
be deemed, for the purposes of calculating the applicable sales charge,
to be additional purchases by the purchaser. The reduced sales charges
will also be applicable to a trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account. The
purchaser must inform the Underwriter of any such combined purchase
prior to the sale in order to obtain the indicated discount. With
respect to the employees, officers and directors (including their
immediate families and trustees, custodians or a fiduciary for the
benefit of such person) of the Sponsor, Underwriter and their
subsidiaries, the sales charge is reduced by 4.6% of the Public Offering
Price for purchases of Units during the secondary offering period.
The Public Offering Price of Units on the date of this Part Two
Prospectus may vary from the amount stated under "Summary of Essential
Information" in Part One in accordance with fluctuations in the prices
of the underlying Securities. The aggregate value of the Units of the
Trust shall be determined (a) on the basis of the bid prices of the
Treasury Obligations and the net asset value of the Special Situations
shares therein plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust, (b) if bid prices are not
available for the Treasury Obligations, on the basis of bid prices for
comparable securities, (c) by determining the value of the Treasury
Obligations on the offer side of the market by appraisal or (d) by any
combination of the above.
The secondary market Public Offering Price will be equal to the bid
price per Unit of the Treasury Obligations and the net asset value of
the Special Situations shares therein plus or minus a pro rata share of
cash, if any, in the Capital and Income Accounts of the Trust plus the
applicable sales charge.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of Units on the date of settlement
provided payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of
1934. Delivery of Units so ordered will be made three business days
following such order or shortly thereafter. See "Rights of Unit Holders-
How May Units be Redeemed?" for information regarding the ability to
redeem Units ordered for purchase.
How are Units Distributed?
Units repurchased in the secondary market may be offered by this Part
Two Prospectus at the secondary market public offering price determined
in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Secondary market sales will be made to
dealers and others at prices which represent a concession or agency
commission of 4.0% of the Public Offering Price. However, resales of
Units of the Trust by such dealers and others to the public will be made
at the Public Offering Price described in this prospectus. The Sponsor
reserves the right to change the amount of the concession or agency
commission 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 above. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Units; however, the
Page 16
Glass-Steagall Act does permit certain agency transactions and the
banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In Texas and in certain
other states, any banks making Units available must be registered as
broker/dealers under state law.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards from
the Sponsor for each of their registered representatives who have sold a
minimum number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under which
the sales force of an Underwriter or dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such Underwriter or dealer that sponsors sales
contests or recognition programs conforming to criteria established by
the Sponsor, or participates in sales programs sponsored by the Sponsor,
an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time
pursuant to objective criteria established by the Sponsor pay fees to
qualifying Underwriters or dealers for certain services or activities
which are primarily intended to result in sales of Units of the Trust.
Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trust. These programs will not change the price
Unit holders pay for their Units or the amount that the Trust will
receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trust. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the Federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of the Trust are
described more fully elsewhere in this Prospectus.
Trust performance may be compared to performance on the same basis (with
distributions reinvested) of the Dow Jones Industrial Average, the S&P
500 Composite Price Stock Index, or performance data from Lipper
Analytical Services, Inc. and Morningstar Publications, Inc. or from
publications such as Money, The New York Times, U.S. News and World
Report, Business Week, Forbes or Fortune. As with other performance
data, performance comparisons should not be considered representative of
the Trust's relative performance for any future period.
What are the Sponsor's Profits?
In maintaining a market for the Units, the Sponsor will realize profits
or sustain losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold (which
price includes a sales charge of 6.0%) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person or entity who is registered as such owner on the books of the
Trustee. Unit holders will hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable by surrender to the Trustee accompanied by a written
instrument or instruments of transfer. Units to be redeemed must be
accompanied by a written instrument or instruments of transfer. A Unit
Page 17
holder must sign exactly as his or her name appears on the books of the
Trustee with the signature guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP") or such other signature
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.
How are Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted
interest) received with respect to any of the Securities in the Trust on
or about the Distribution Dates to Unit holders of record on the
preceding Record Date. See "Summary of Essential Information" in Part
One. Proceeds received from rebated Rule 12b-1 fees or on the sale of
any Securities in the Trust, to the extent not used to meet redemptions
of Units or pay expenses, will be distributed at least annually on each
Distribution Date to Unit holders of record on the preceding Record
Date. Income with respect to the original issue discount on the Treasury
Obligations in the Trust, will not be distributed currently, although
Unit holders will be subject to Federal income tax as if a distribution
had occurred. See "What is the Federal Tax Status of Unit Holders?"
The Record Date and Distribution Date were established so as to occur
shortly after the record date and the payment dates of Special
Situations. Special Situations normally pays dividends on its net
investment income annually. Net realized capital gains, if any, will be
distributed at least annually.
Within a reasonable time after the Trust is terminated, each Unit holder
will, upon surrender of his or her Units for redemption, receive: (i)
the number of shares of Special Situations attributable to his or her
Units, which will be distributed "in kind" directly to his or her
account, rather than redeemed, (ii) a pro rata share of the amounts
realized upon the disposition of the Treasury Obligations and (iii) a
pro rata share of any other assets of the Trust, less expenses of the
Trust, subject to the limitation that Treasury Obligations may not be
sold to pay for Trust expenses. Not less than 60 days prior to the
termination of the Trust, Unit holders will be offered the option of
having the proceeds from the disposition of the Treasury Obligations in
the Trust invested on the date such proceeds become available to the
Trust, in additional shares of Special Situations at net asset value.
Such shares will not be subject to a sales charge or a contingent
deferred sales load but such shares will incur Rule 12b-1 fees as do all
other shares held directly by investors in Special Situations. Unless a
Unit holder indicates that he or she wishes to reinvest such amounts,
they will be paid in cash, as indicated above. A Unit holder may, of
course, at any time after the Special Situations shares are distributed
to his or her account, instruct Special Situations to redeem all or a
portion of the shares in his or her account. Shares of Special
Situations, as more fully described in its prospectus, will be redeemed
at the then current net asset value. If within 180 days after the
termination of the Trust a registered owner of Units has not surrendered
the Units, the Trustee shall liquidate the shares of Special Situations
held for such Unit holder and hold the funds to which such Unit holder
is entitled until such Units are surrendered.
The Trustee will credit to the Income Account of the Trust any
dividends, distributions or rebated Rule 12b-1 fees received on the
Special Situations shares therein. All other receipts (e.g., return of
principal, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
How Can Distributions to Unit Holders be Reinvested?
Each Unit holder of the Trust will have distributions of principal, if
any, or income automatically invested in Special Situations shares (if
Units are properly registered in the name of the Unit holder) deposited
at such share's net asset value next computed, unless he or she
indicates at the time of purchase, or subsequently notifies the Trustee
in writing, that he or she wishes to receive cash payments. Shares of
Special Situations obtained through reinvestment will not be subject to
a sales charge, although such shares will incur Rule 12b-1 fees as do
all other shares held directly by investors in Special Situations.
Reinvestment by the Trust in Special Situations shares will normally be
made as of the distribution date of the Trust after the Trustee deducts
therefrom the expenses of the Trust.
Page 18
Additional information with respect to the investment objective and
policies of Special Situations is contained in its prospectus and SAI,
which can be obtained from FIC.
Unit holders who are receiving distributions in cash may elect to
participate in the automatic reinvestment feature, subject to meeting
certain suitability requirements, by filing with the Trustee an election
to have such distributions reinvested without a sales charge. Such
election must be received by the Trustee at least ten days prior to the
Record Date applicable to any distribution in order to be in effect for
such Record Date. Any such election shall remain in effect until a
subsequent notice is received by the Trustee.
Exchange Privilege. Subject to the following limitations, shares held in
a Unit holder's reinvestment account in Special Situations may be
exchanged, at net asset value, for shares of any eligible Fund,
including money market funds. In addition, Class A shares of a Fund may
be exchanged at net asset value for units of any single payment plan
("plan") sponsored by the Underwriter. Shares of a particular class may
be exchanged only for shares of the same class of another fund.
Exchanges can only be made into accounts registered to identical owners.
If your exchange is into a new account, it must meet the minimum
investment and other requirements of the fund into which the exchange is
being made. Additionally, the fund must be available for sale in the
state where you reside. Before exchanging Series shares for shares of
another fund or plan, you should read the prospectus of the fund or plan
into which the exchange is to be made. You may obtain prospectuses and
information with respect to which funds qualify for the exchange
privilege free of charge by calling Shareholder Services at 1-800-423-
4026. Exchange requests received in "good order" by the Transfer Agent
before the close of regular trading on the NYSE will be processed at the
net asset value determined as of the close of regular trading on the
NYSE that day. "Good order" means that an exchange request must include:
(1) the names of the funds, account numbers (if existing accounts), the
dollar amount, number of shares or percentage of the account you wish to
exchange; (2) share certificates, if issued; and (3) the signature of
all registered owners exactly as the account is registered. Exchange
requests received after that time will be processed on the following
trading day.
Exchanges should be made for investment purposes only. A pattern of
frequent exchanges may be contrary to the best interests of the Series'
other shareholders. Accordingly, the Series has the right, at its sole
discretion, to limit the amount of an exchange, reject any exchange, or,
upon 60 days' notice, materially modify or discontinue the exchange
privilege. The Series will consider all relevant factors in determining
whether a particular frequency of exchanges is contrary to the best
interests of the Series and its other shareholders. Any such restriction
will be made by the Series on a prospective basis only, upon notice to
the shareholder not later than ten days following such shareholder's
most recent exchange. See the Series' prospectus for further information
regarding the Exchange Privilege.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. Within a reasonable 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 the Trust
the following information in reasonable detail: (1) a summary of
transactions in the Trust for such year; (2) any Securities sold during
the year and the Securities held at the end of such year by the Trust;
(3) the redemption price per Unit based upon a computation thereof on
the 31st day of December of such year (or the last business day prior
thereto); and (4) amounts of income and capital gains distributed during
such year.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his or her Units by tender
to the Trustee at its corporate trust office in the City of New York of
a request for redemption, duly endorsed or accompanied by proper
instruments of transfer with signature guaranteed as explained above,
and payment of applicable governmental charges, if any. No redemption
fee will be charged. On the third business day following such tender,
the Unit holder will be entitled to receive in cash an amount for each
Unit equal to the redemption price per Unit next computed after receipt
by the Trustee of such tender of Units. The day of tender is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after 4:00 p.m. Eastern time, the date of tender
is the next day on which the NYSE is open for trading and such Units
Page 19
will be deemed to have been tendered to the Trustee on such day for
redemption at the redemption price computed on that day. Units so
redeemed shall be cancelled.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose. All other amounts paid on redemption shall
be withdrawn from the Capital Account of the Trust.
The Trustee is empowered to sell Securities of the Trust in order to
make funds available for redemption. To the extent that Securities are
sold, the size and diversity of the Trust will be reduced. Such sales
may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
Shares of Special Situations will be sold to meet redemptions of Units
before Treasury Obligations, although Treasury Obligations may be sold
if the Trust is assured of retaining a sufficient principal amount of
Treasury Obligations to provide funds upon maturity of the Trust at
least equal to $10.00 per Unit.
The redemption price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the bid price of the
Treasury Obligations and the net asset value of the Special Situations
shares in the Trust, plus or minus cash, if any, in the Capital and
Income Accounts of the Trust. The Redemption Price per Unit is the pro
rata share of each Unit determined by the Trustee by adding: (1) the
cash on hand in the Trust other than cash deposited in the Trust to
purchase Securities not applied to the purchase of such Securities; (2)
the aggregate value of the Securities (including "when issued"
contracts, if any) held in the Trust, as determined by the Evaluator on
the basis of bid prices of the Treasury Obligations and the net asset
value of the Special Situations shares next computed; and (3) dividends
or other distributions receivable on Special Situations shares trading
ex-dividend as of the date of computation and amounts accrued, if any,
for rebated Rule 12b-1 fees; and deducting therefrom: (1) amounts
representing any applicable taxes or governmental charges payable out of
the Trust; (2) an amount representing estimated accrued expenses of the
Trust, including but not limited to fees and expenses of the Trustee
(including legal and auditing fees), the Evaluator, the Supervisor and
counsel fees, if any; (3) cash held for distribution to Unit holders of
record of the Trust as of the business day prior to the evaluation being
made; and (4) other liabilities incurred by the Trust; and finally
dividing the results of such computation by the number of Units of the
Trust outstanding as of the date thereof.
The right of redemption may be suspended and payment postponed for any
period during which the NYSE is closed (other than for customary weekend
and holiday closings) or during which the SEC determines that trading on
the NYSE is restricted or any emergency exists, as a result of which
disposal or evaluation of the Securities is not reasonably practicable,
or for such other periods as the SEC may by order permit. Under certain
extreme circumstances, the Sponsor may apply to the SEC for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. The Trustee is not liable to any person in any way
for any loss or damage which may result from any such suspension or
postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he or she would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Securities be Removed from the Trust?
The portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
Page 20
(but need not) direct the Trustee to dispose of a Security in the
unlikely event that an issuer of a Security defaults in the payment of
dividends or interest or there exist certain other materially adverse
conditions described in the Indenture.
The Trustee may also sell Securities designated by the Sponsor, or if
not so directed, in its own discretion, for the purpose of redeeming
Units of the Trust tendered for redemption and the payment of expenses;
provided, however, that in the case of Securities sold to meet
redemption requests, Treasury Obligations may only be sold if the Trust
is assured of retaining a sufficient principal amount of Treasury
Obligations to provide funds upon maturity of the Trust at least equal
to $10.00 per Unit. Treasury Obligations may not be sold to meet Trust
expenses.
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 and
The First Trust GNMA. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (630) 241-4141. As of
December 31, 1995, the total partners' capital of Nike Securities L.P.
was $9,033,760 (audited). (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 The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286, 1-800-221-7668. The Bank of New York
is subject to supervision and examination by the Superintendent of Banks
of the State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law.
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 the 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 the 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 the 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.
Page 21
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Securities. In the event of the failure of the
Sponsor to act under the Indenture, the Trustee may act thereunder and
shall not be liable for any action taken by it in good faith under the
Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of 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
SEC, or (b) terminate the Indenture and liquidate the Trust as provided
herein, or (c) continue to act as Trustee without terminating the
Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor and the Trustee,
in which event the Sponsor and the Trustee are to use their best efforts
to appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the
Evaluator may apply to a court of competent jurisdiction for the
appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture Be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Treasury Obligations
held in the Trust but in no event beyond the Mandatory Termination Date
indicated under "Summary of Essential Information" in Part One. The
Trust may be liquidated at any time by consent of 100% of the Unit
holders of the Trust or by the Trustee in the event that Units of the
Trust not yet sold aggregating more than 60% of the Units of the Trust
are tendered for redemption by the Underwriter, including the Sponsor.
If the Trust is liquidated because of the redemption of unsold Units of
the Trust by the Underwriter, the Sponsor will refund to each purchaser
of Units of the Trust the entire sales charge paid by such purchaser. In
the event of termination, written notice thereof will be sent by the
Trustee to all Unit holders of the Trust. Within a reasonable period
after termination, the Trustee will follow the procedures set forth
under "How are Income and Principal Distributed?"
Page 22
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West
Monroe Street, Chicago, Illinois 60603, as counsel for the Sponsor.
Tanner Propp & Farber will act as counsel for the Trustee and as special
New York tax counsel for the Trust.
Experts
The financial statements of the Trust appearing in Part One of this
Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein and in the Registration Statement, and are
included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
Page 23
CONTENTS:
First Investors Special Situations Growth
& Treasury Securities Trust
What is First Investors Special Situations Growth
& Treasury Securities Trust? 3
What are the Expenses and Charges? 3
What is the Federal Tax Status of Unit Holders? 4
Why are Investments in the Trust Suitable for
Retirement Plans? 7
Portfolio:
What are Treasury Obligations? 7
What is First Investors Special Situations Series? 8
What is Special Situations' Investment Objective
and Policies? 10
Description of Certain Securities, Other
Investment Policies and Risk Factors 11
Who is the Management of Special Situations? 12
What are Some Additional Considerations
for Investors? 15
Public Offering:
How is the Public Offering Price Determined? 15
How are Units Distributed? 16
What are the Sponsor's Profits? 17
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 17
How are Income and Capital Distributed? 18
How Can Distributions to Unit Holders
be Reinvested? 18
What Reports Will Unit Holders Receive? 19
How May Units be Redeemed? 19
How May Units be Purchased by the Sponsor? 20
How May Securities be Removed from the Trust? 20
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 21
Who is the Trustee? 21
Limitations on Liabilities of Sponsor and Trustee22
Who is the Evaluator? 22
Other Information:
How May the Indenture Be Amended or Terminated? 22
Legal Opinions 23
Experts 23
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (REGISTERED TRADEMARK)
First Investors
Special Situations
Growth & Treasury
Securities Trust
Prospectus
Part Two
September 27, 1996
First Trust (registered trademark)
1001 Warrenville Road
Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Bank of New York
101 Barclay Street
New York, New York 10286
1-800-221-7668
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE
PLEASE RETAIN BOTH PARTS OF PROSPECTUS
FOR FUTURE REFERENCE
Page 24
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, First Investors Special Situations Growth and
Treasury Securities Trust, Series 1, certifies that it meets all
of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Post-Effective Amendment of its
Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the Village of Lisle and
State of Illinois on September 30, 1996.
FIRST INVESTORS SPECIAL SITUATIONS GROWTH
AND TREASURY SECURITIES TRUST, SERIES 1
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title Date
Robert D. Van Kampen Sole Director of )
Nike Securities )
Corporation, ) September 30, 1996
the General Partner )
of Nike Securities L.P. )
)
)Robert M.Porcellino
) Attorney-in-Fact**
*The title of the person named herein represents his capacity in
and relationship to Nike Securities L.P., Depositor.
**An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Special Situations Trust, Series 18 (File No. 33-42683) and
the same is hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated August 30, 1996 in
this Post-Effective Amendment to the Registration Statement and
related Prospectus of First Investors Special Situations Growth &
Treasury Securities Trust dated September 24, 1996.
ERNST & YOUNG LLP
Chicago, Illinois
September 23, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post Effective Amendment to form S-6 and is qualified in its entirety
by reference to such Post Effective Amendment to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 001
<NAME> FIRST INVESTORS G & T TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-START> JUN-01-1995
<PERIOD-END> MAY-31-1996
<INVESTMENTS-AT-COST> 11,313,358
<INVESTMENTS-AT-VALUE> 13,213,759
<RECEIVABLES> 0
<ASSETS-OTHER> 1,424
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,215,183
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,675
<TOTAL-LIABILITIES> 5,675
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,313,358
<SHARES-COMMON-STOCK> 1,135,000
<SHARES-COMMON-PRIOR> 1,135,000
<ACCUMULATED-NII-CURRENT> (4,251)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,900,401
<NET-ASSETS> 13,209,508
<DIVIDEND-INCOME> 260,065
<INTEREST-INCOME> 514,115
<OTHER-INCOME> 0
<EXPENSES-NET> 19,867
<NET-INVESTMENT-INCOME> 754,313
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 1,083,625
<NET-CHANGE-FROM-OPS> 1,837,938
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 237,930
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,600,008
<ACCUMULATED-NII-PRIOR> (6,519)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
