Registration No. 33-56483
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 110
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on December 21, 1994 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 110
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors; Statement of
Net Assets
* Inapplicable, answer negative or not required.
Ryan Beck
Banking Opportunity Trust, Series 1
The Trust. The First Trust Special Situations Trust, Series 110
(the "Trust") is a unit investment trust consisting of a portfolio
containing common stocks issued by financial institutions incorporated
or headquartered in the United States.
The objective of the Trust is to provide for potential capital
appreciation and increasing dividend income by investing the Trust's
portfolio in common stocks issued by financial institutions which
are incorporated or headquartered in the United States (the "Equity
Securities"). See "Schedule of Investments." The Trust has a mandatory
termination date ("Mandatory Termination Date" or "Trust Ending
Date") as set forth under "Summary of Essential Information."
There is, of course, no guarantee that the objective of the Trust
will be achieved. Each Unit of the Trust represents an undivided
fractional interest in all the Equity Securities deposited in
the Trust.
The Equity Securities deposited in the Trust's portfolio have
no fixed maturity date and the value of these underlying Equity
Securities will fluctuate with changes in the values of stocks
in general. See "Portfolio."
The Sponsor may, from time to time during a period of up to approximately
360 days after the Initial Date of Deposit, deposit additional
Equity Securities in the Trust. Such deposits of additional Equity
Securities will, therefore, be done in such a manner that the
original proportionate relationship amongst the individual issues
of the Equity Securities shall be maintained. Any deposit by the
Sponsor of additional Equity Securities will duplicate, as nearly
as is practicable, the original proportionate relationship established
on the Initial Date of Deposit, and not the actual proportionate
relationship on the subsequent date of deposit, since the actual
proportionate relationship may be different than the original
proportionate relationship. Any such difference may be due to
the sale, redemption or liquidation of any Equity Securities deposited
in the Trust on the Initial, or any subsequent, Date of Deposit.
See "What is the First Trust Special Situations Trust?" and "How
May Equity Securities be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the
Trust during the initial offering period is equal to the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the ask prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust, plus a maximum sales charge
of 4.75% (equivalent to 4.987% of the net amount invested). A
pro rata share of accumulated dividends, if any, in the Income
Account is included in the Public Offering Price. The secondary
market Public Offering Price per Unit will be based upon the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust plus a maximum sales charge of
4.75% (equivalent to 4.987% of the net amount invested) subject
to reduction beginning January 1, 1996. The minimum purchase is
$5,000 ($2,000 for IRAs and other retirement plans). The sales
charge is reduced on a graduated scale for sales involving at
least 10,000 Units. See "How is the Public Offering Price Determined?"
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.
Ryan, Beck & Co.
The date of this Prospectus is December 21, 1994
Page 1
Estimated Net Annual Distributions. The estimated net annual dividend
distributions to Unit holders (based on the most recent quarterly
dividend declared with respect to the Equity Securities in the
Trust) on the Initial Date of Deposit for the Banking Opportunity
Trust, Series 1 was $.2205 per Unit. The actual net annual dividend
distributions per Unit will vary with changes in fees and expenses
of the Trust, with changes in dividends received and with the
sale or liquidation of Equity Securities; therefore, there is
no assurance that the net annual dividend distributions will be
realized in the future.
Dividend and Capital Distributions. Distributions of dividends
and capital, if any, received by the Trust, net of expenses of
the Trust, will be paid quarterly on the Distribution Date to
Unit holders of record on the Record Date as set forth in the
"Summary of Essential Information." Distributions of funds in
the Capital Account, if any, will be made at least annually in
December of each year. Any distribution of income and/or capital
will be net of the expenses of the Trust. See "What is the Federal
Tax Status of Unit Holders?" Additionally, upon termination of
the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his pro rata share of the
Trust's assets, less expenses, in the manner set forth under "Rights
of Unit Holders-How are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor and the Underwriter
intend to maintain a market for Units of the Trust and offer to
repurchase such Units at prices which are based on the aggregate
underlying value of Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus cash, if any, in the Capital and Income Accounts
of the Trust. If a secondary market is maintained during the initial
offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the
Equity Securities in the Trust (generally determined by the closing
sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. If a
secondary market is not maintained, a Unit holder may redeem Units
through redemption at prices based upon the aggregate underlying
value of the Equity Securities in the Trust (generally determined
by the closing sale prices of listed Equity Securities and the
bid prices of over-the-counter traded Equity Securities) plus
or minus a pro rata share of cash, if any, in the Capital and
Income Accounts of the Trust. A Unit holder tendering 2,500 Units
or more for redemption may request a distribution of shares of
Equity Securities (reduced by customary transfer and registration
charges) in lieu of payment in cash. See "How May Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination
of the Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of the Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by
the Trustee. At least 60 days prior to the Mandatory Termination
Date of the Trust, the Trustee will provide written notice thereof
to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges)
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. To be effective, the election form, together
with surrendered certificates and other documentation required
by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date of the Trust.
Unit holders not electing a distribution of shares of Equity Securities
will receive a cash distribution within a reasonable time after
the Trust is terminated. See "Rights of Unit Holders-How are Income
and Capital Distributed?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among
other factors, the possible deterioration of either the financial
condition of the issuers or the general condition of the stock
market, volatile interest rates, economic recession and potential
increased regulation on banks. The Trust is not actively managed
and Equity Securities will not be sold by the Trust to take advantage
of market fluctuations or changes in anticipated rates of appreciation.
See "What are Equity Securities?-Risk Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-December 21, 1994
Underwriter: Ryan, Beck & Co.
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $ 476,209
Aggregate Offering Price Evaluation of Equity
Securities per Unit $ 9.5242
Sales Charge of 4.75% of the Public Offering Price per Unit
(4.987% of the net amount invested) $ .4749
Public Offering Price per Unit (2) $ 9.9991
Sponsor's Initial Repurchase Price per Unit $ 9.5242
Redemption Price per Unit (based on aggregate
underlying value of Equity Securities) (3) $ 9.5242
</TABLE>
CUSIP Number 33734W 699
First Settlement Date December 29, 1994
Mandatory Termination Date January 15, 1999
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than the lower of $2,000,000 or
20% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $0.0090 per Unit outstanding.
Evaluator's Annual Fee $0.0030 per Unit outstanding,
payable to an affiliate of the Sponsor.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading (4:00
p.m. Eastern time) on the New York
Stock Exchange on each day on which
it is open.
Supervisory Fee (4) Maximum of $0.0025 per Unit out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date Fifteenth day of each March,
June, September and December commencing
March 15, 1995.
Income Distribution Date (5) Last day of each March, June,
September and December commencing
March 31, 1995.
[FN]
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. Eastern time and sold to investors
at a Public Offering Price per Unit based on this valuation.
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0010 per Unit.
(5) Distributions from the Capital Account will be made monthly
payable on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 3
Ryan Beck Banking Opportunity Trust
Series 1
The First Trust Special Situations Trust, Series 110
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 110 is one of
a series of investment companies created by the Sponsor under
the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated
by a different series number (the "Trust"). This Series consists
of an underlying separate unit investment trust designated as:
Banking Opportunity Trust, Series 1. The Trust was created under
the laws of the State of New York pursuant to a Trust Agreement
(the "Indenture"), dated the Initial Date of Deposit, with Nike
Securities L.P., as Sponsor, United States Trust Company of New
York, as Trustee, and First Trust Advisors L.P., as Portfolio
Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the
Trustee confirmations of contracts for the purchase of common
stocks issued by financial institutions together with an irrevocable
letter or letters of credit of a financial institution in an amount
at least equal to the purchase price of such securities. In exchange
for the deposit of securities or contracts to purchase securities
in the Trust, the Trustee delivered to the Sponsor documents evidencing
the entire ownership of the Trust.
The objective of the Trust is to provide for potential capital
appreciation and increasing dividend income through an investment
in equity securities issued by banking and thrift companies incorporated
or headquartered in the United States (the "Equity Securities").
In the Underwriter's opinion, the financial institution stocks
selected for deposit in the Trust have the potential to achieve
above average capital appreciation over the life of the Trust
due to the strong or improving fundamental characteristics of
the issuing companies. The Underwriter believes that each stock
selected for the portfolio is attractively valued based on its
price and earnings outlook, as well as having the potential to
benefit from possible full conversion in the case of mutual holding
companies and from ongoing consolidation activity marking the
bank and thrift industry. The Underwriter further believes that
many of the financial institutions chosen for the portfolio are
in a position to be acquired by larger institutions or to acquire
existing institutions themselves. There is, of course, no guarantee
that the objective of the Trust will be achieved.
With the deposit of the Equity Securities on the Initial Date
of Deposit, the Sponsor established a percentage relationship
between the amounts of Equity Securities in the Trust's portfolio.
From time to time following the Initial Date of Deposit, the Sponsor,
pursuant to the Indenture, may deposit additional Equity Securities
in the Trust and Units may be continuously offered for sale to
the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any
deposit by the Sponsor of additional Equity Securities will duplicate,
as nearly as is practicable, the original proportionate relationship
and not the actual proportionate relationship on the subsequent
date of deposit, since the actual proportionate relationship may
be different than the original proportionate relationship. Any
such difference may be due to the sale, redemption or liquidation
of any of the Equity Securities deposited in the Trust on the
Initial, or any subsequent, Date of Deposit. See "How May Equity
Securities be Removed from the Trust?" The original percentage
relationship of each Equity Security to the Trust is set forth
herein under "Schedule of Investments." Since the prices of the
underlying Equity Securities will fluctuate daily, the ratio,
on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as
a result of the deposit of additional Equity Securities in the
Trust.
On the Initial Date of Deposit, each Unit of the Trust represented
the undivided fractional interest in the Equity Securities deposited
in the Trust set forth under "Summary of Essential Information."
To the extent that Units of the Trust are redeemed, the aggregate
value of the Equity Securities in the Trust will be reduced and
the undivided fractional interest represented by each outstanding
Unit of the Trust will increase. However, if additional Units
are issued by the Trust in connection with the deposit of additional
Equity Securities by the Sponsor, the aggregate value of the Equity
Securities in the Trust will be increased by amounts allocable
to additional Units, and the fractional undivided interest represented
by each Unit of the Trust
Page 4
will be decreased proportionately. See "How May Units be Redeemed?"
The Trust has a Mandatory Termination Date as set forth herein
under "Summary of Essential Information."
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses
and other out-of-pocket expenses. With the exception of bookkeeping
and other administrative services provided to the Trust, for which
the Sponsor will be reimbursed in amounts as set forth under "Summary
of Essential Information," the Sponsor will not receive any fees
in connection with its activities relating to the Trust. Such
bookkeeping and administrative charges 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 fees payable to the Sponsor for such services may
exceed the actual costs of providing such services for this Trust,
but at no time will the total amount received for such services
rendered to unit investment trusts of which Nike Securities L.P.
is the Sponsor in any calendar year exceed the aggregate cost
to the Sponsor of supplying such services in such year. First
Trust Advisors L.P., an affiliate of the Sponsor, will receive
an annual supervisory fee, which is not to exceed the amount set
forth under "Summary of Essential Information," for providing
portfolio supervisory services for the Trust. Such fee is based
on the number of Units outstanding in the Trust on January 1 of
each year except for the year or years in which an initial offering
period occurs in which case the fee for a month is based on the
number of Units outstanding at the end of such month. The fee
may exceed the actual costs of providing such supervisory services
for this Trust, but at no time will the total amount received
for portfolio supervisory services rendered to unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar
year exceed the aggregate cost to First Trust Advisors L.P. of
supplying such services in such year. See "Underwriting."
Subsequent to the initial offering period, the Evaluator, an affiliate
of the Sponsor, will receive a fee as indicated in the "Summary
of Essential Information." The fee may exceed the actual costs
of providing such evaluation services for the Trust, but at no
time will the total amount received for evaluation services rendered
to unit investment trusts of which Nike Securities L.P. is the
Sponsor in any calendar year exceed the aggregate cost to First
Trust Advisors L.P. of supplying such services in such year. The
Trustee pays certain expenses of the Trust for which it is reimbursed
by the Trust. The Trustee will receive for its ordinary recurring
services to the Trust an annual fee computed at $0.0090 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."
The Trustee's and Evaluator's fees are payable from the Income
Account of the Trust to the extent funds are available and then
from the Capital Account of the Trust. Since the Trustee has the
use of the funds being held in the Capital and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
The following additional charges are or may be incurred by the
Trust: all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the Unit
holders; fees of the Trustee for any extraordinary services performed
under the Indenture; indemnification of the Trustee for any loss,
liability or expense incurred by it without negligence, bad faith
or willful misconduct on its part, arising out of or in connection
with its acceptance or administration of the Trust; indemnification
of the Sponsor for any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct in acting as
Depositor of the Trust; all taxes and other government charges
imposed
Page 5
upon the Securities or any part of the Trust (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee,
when paid or owing to the Trustee, are secured by a lien on the
Trust. In addition, the Trustee is empowered to sell Equity Securities
in the Trust in order to make funds available to pay all these
amounts if funds are not otherwise available in the Income and
Capital Accounts of the Trust. Since the Equity Securities are
all common stocks and the income stream produced by dividend payments
is unpredictable, the Sponsor cannot provide any assurance that
dividends will be sufficient to meet any or all expenses of the
Trust. As described above, if dividends are insufficient to cover
expenses, it is likely that Equity Securities will have to be
sold to meet Trust expenses. These sales may result in capital
gains or losses to Unit holders. See "What is the Federal Tax
Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the Units, the Sponsor is required to bear the cost of such
annual audits to the extent such cost exceeds $0.0050 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 (the "Code"). Unit holders should consult their tax advisers
in determining the Federal, state, local and any other tax consequences
of the purchase, ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of the Trust
under the Code; and the income of the Trust will be treated as
income of the Unit holders thereof under the Code. Each Unit holder
will be considered to have received his pro rata share of the
income derived from each Equity Security when such income is received
by the Trust.
2. Each Unit holder will have a taxable event when the Trust
disposes of an Equity Security (whether by sale, exchange, redemption,
or otherwise) or upon the sale or redemption of Units by such
Unit holder. The price a Unit holder pays for his Units, including
sales charges, is allocated among his pro rata portion of each
Equity Security held by the Trust (in proportion to the fair market
values thereof on the date the Unit holder purchases his Units)
in order to determine his initial cost for his pro rata portion
of each Equity Security held by the Trust. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with
respect to an Equity Security held by the Trust is taxable as
ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unit holder's pro rata portion
of dividends paid on such Equity Security which exceed such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such Equity
Security shall generally be treated as capital gain. In general,
any such capital gain will be short-term unless a Unit holder
has held his Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held
by the Trust will generally be considered a capital gain except
in the case of a dealer or a financial institution and will be
long-term if the Unit holder has held his Units for more than
one year (the date on which the Units are acquired (i.e., the
trade date) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unit holder's
portion of loss, if any, upon the sale or redemption of Units
or the disposition of Equity Securities held by the Trust will
generally be considered a capital loss except in the case of a
dealer or a financial institution and, in general, will be long-term
if the Unit holder has held his Units for more than one year.
Unit holders
Page 6
should consult their tax advisers regarding the recognition of
such capital gains and losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by the
Trust, including fees of the Trustee and the Evaluator.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by the Trust (to the extent such dividends are taxable as ordinary
income, as discussed above) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other
than corporate Unit holders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics
and other than for purposes of special taxes such as the accumulated
earnings tax and the personal holding corporation tax). However,
a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Proposed regulations have been issued which address
special rules that must be considered in determining whether the
46 day holding requirement is met. Moreover, the allowable percentage
of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends
received deduction.
Recognition of Taxable Gain or Loss Upon Disposition of Securities
by the Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when an Equity Security
is disposed of by the Trust or if the Unit holder disposes of
a Unit. For taxpayers other than corporations, net capital gains
are subject to a maximum stated marginal tax rate of 28%. However,
it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences
at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Tax Act, the Tax Act includes a provision
that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993.
Unit holders and prospective investors should consult with their
tax advisers regarding the potential effect of this provision
on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Redemption
of Units or Termination of the Trust. As discussed in "Rights
of Unit Holders-How are Income and Capital Distributed?", under
certain circumstances a Unit holder who owns at least 2,500 Units
may request an In-Kind Distribution upon the redemption of Units
or the termination of the Trust. The Unit holder requesting an
In-Kind Distribution will be liable for expenses related thereto
(the "Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See
"Rights of Unit Holders-How are Income and Capital Distributed?"
As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unit holder is considered as owning
a pro rata portion of each of the Trust assets for Federal income
tax purposes. The receipt of an In-Kind Distribution upon the
redemption of Units or the termination of the Trust would be deemed
an exchange of such Unit holder's pro rata portion of each of
the shares of stock and other assets held by the Trust in exchange
for an undivided interest in whole shares of stock plus, possibly,
cash.
There are generally three different potential tax consequences
which may occur under an In-Kind Distribution with respect to
each Equity Security owned by the Trust. An "Equity Security"
for this purpose is a particular class of stock issued by a particular
corporation. If the Unit holder receives only whole shares of
an Equity Security in exchange for his or her pro rata portion
in each share of such security held by the Trust, there
Page 7
is no taxable gain or loss recognized upon such deemed exchange
pursuant to Section 1036 of the Code. If the Unit holder receives
whole shares of a particular Equity Security plus cash in lieu
of a fractional share of such Equity Security, and if the fair
market value of the Unit holder's pro rata portion of the shares
of such Equity Security exceeds his tax basis in his pro rata
portion of such Equity Security, taxable gain would be recognized
in an amount not to exceed the amount of such cash received, pursuant
to Section 1031(b) of the Code. No taxable loss would be recognized
upon such an exchange pursuant to Section 1031(c) of the Code,
whether or not cash is received in lieu of a fractional share.
Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unit holder's
tax basis in the shares of such particular Equity Security which
he receives as part of the In-Kind Distribution. Finally, if a
Unit holder's pro rata interest in an Equity Security does not
equal a whole share, he may receive entirely cash in exchange
for his pro rata portion of a particular Equity Security. In such
case, taxable gain or loss is measured by comparing the amount
of cash received by the Unit holder with his tax basis in such
Equity Security.
Because the Trust will own many Equity Securities, a Unit holder
who requests an In-Kind Distribution will have to analyze the
tax consequences with respect to each Equity Security owned by
the Trust. In analyzing the tax consequences with respect to each
Equity Security, such Unit holder must allocate the Distribution
Expenses among the Equity Securities (the "Allocable Expenses").
The Allocable Expenses will reduce the amount realized with respect
to each Equity Security so that the fair market value of the shares
of such Equity Security received (if any) and cash received in
lieu thereof (as a result of any fractional shares) by such Unit
holder should equal the amount realized for purposes of determining
the applicable tax consequences in connection with an In-Kind
Distribution. A Unit holder's tax basis in shares of such Equity
Security received will be increased by the Allocable Expenses
relating to such Equity Security. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum
of the gain (or loss) recognized under the rules described above
by such Unit holder with respect to each Equity Security owned
by the Trust. Unit holders who request an In-Kind Distribution
are advised to consult their tax advisers in this regard.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Trust to
such Unit holder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions
by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States
persons. Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of income
dividends includable in the Unit holder's gross income and amounts
of Trust expenses which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject
to state and local taxes. Investors should consult their tax advisers
for specific information on the tax consequences of particular
types of distributions.
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trust for New York tax matters, under the existing income
tax laws of the State of New York, the Trust is not an association
taxable as a corporation and the income of the Trust will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for
Page 8
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific
tax laws related thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance
of any such plan. Such plans are offered by brokerage firms and
other financial institutions. Fees and charges with respect to
such plans may vary.
PORTFOLIO
What are Equity Securities?
The Trust consists of different issues of Equity Securities issued
by financial institutions and are listed on a national securities
exchange or the NASDAQ National Market System or traded in the
over-the-counter market. Each of the companies whose Equity Securities
are included in the portfolio were selected based upon, but not
limited to, asset quality, earnings momentum, low valuations,
franchise strength, potential acquisition value and sound balance
sheets. See "What are the Equity Securities Selected for Banking
Opportunity Trust, Series 1?" for a general description of the
companies.
Risk Factors. An investment in Units of the Trust should be made
with an understanding of the problems and risks inherent in the
financial institutions industry in general. Banks, thrifts and
their holding companies are especially subject to the adverse
effects of economic recession, volatile interest rates, portfolio
concentrations in geographic markets and in commercial and residential
real estate loans, and competition from new entrants in their
fields of business. Banks and thrifts are highly dependent on
net interest income. Recent profits have benefitted from the relatively
high yield on earning assets and relatively low cost of funds.
There is no certainty that such conditions will continue, especially
in a rising interest rate environment. Commercial loan demand
for banks has been weak and an increasing number of commercial
loans have been securitized-a potential adverse affect on the
market share of the commercial banking system. Bank and thrift
institutions have received significant consumer mortgage fee income
as a result of recent activity in mortgage and refinance markets.
As initial home purchasing and refinancing activity subsides,
this income is expected to diminish to a lower level. Economic
conditions in the real estate markets, which have been weak in
the recent past, can have a substantial effect upon banks and
thrifts because they generally have a portion of their assets
invested in loans secured by real estate, as has recently been
the case for a number of banks and thrifts with respect to commercial
real estate in the northeastern and southwestern regions of the
United States. Banks, thrifts and their holding companies are
subject to extensive federal regulation and, when such institutions
are state-chartered, to state regulation as well. Such regulations
impose strict capital requirements and limitations on the nature
and extent of business activities that banks and thrifts may pursue.
Furthermore, bank regulators have a wide range of discretion in
connection with their supervisory and enforcement authority and
may substantially restrict the permissible activities of a particular
institution if deemed to pose significant risks to the soundness
of such institution or the safety of the federal deposit insurance
fund. Regulatory actions, such as increases in the minimum capital
requirements applicable to banks and thrifts and increases in
deposit insurance premiums required to be paid by banks and thrifts
to the Federal Deposit Insurance Corporation ("FDIC"), can negatively
impact earnings and the ability of a company to pay dividends.
Neither federal insurance of deposits nor governmental regulations,
however, insures the solvency or profitability of banks or their
holding companies, or insures against any risk of investment in
the securities issued by such institutions.
The statutory requirements applicable to and regulatory supervision
of banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions
Reform, Recovery and Enforcement Act; enacted in August 1989,
the Federal Deposit Insurance Corporation Improvement Act of 1991,
the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991 and the regulations promulgated under
these laws. Many of the regulations promulgated pursuant to these
laws have only recently been finalized and their impact on the
business, financial condition and prospects of the Equity Securities
in the Trust's portfolio cannot be predicted with certainty. Periodic
efforts by recent Administrations to introduce legislation broadening
the ability of banks to compete with new products have not been
successful, but if enacted could lead to more failures as a result
of increased competition and added risks. Failure to enact such
legislation, on the other hand, may lead to declining earnings
and an inability
Page 9
to compete with unregulated financial institutions. Efforts to
expand the ability of federal thrifts to branch on an interstate
basis have been initially successful through promulgation of regulations,
and legislation to liberalize interstate banking has recently
been signed into law. Under the legislation, banks will be able
to purchase or establish subsidiary banks in any state, one year
after the legislation's enactment. Starting in mid-1997, banks
would be allowed to turn existing banks into branches, though
states could pass laws to permit interstate branch banking before
then. Consolidation is likely to continue in both cases. The Securities
and Exchange Commission and the Financial Accounting Standards
Board require the expanded use of market value accounting by banks
and have imposed rules requiring market accounting for investment
securities held in trading accounts or available for sale. Adoption
of additional such rules may result in increased volatility in
the reported health of the industry, and mandated regulatory intervention
to correct such problems. In late 1993 the United States Treasury
Department proposed a restructuring of the banks regulatory agencies
which, if implemented, may adversely affect certain of the Equity
Securities in the Trust's portfolio. Additional legislative and
regulatory changes may be forthcoming. For example, the bank regulatory
authorities have proposed substantial changes to the Community
Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such
changes would have on the Equity Securities in the Trust's portfolio.
In addition, from time to time the deposit insurance system is
reviewed by Congress and federal regulators, and proposed reforms
of that system could, among other things, further restrict the
ways in which deposited moneys can be used by banks or reduce
the dollar amount or number of deposits insured for any depositor.
Such reforms could reduce profitability as investment opportunities
available to bank institutions become more limited and as consumers
look for savings vehicles other than bank deposits. Banks and
thrifts face significant competition from other financial institutions
such as mutual funds, credit unions, mortgage banking companies
and insurance companies, and increased competition may result
from legislative broadening of regional and national interstate
banking powers as has been recently enacted. Among other benefits,
the legislation allows banks and bank holding companies to acquire
across previously prohibited state lines and to consolidate their
various bank subsidiaries into one unit. The Sponsor makes no
prediction as to what, if any, manner of bank and thrift regulatory
actions might ultimately be adopted or what ultimate effect such
actions might have on the Trust's portfolio.
The Federal Bank Holding Company Act of 1956 generally prohibits
a bank holding company from (1) acquiring, directly or indirectly,
more than 5% of the outstanding shares of any class of voting
securities of a bank or bank holding company, (2) acquiring control
of a bank or another bank holding company, (3) acquiring all or
substantially all the assets of a bank, or (4) merging or consolidating
with another bank holding company, without first obtaining Federal
Reserve Board ("FRB") approval. In considering an application
with respect to any such transaction, the FRB is required to consider
a variety of factors, including the potential anti-competitive
effects of the transaction, the financial condition and future
prospects of the combining and resulting institutions, the managerial
resources of the resulting institution, the convenience and needs
of the communities the combined organization would serve, the
record of performance of each combining organization under the
Community Reinvestment Act and the Equal Credit Opportunity Act,
and the prospective availability to the FRB of information appropriate
to determine ongoing regulatory compliance with applicable banking
laws. In addition, the federal Change In Bank Control Act and
various state laws impose limitations on the ability of one or
more individuals or other entities to acquire control of banks
or bank holding companies.
The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which
could only be funded in ways that would weaken its financial health,
such as by borrowing. The FRB also may impose limitations on the
payment of dividends as a condition to its approval of certain
applications, including applications for approval of mergers and
acquisitions. The Sponsor makes no prediction as to the effect,
if any, such laws will have on the Equity Securities or whether
such approvals, if necessary, will be obtained.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time
to time in the Trust and any additional Equity Securities acquired
and held by the
Page 10
Trust pursuant to the provisions of the Trust Agreement together
with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Equity Securities. However, should any contract
for the purchase of any of the Equity Securities initially deposited
hereunder fail, the Sponsor will, unless substantially all of
the moneys held in the Trust to cover such purchase are reinvested
in substitute Equity Securities in accordance with the Trust Agreement,
refund the cash and sales charge attributable to such failed contract
to all Unit holders on the next distribution date.
Because certain of the Equity Securities from time to time may
be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders
and will not be reinvested, no assurance can be given that the
Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor
may instruct the Trustee to sell Equity Securities under certain
limited circumstances. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired
in connection with a merger or other transaction. If offered such
new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by the Trust, they may be accepted for deposit
in the Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities
be Removed from the Trust?" Equity Securities, however, will not
be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national
securities exchange, the principal trading market for the Equity
Securities may be in the over-the-counter market. As a result,
the existence of a liquid trading market for the Equity Securities
may depend on whether dealers will make a market in the Equity
Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of the
Trust, will be adversely affected if trading markets for the Equity
Securities are limited or absent.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the
same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. The value of common stocks
is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of
the Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Page 11
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in the Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
The Underwriter has acquired or will acquire the Equity Securities
for the Sponsor and thereby may benefit. The Underwriter in its
general securities business acts as agent or principal in connection
with the purchase and sale of equity securities, including the
Equity Securities in the Trust, and may act as a market maker
in certain of the Equity Securities. The Underwriter also from
time to time may issue reports on and make recommendations relating
to equity securities, which may include the Equity Securities.
The Underwriter has performed investment banking services for
certain of the issuers of the Equity Securities.
What are the Equity Securities Selected for Banking Opportunity
Trust, Series 1?
Banks
________
BancorpSouth, Inc., headquartered in Tupelo, Mississippi, is a
bank holding company for the Bank of Mississippi and Volunteer
Bank. The Bank of Mississippi provides general commercial banking
and trust services throughout the State of Mississippi. Volunteer
Bank offers its services through offices in west Tennessee. BancorpSouth,
Inc. also offers consumer finance and credit life insurance.
Evergreen Bancorp, Inc., headquartered in Glens Falls, New York,
is a bank holding company for Evergreen, N.A. The bank operates offices
in the Capital Region of New York as well as Clinton, Warren and
Washington counties.
First Commerce Corporation is a multibank holding company which
provides commercial banking and financial services through its
subsidiaries in Louisiana. The company's banks offer individual,
commercial, financial, agricultural, real estate, credit card
and other loans. The company is headquartered in New Orleans,
Louisiana. Its subsidiaries serve Louisiana and southern Mississippi
through branch offices.
NBT Bancorp, Inc., headquartered in Norwich, New York, is a bank
holding company for The National Bank and Trust Company which
serves central and northern New York. The bank's services include
demand and time deposits, mortgage, consumer, commercial and agricultural
loans and trust services.
Summit Bancorporation, through its banking subsidiaries, provides
corporate, consumer and private banking services, as well as trust
and investment services. Summit Bancorporation is headquartered
in Chatham, New Jersey, and serves customers throughout northern and
central New Jersey.
Susquehanna Bancshares, Inc. is a bank holding company whose subsidiary
banks attract deposits and offer loans. Susquehanna Bancshares,
Inc. is headquartered in Lititz, Pennsylvania, and serves central
and south central Pennsylvania and Maryland.
UJB Financial Corporation is a bank holding company whose subsidiary
banks attract deposits and offer real estate, commercial and installment
loans. The company's subsidiaries offer trust, discount brokerage,
commercial finance and credit life insurance services. UJB Financial
Corporation is headquartered in Princeton, New Jersey, and serves
customers in New Jersey and eastern Pennsylvania.
Union Planters Corporation is a bank holding company headquartered
in Memphis, Tennessee, with banking and broker/dealer services.
The company conducts its operations through banking affiliates
located in Alabama, Arkansas, Kentucky, Mississippi, and Tennessee.
Union Planters National Bank, a provider of commercial bankings
services in Tennessee, is the company's largest subsidiary.
USBANCORP, Inc. is a bank holding company whose subsidiaries include
the US National Bank of Johnstown, Three Rivers Bank and Trust
Company, Community Bancorp, United Bancorp Life Insurance Company
and US Bancorp Trust Company. USBANCORP, Inc. is headquartered
in Johnstown, Pennsylvania,
Page 12
and its subsidiary banks provide general financial, life insurance
and trust services to customers located in the Johnstown and Pittsburgh
areas of Pennsylvania.
Thrifts
________
AMFED Financial, Inc., headquartered in Reno, Nevada, is the holding
company for American Federal Savings Bank, which conducts general
banking business throughout Reno and Las Vegas, Nevada. American
Federal Savings Bank also originates and purchases loans secured
by single-family and multi-family residential real estate.
Astoria Financial Corporation, headquartered in Lake Success,
New York, is a holding company for Astoria Federal Savings and
Loan Association. The bank attracts deposits from the general
public through its banking and mortgage origination offices. Astoria
Financial Corporation invests such deposits and other funds primarily
in loans secured by one- to four-family residential mortgage loans
and mortgage related securities insured by federal agencies.
Bay View Capital Corporation, headquartered in San Mateo, California,
serves the San Francisco Bay Area through its subsidiary Bay View
Federal Bank. The bank provides general banking services (mortgage
and consumer loans) for the general public from its banking offices
and loan production centers.
Centerbank, headquartered in Waterbury, Connecticut, owns and
operates branches in the greater Meriden, New Haven and Waterbury,
Connecticut, areas. Residential mortgages in Connecticut, Pennsylvania,
Georgia, South Carolina, New Jersey, New York and other states
are originated through its subsidiary, Mortgage Center, Inc. In addition,
equipment is leased through Center Capital Corporation in Connecticut.
Commonwealth Savings Bank, MHC is a mutual holding company which
provides banking services including residential mortgage loans, small
business loans and deposit-taking services. The bank is headquartered
in Valley Forge, Pennsylvania, and operates through full-service
branches serving customers in the Bucks, Delaware, Chester, Montgomery
and Philadelphia Counties of Pennsylvania.
D & N Financial Corporation, headquartered in Hancock, Michigan,
is a holding company for D & N Bank, FSB and operates full service
branch offices and savings agencies in central and northern Michigan.
In addition, the company conducts business through mortgage banking
offices located in Michigan and other states. D & N Financial
Corporation specializes in single-family residential mortgage lending.
GP Financial Corporation is headquartered in Flushing, New York,
and is the holding company for Green Point Savings Bank. The bank's
full-service branch offices attract deposits and also offer one-
to four-family mortgage loans in New York City, the boroughs of
Brooklyn and Queens and Nassau, Suffolk, Westchester and Rockland
Counties.
Home Financial Corporation is the holding company for Home Savings
Bank, FSB, headquartered in Hollywood, Florida. The bank serves
its customers through its branch offices in southern and central
Florida. The company attracts deposits and provides real estate
mortgage loans.
IBS Financial Corporation, headquartered in Cherry Hill, New Jersey,
is a savings and loan holding company. The company's principal
subsidiary is Inter-Boro Savings and Loan Association. The bank
operates full-service offices in New Jersey, serving Burlington,
Camden and Gloucester Counties.
Jefferson Savings Bancorp, Inc., headquartered in Ballwin, Missouri,
is the holding company for the Jefferson Savings and Loan Association.
The association provides general banking services to customers
in the St. Louis, Missouri area.
MLF Bancorp, Inc., headquartered in Villanova, Pennsylvania, is
the holding company for Main Line Federal Savings Bank which provides
general banking services in Chester, Delaware and Montgomery Counties
in Pennsylvania.
N.S. Bancorp, Inc., headquartered in Chicago, Illinois, is the
holding company for Northwestern Savings and Loan Association.
The savings and loan provides savings and checking accounts, various
commercial and consumer loans and other financial services. Northwestern
Savings and Loan Association operates several branches in Cook
County, Illinois.
Northwest Savings Bank, headquartered in Warren, Pennsylvania,
operates full-service offices throughout northwest, southwest
and central Pennsylvania. The bank has mortgage lending offices
that operate
Page 13
in eastern Pennsylvania, New York and South Carolina. Northwest
Savings Banks has a consumer finance office in New York in addition
to those throughout Pennsylvania.
People's Bank, MHC, headquartered in Bridgeport, Connecticut, is a
mutual holding company that provides a full line of banking services
to individuals and businesses throughout Connecticut. Through
its subsidiary, the bank offers credit cards, consumer and commercial
loans, corporate banking services and discount brokerage services.
Rochester Community Savings Bank, headquartered in Rochester,
New York, is a state-chartered savings bank serving the Rochester,
New York metropolitan area. Through its subsidiary, American Credit
Services, the bank is an active originator of auto loans.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life
of the Trust and may be more or less than the price at which they
were deposited in the Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Security. In the event of
a notice that any Equity Security will not be delivered ("Failed
Contract Obligations") to the Trust, the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other Equity
Securities ("Replacement Securities"). Any Replacement Security
will be identical to those which were the subject of the failed
contract. The Replacement Securities must be purchased within
20 days after delivery of the notice of a failed contract and
the purchase price may not exceed the amount of funds reserved
for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in
the event of a failed contract, the Sponsor will refund the sales
charge attributable to such Failed Contract Obligations to all
Unit holders of the Trust and the Trustee will distribute the
principal attributable to such Failed Contract Obligations not
more than 120 days after the date on which the Trustee received
a notice from the Sponsor that a Replacement Security would not
be deposited in the Trust. In addition, Unit holders should be
aware that, at the time of receipt of such principal, they may
not be able to reinvest such proceeds in other securities at a
yield equal to or in excess of the yield which such proceeds would
have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size
of the Trust and the number of Units thereof by the deposit of
additional Equity Securities in the Trust and the issuance of
a corresponding number of additional Units.
The Trust consists of the Equity Securities listed under "Schedule
of Investments" (or contracts to purchase such Securities) as
may continue to be held from time to time in the Trust and any
additional Equity Securities acquired and held by the Trust pursuant
to the provisions of the Indenture (including provisions with
respect to deposits into the Trust of Equity Securities in connection
with the issuance of additional Units).
Once all of the Equity Securities in the Trust are acquired, the
Trustee will have no power to vary the investments of the Trust,
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unit holder's investment, but
may dispose of Equity Securities only under limited circumstances.
See "How May Equity Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation
pending as of the Initial Date of Deposit in respect of any Equity
Security which might reasonably be expected to have a material
adverse effect on the Trust. At any time after the Initial Date
of Deposit, litigation may be instituted on a variety of grounds
with respect to the Equity Securities. The Sponsor is unable to
predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse
effect on the Trust.
Page 14
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust, plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust, plus a sales charge of 4.75% (equivalent to 4.987% of the
net amount invested) subject to reduction beginning January 1,
1996, divided by the amount of Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price
is based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding. For secondary market sales after the completion of
the initial offering period, the Public Offering Price is also
based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a maximum sales charge of 4.75% of
the Public Offering Price (equivalent to 4.987% of the net amount
invested) divided by the number of outstanding Units of the Trust.
The minimum purchase of the Trust is $5,000 ($2,000 for IRAs and
other retirement plans). The applicable sales charge for both
primary and secondary market sales is reduced by a discount as
indicated below for volume purchases:
<TABLE>
<CAPTION>
Number of Units Discount
_______________ ________
<S> <C>
10,000 to 24,999 0.50%
25,000 to 49,999 1.00%
50,000 or more 1.50%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling Underwriter or dealer. The reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one day from any one underwriter or dealer. Additionally,
Units purchased in the name of the spouse of a purchaser or in
the name of a child of such purchaser under 21 years of age will
be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced
sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the Underwriter or dealer of
any such combined purchase prior to the sale in order to obtain
the indicated discount. In addition, with respect to the employees,
officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law,
and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor and the Underwriter and their subsidiaries,
the sales charge is reduced by 2.0% of the Public Offering Price
for purchases of Units during the primary and secondary public
offering periods.
Had the Units of the Trust been available for sale on the business
day prior to the Initial Date of Deposit, the Public Offering
Price would have been as indicated in "Summary of Essential Information."
The Public Offering Price of Units on the date of the prospectus
or during the initial offering period may vary from the amount
stated under "Summary of Essential Information" in accordance
with fluctuations in the prices of the underlying Equity Securities.
During the initial offering period, the aggregate value of the
Units of the Trust shall be determined on the basis of the aggregate
underlying value of the Equity Securities therein plus or minus
cash, if any, in the Income and Capital Accounts of the Trust.
The aggregate underlying value of the Equity Securities will be
determined in the following manner: if the Equity Securities are
listed on a national securities exchange or the NASDAQ National
Market System, this evaluation is generally based on the closing
sale prices on that exchange or that system (unless it is determined
that these prices are inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system,
at the closing ask prices. If the Equity Securities are not so
listed or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based
on the current ask prices on the over-the-counter market (unless
it is determined that these prices are inappropriate as a basis
for evaluation). If current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of current
Page 15
ask prices for comparable securities, (b) by appraising the value
of the Equity Securities on the ask side of the market or (c)
by any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust plus the
applicable sales charge.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. A person
will become owner of the Units on the date of settlement provided
payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units
may be used in the Sponsor's business and may be deemed to be
a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934. Delivery of Certificates representing Units
so ordered will be made five business days following such order
or shortly thereafter. See "Rights of Unit Holders-How may Units
be Redeemed?" for information regarding the ability to redeem
Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Equity Securities are deposited by the
Sponsor, Units will be distributed to the public at the then current
Public Offering Price. The initial offering period may be up to
approximately 360 days. During such period, the Sponsor may deposit
additional Equity Securities in the Trust and create additional
Units. Units reacquired by the Sponsor during the initial offering
period (at prices based upon the aggregate underlying value of
the Equity Securities in the Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon
the termination of the initial offering period, unsold Units created
or reacquired during the initial offering period will be sold
or resold at the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Sales initially will be made to
dealers and others at prices which represent a concession or agency
commission of 2.9% of the Public Offering Price, and, for secondary
market sales, 2.9% of the Public Offering Price (or 65% of the
then current maximum sales charge after January 1, 1996). Effective
on each January 1, commencing January 1, 1996, such sales charge
will be reduced by 1/2 of 1% to a minimum sales charge of 3.25%.
However, resales of Units of the Trust by such dealers and others
to the public will be made at the Public Offering Price described
in the prospectus. The Sponsor reserves the right to change the
amount of the concession or agency commission from time to time.
Certain commercial banks may be making Units of the Trust available
to their customers on an agency basis. A portion of the sales
charge paid by these customers is retained by or remitted to the
banks in the amounts indicated in the fourth preceding sentence.
Under the Glass-Steagall Act, banks are prohibited from underwriting
Trust Units; however, the Glass-Steagall Act does permit certain
agency transactions and the banking regulators have not indicated
that these particular agency transactions are not permitted under
such Act. In Texas and in certain other states, any banks making
Units available must be registered as broker/dealers under state
law.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission
equal to 4.75% of the Public Offering Price of the Units (equivalent
to 4.987% of the net amount invested), less any reduced sales
charge for quantity purchases as described under "Public Offering-How
is the Public Offering Price Determined?" See "Underwriting" for
information regarding the receipt of the excess gross sales commissions
by the Sponsor from the Underwriter and additional concessions
available to Underwriters, dealers and others. In addition, the
Sponsor may be considered to have realized a profit or to have
sustained a loss, as the case may be, in the amount of any difference
between the cost of the Equity Securities to the Trust (which
is based on the Evaluator's determination of the aggregate offering
price of the underlying Equity Securities of such Trust on the
Initial Date of Deposit as well as subsequent deposits) and the
cost of such Equity Securities
Page 16
to the Sponsor. See "Underwriting" and Note (2) of "Schedule of
Investments." During the initial offering period, the Underwriter
also may realize profits or sustain losses as a result of fluctuations
after the Date of Deposit in the Public Offering Price received
by the Underwriter upon the sale of Units.
In maintaining a market for the Units, the Sponsor and Underwriter
will also realize profits or sustain losses in the amount of any
difference between the price at which Units are purchased and
the price at which Units are resold (which price includes a sales
charge of 4.75% subject to reduction beginning January 1, 1996)
or redeemed. The secondary market public offering price of Units
may be greater or less than the cost of such Units to the Sponsor
or the Underwriter.
Will There be a Secondary Market?
After the initial offering period, although they are not obligated
to do so, both the Sponsor and Underwriter intend to maintain
a market for the Units and continuously offer to purchase Units
at prices, subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee
in transferring and recording the ownership of Units, will be
borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases
of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE UNDERWRITER OR SPONSOR AS
TO CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION
TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the
Trustee. Ownership of Units may be evidenced by registered certificates
executed by the Trustee and the Sponsor. Delivery of certificates
representing Units ordered for purchase is normally made five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder
and will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance
or transfer of Units held in uncertificated form, the Trustee
will send to the registered owner of Units a written initial transaction
statement containing a description of the Trust; the number of
Units issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such
Page 17
expenses as the Trustee may incur. Mutilated certificates must
be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect
to any of the securities in the Trust on or about the Income Distribution
Dates to Unit holders of record on the preceding Income Record
Date. See "Summary of Essential Information." Persons who purchase
Units will commence receiving distributions only after such person
becomes a record owner. Notification to the Trustee of the transfer
of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
The pro rata share of cash in the Capital Account of the Trust
will be computed as of the fifteenth day of each month. Proceeds
received on the sale of any Equity Securities in the Trust, to
the extent not used to meet redemptions of Units or pay expenses,
will, however, be distributed on the last day of each month to
Unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $0.01 per Unit.
The Trustee is not required to pay interest on funds held in the
Capital Account of a Trust (but may itself earn interest thereon
and therefore benefit from the use of such funds). Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made on the last day of each December to Unit holders of record
as of December 15. See "What is the Federal Tax Status of Unit
Holders?"
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by the Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder only when filing a tax return. Under normal circumstances
the Trustee obtains the Unit holder's tax identification number
from the selling broker. However, a Unit holder should examine
his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should
be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive:
(i) the pro rata share of the amounts realized upon the disposition
of Equity Securities, unless he elects an In-Kind Distribution
as described below and (ii) a pro rata share of any other assets
of the Trust, less expenses of the Trust. Not less than 60 days
prior to the Mandatory Termination Date of the Trust, the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (an "In-Kind Distribution"),
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. An In-Kind Distribution will be reduced
by customary transfer and registration charges. To be effective,
the election form, together with surrendered certificates and
other documentation required by the Trustee, must be returned
to the Trustee at least five business days prior to the Mandatory
Termination Date of the Trust. A Unit holder may, of course, at
any time after the Equity Securities are distributed, sell all
or a portion of the shares.
The Trustee will credit to the Income Account of the Trust any
dividends received on the Equity Securities therein. All other
receipts (e.g. return of capital, etc.) are credited to the Capital
Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable
period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar
year was a Unit holder of the Trust the following information
in reasonable detail: (1) a summary of transactions in the Trust
for such year; (2) any
Page 18
Equity Securities sold during the year and the Equity Securities
held at the end of such year by the Trust; (3) the redemption
price per Unit based upon a computation thereof on the 31st day
of December of such year (or the last business day prior thereto);
and (4) amounts of income and capital distributed during such
year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed,
or in the case of uncertificated Units, delivery of a request
for redemption, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed as explained above (or by
providing satisfactory indemnity, as in connection with lost,
stolen or destroyed certificates), and payment of applicable governmental
charges, if any. No redemption fee will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive in cash an amount
for each Unit equal to the Redemption Price per Unit next computed
after receipt by the Trustee of such tender of Units. The "date
of tender" is deemed to be the date on which Units are received
by the Trustee, except that as regards Units received after 4:00
p.m. Eastern time, the date of tender is the next day on which
the New York Stock Exchange is open for trading and such Units
will be deemed to have been tendered to the Trustee on such day
for redemption at the redemption price computed on that day. Units
so redeemed shall be cancelled.
Any Unit holder tendering 2,500 Units or more for redemption may
request by written notice submitted at the time of tender from
the Trustee in lieu of a cash redemption a distribution of shares
of Equity Securities in an amount and value of Equity Securities
per Unit equal to the Redemption Price Per Unit as determined
as of the evaluation next following tender. To the extent possible,
in-kind distributions ("In-Kind Distributions") shall be made
by the Trustee through the distribution of each of the Equity
Securities in book-entry form to the account of the Unit holder's
bank or broker-dealer at the Depository Trust Company. An In-Kind
Distribution will be reduced by customary transfer and registration
charges. The tendering Unit holder will receive his pro rata number
of whole shares of each of the Equity Securities comprising the
portfolio and cash from the Capital Account equal to the fractional
shares to which the tendering Unit holder is entitled. The Trustee
may adjust the number of shares of any issue of Equity Securities
included in a Unit holder's In-Kind Distribution to facilitate
the distribution of whole shares, such adjustment to be made on
the basis of the value of Equity Securities on the date of tender.
If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unit holder, the Trustee
may sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number
in the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be recovered
by the Unit holder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder
elects to tender Units for redemption, such Unit holder should
make sure that the Trustee has been provided a certified tax identification
number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such
number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust
in order to make funds available for redemption. To the extent
that Equity Securities are sold, the size and diversity of the
Trust will be reduced. Such sales may be required at a time when
Equity Securities would not otherwise be sold and might result
in lower prices than might otherwise be realized.
Page 19
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
plus or minus cash, if any, in the Income and Capital Accounts
of the Trust. The Redemption Price per Unit is the pro rata share
of each Unit determined by the Trustee by adding: (1) the cash
on hand in the Trust other than cash deposited in the Trust to
purchase Equity Securities not applied to the purchase of such
Equity Securities; (2) the aggregate value of the Equity Securities
held in the Trust, as determined by the Evaluator on the basis
of the aggregate underlying value of the Equity Securities in
the Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation;
and deducting therefrom: (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust; (2) any
amounts owing to the Trustee for its advances; (3) an amount representing
estimated accrued expenses of the Trust, including but not limited
to fees and expenses of the Trustee (including legal and auditing
fees), the Evaluator and supervisory fees, if any; (4) cash held
for distribution to Unit holders of record of the Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results
of such computation by the number of Units of the Trust outstanding
as of the date thereof.
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing bid prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefor is other than
on the exchange, the evaluation shall generally be based on the
current bid prices on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor or Underwriter?
The Trustee shall notify the Sponsor or Underwriter of any tender
of Units for redemption. If the Sponsor's or Underwriter'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 or Underwriter may be tendered
to the Trustee for redemption as any other Units. In the event
the Sponsor or Underwriter does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor or Underwriter
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 or Underwriter.
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but
Page 20
need not) direct the Trustee to dispose of an Equity Security
in the event that an issuer defaults in the payment of a dividend
that has been declared, that any action or proceeding has been
instituted restraining the payment of dividends or there exists
any legal question or impediment affecting such Equity Security,
that the issuer of the Equity Security has breached a covenant
which would affect the payments of dividends, the credit standing
of the issuer or otherwise impair the sound investment character
of the Equity Security, that the issuer has defaulted on the payment
on any other of its outstanding obligations, that the price of
the Equity Security has declined to such an extent or other such
credit factors exist so that in the opinion of the Sponsor, the
retention of such Equity Securities would be detrimental to the
Trust. Except as stated under "Portfolio - What are Some Additional
Considerations for Investors?" for Failed Obligations, the acquisition
by the Trust of any securities or other property other than the
Equity Securities is prohibited. Pursuant to the Indenture and
with limited exceptions, the Trustee may sell any securities or
other property acquired in exchange for Equity Securities such
as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities
or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee
or held in the Trust pursuant to the direction of the Sponsor
(who may rely on the advice of the Portfolio Supervisor). Proceeds
from the sale of Equity Securities (or any securities or other
property received by the Trust in exchange for Equity Securities)
by the Trustee are credited to the Capital Account of the Trust
for distribution to Unit holders or to meet redemptions.
The Trustee may also sell Equity Securities designated by the
Sponsor, or if not so directed, in its own discretion, for the
purpose of redeeming Units of the Trust tendered for redemption
and the payment of expenses.
The Sponsor, in designating Equity Securities to be sold by the
Trustee, will generally make selections in order to maintain,
to the extent practicable, the proportionate relationship among
the number of shares of individual issues of Equity Securities.
To the extent this is not practicable, the composition and diversity
of the Equity Securities may be altered. In order to obtain the
best price for the Trust, it may be necessary for the Sponsor
to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
Ryan, Beck & Co. is one of the nation's leading investment banking
firms providing investment banking and consulting services to
regional and community financial institutions. Ryan Beck was organized
in 1946 and has been publicly held since 1986. The firm is registered
as a broker-dealer with the Securities and Exchange Commission
and is a member of the National Association of Securities Dealers,
Inc. and the Securities Investor Protection Corporation. Ryan
Beck maintains sales and research departments that specialize
in the securities of financial institutions, and is among the
largest market makers for such securities. Ryan Beck's Corporate
Finance Department is dedicated solely to financial institutions
and is one of the nation's largest such specialized groups. Community
Capital Group, a division of Ryan Beck, provides administrative,
marketing and sales assistance for subscription and community
offerings of mutual institutions converting to stock form.
The research team for the Banking Opportunity Trust is led by
James P. Benson, CFA, Senior Vice President, and Director of Equity
Research. Mr. Benson has been involved in the analysis of financial
institutions since 1981 and has been a Chartered Financial Analyst
since 1984.
Prior to joining Ryan Beck in 1993, Mr. Benson worked in the Chairman's
Office of the Dime Savings Bank of New York. Before joining the
Dime, he was a senior equity analyst with Drexel Burnham Lambert
for several years.
Mr. Benson is a member of the Association for Investment Management
and Research, as well as the New York Society of Security Analysts.
Page 21
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 $8 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals
with many years of experience in the unit investment trust industry.
The Sponsor is a member of the National Association of Securities
Dealers, Inc. and Securities Investor Protection Corporation and
has its principal offices at 1001 Warrenville Road, Lisle, Illinois
60532; telephone number (708) 241-4141. As of December 31, 1993,
the total partners' capital of Nike Securities L.P. was $12,743,032
(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 United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Trust may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Equity Securities. For information relating
to the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Equity Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America
Page 22
or of any other taxing authority having jurisdiction. In addition,
the Indenture contains other customary provisions limiting the
liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is 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
Mandatory Termination Date indicated herein under "Summary of
Essential Information." The Trust may be liquidated at any time
by consent of 100% of the Unit holders of the Trust or by the
Trustee when the value of the Equity Securities owned by the Trust
as shown by any evaluation, is less than the lower of $2,000,000
or 20% of the total value of Equity Securities deposited in such
Trust during the primary offering period, or in the event that
Units of the Trust not yet sold aggregating more than 60% of the
Units of the Trust are tendered for redemption by the Underwriter,
including the Sponsor. If the Trust is liquidated because of the
redemption of unsold Units of the Trust by the Underwriter, the
Sponsor will refund to each purchaser of Units of the Trust the
entire sales charge and the transaction fees paid by such purchaser.
In the event of termination, written notice thereof will be sent
by the Trustee to all Unit holders of the Trust. Within a reasonable
period after termination, the Trustee will follow the procedures
set forth under "How are Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of the
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of the Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his address appearing on
the registration books of the Trust maintained by the Trustee.
At least 60 days prior to the Maturity Date of the Trust the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (reduced by customary
transfer and registration charges), if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment
in cash for such Unit holder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. To be
effective, the election form, together with
Page 23
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date of the Trust. Unit
holders not electing a distribution of shares of Equity Securities
will receive a cash distribution from the sale of the remaining
Equity Securities within a reasonable time after the Trust is
terminated. Regardless of the distribution involved, the Trustee
will deduct from the funds of the Trust any accrued costs, expenses,
advances or indemnities provided by the Trust Agreement, including
estimated compensation of the Trustee and costs of liquidation
and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of
Equity Securities in the Trust upon termination may result in
a lower amount than might otherwise be realized if such sale were
not required at such time. The Trustee will then distribute to
each Unit holder his pro rata share of the balance of the Income
and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments,
of the Trust at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
has been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon appearing elsewhere herein and
in the Registration Statement, and is included in reliance upon
such report given upon the authority of such firm as experts in
accounting and auditing.
UNDERWRITING
The Underwriter named below has purchased Units in the following
amount:
<TABLE>
<CAPTION>
Number of
Name Address Units
____ _______ _________
<S> <C> <C>
Underwriter
Ryan, Beck & Co. 80 Main Street, West Orange, New Jersey 07052 50,000
=========
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became
the owner of the Units of the Trust and entitled to the benefits
thereof, as well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the
Units of the Trust will be made at the Public Offering Price described
in the prospectus. Units may also be sold to or through dealers
and others during the initial offering period and in the secondary
market at prices representing a concession or agency commission
as described in "Public Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the
Trust as they become available. The Underwriter concession will
be calculated as a percentage of the Public Offering Price per
Unit according to the following schedule:
<TABLE>
<CAPTION>
Underwriting Concession
________________________________ ____________
<S> <C>
$3,000,000 but less than $5,000,000 3.35%
$5,000,000 but less than $7,500,000 3.45%
$7,500,000 but less than $10,000,000 3.55%
$10,000,000 or more 3.75%
</TABLE>
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
Page 24
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 a total return
basis with 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 Magazine, The New York Times, U.S. News and World
Report, Business Week, Forbes Magazine or Fortune Magazine. As
with other performance data, performance comparisons should not
be considered representative of the Trust's relative performance
for any future period.
Page 25
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 110
We have audited the accompanying statement of net assets, including
the schedule of investments, of The First Trust Special Situations
Trust, Series 110, comprised of Banking Opportunity Trust, Series
1, at the opening of business on December 21, 1994. This statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement
of net assets is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on December 21, 1994. An audit also includes assessing
the accounting principles used and significant estimates made
by the Sponsor, as well as evaluating the overall presentation
of the statement of net assets. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above
presents fairly, in all material respects, the financial position
of The First Trust Special Situations Trust, Series 110, comprised
of Banking Opportunity Trust, Series 1, at the opening of business
on December 21, 1994 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 21, 1994
Page 26
Statement of Net Assets
Ryan Beck Banking Opportunity Trust, Series 1
The First Trust Special Situations Trust, Series 110
At the Opening of Business on the Initial Date of Deposit
December 21, 1994
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by purchase
contracts (1) (2) $476,209
========
Units outstanding 50,000
========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $499,957
Less sales charge (3) (23,748)
________
Net Assets $476,209
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $600,000 issued
by Bankers Trust Company has been deposited with the Trustee which
is sufficient to cover the monies necessary for the purchase of
the Equity Securities pursuant to contracts for the purchase of
such Equity Securities.
(3) The aggregate cost to investors includes a sales charge
computed at the rate of 4.75% of the Public Offering Price (equivalent
to 4.987% of the net amount invested), assuming no reduction of
sales charge for quantity purchases.
Page 27
Schedule of Investments
Ryan Beck Banking Opportunity Trust, Series 1
The First Trust Special Situations Trust, Series 110
At the Opening of Business on the Initial Date of Deposit
December 21, 1994
<TABLE>
<CAPTION>
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price Share to Trust (2)
_________ _______________________________________ __________________ ______ _____________
<C> <S> <C> <C> <C>
Banks
______
289 BOMS BancorpSouth, Inc. 2.00% $ 33.000 $ 9,537
922 EVGN Evergreen Bancorp, Inc. 3.00% 15.500 14,291
1,256 FCOM First Commerce Corporation 6.00% 22.750 28,574
879 NBTB NBT Bancorp, Inc. 3.00% 16.250 14,284
1,221 SUBN Summit Bancorporation 5.00% 19.500 23,810
1,284 SUSQ Susquehanna Bancshares, Inc. 6.00% 22.250 28,569
1,184 UJB UJB Financial Corporation 6.00% 24.125 28,564
1,394 UPC Union Planters Corporation 6.00% 20.500 28,577
697 UBAN USBANCORP, Inc. 3.00% 20.500 14,288
Thrifts
_______
448 AMFF AMFED Financial, Inc. 2.00% 21.250 9,520
712 ASFC Astoria Financial Corporation 4.00% 26.750 19,046
1,058 BVFS Bay View Capital Corporation 4.00% 18.000 19,044
2,241 CTBX Centerbank 5.00% 10.625 23,811
1,166 CMSB Commonwealth Savings Bank, MHC 3.00% 12.250 14,284
3,629 DNFC D & N Financial Corporation 6.00% 7.875 28,578
918 GNPT GP Financial Corporation 4.00% 20.750 19,049
1,299 HOFL Home Financial Corporation 3.00% 11.000 14,289
2,352 IBSF IBS Financial Corporation 5.00% 10.125 23,814
577 JSBA Jefferson Savings Bancorp, Inc. 2.00% 16.500 9,520
1,078 MLFB MLF Bancorp, Inc. 3.00% 13.250 14,283
920 NSBI N.S. Bancorp, Inc. 5.00% 25.875 23,805
907 NWSB Northwest Savings Bank 3.00% 15.750 14,285
2,333 PBCT People's Bank, MHC 6.00% 12.250 28,579
1,488 RCSB Rochester Community Savings Bank 5.00% 16.000 23,808
______ ___________
Total Investments 100% $476,209
====== ===========
</TABLE>
[FN]
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on December 20, 1994.
(2) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the last sale prices of the
listed Equity Securities and the ask prices of the over-the-counter
traded Equity Securities on the business day prior to the Initial
Date of Deposit). The valuation of the Equity Securities has been
determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Equity Securities on the Initial
Date of Deposit was $476,209. Cost and loss to Sponsor relating
to the Equity Securities sold to the Trust were $476,366 and $157,
respectively.
Page 28
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Page 30
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Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
Banking Opportunity Trust, Series 1
The First Trust Special Situations Trust, Series 110:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 6
Why are Investments in the Trust Suitable for
Retirement Plans? 8
Portfolio:
What are Equity Securities? 9
Risk Factors 9
What are the Equity Securities Selected for
Banking Opportunity Trust, Series 1? 12
What are Some Additional Considerations
for Investors? 14
Public Offering:
How is the Public Offering Price Determined? 15
How are Units Distributed? 16
What are the Sponsor's and Underwriter's
Profits? 16
Will There be a Secondary Market? 17
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 17
How are Income and Capital Distributed? 18
What Reports will Unit Holders Receive? 18
How May Units be Redeemed? 19
How May Units be Purchased by the Sponsor
or Underwriter? 20
How May Equity Securities be Removed
from the Trust? 20
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 21
Who is the Sponsor? 22
Who is the Trustee? 22
Limitations on Liabilities of Sponsor and Trustee 22
Who is the Evaluator? 23
Other Information:
How May the Indenture be
Amended or Terminated? 23
Legal Opinions 24
Experts 24
Underwriting 24
Report of Independent Auditors 26
Statement of Net Assets 27
Notes to Statement of Net Assets 27
Schedule of Investments 28
</TABLE>
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE TRUST HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
RYAN BECK
BANKING
OPPORTUNITY
TRUST
Series 1
Ryan, Beck & Co.
80 Main Street
West Orange, New Jersey 07052
1-800-342-2325
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
December 21, 1994
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 110, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1
and The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, for purposes of
the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
110, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
December 21, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 110
By NIKE SECURITIES L.P.
Depositor
By Carlos E. Nardo
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) December 21, 1994
General Partner of )
Nike Securities L.P. )
)
)
) Carlos E. Nardo
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Special Situations Trust, Series 18 (File No.
33-42683) and the same is hereby incorporated herein by
this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated December 21, 1994,
in Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 33-56483) and related Prospectus of The First Trust Special
Situations Trust, Series 110.
ERNST & YOUNG LLP
Chicago, Illinois
December 21, 1994
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 110 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York, as Trustee, First Trust Advisors
L.P., as Evaluator, and First Trust Advisors L.P., as
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 110
TRUST AGREEMENT
Dated: December 21, 1994
This Trust Agreement among Nike Securities L.P., as
Depositor, United States Trust Company of New York, as
Trustee, First Trust Advisors L.P., as Evaluator, and First
Trust Advisors L.P., as Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions
by reference to the document entitled "Standard Terms and
Conditions of Trust for The First Trust Special Situations
Trust, Series 22 and certain subsequent Series, Effective
November 20, 1991" (herein called the "Standard Terms and
Conditions of Trust"), and such provisions as are
incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to
Articles and Sections of the Standard Terms and Conditions
of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III
hereof, all the provisions contained in the Standard Terms
and Conditions of Trust are herein incorporated by reference
in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and
Conditions of Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for
the Trust on the Initial Date of Deposit is 50,000 Units.
(2) The initial fractional undivided interest in
and ownership of the Trust represented by each Unit thereof
shall be 1/50,000.
Documents representing this number of Units for the
Trust are being delivered by the Trustee to the Depositor
pursuant to Section 2.03 of the Standard Terms and
Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial
Date of Deposit:
2.00% BancorpSouth, Inc., 3.00%
Evergreen Bancorp, Inc., 6.00% First
Commerce Corporation, 3.00% NBT
Bancorp, Inc., 5.00% Summit
Bancorporation, 6.00% Susquehanna
Bancshares, Inc., 6.00% UJB Financial
Corporation, 6.00% Union Planters
Corporation, 3.00% USBANCORP, Inc.,
2.00% AMFED Financial, Inc., 4.00%
Astoria Financial Corporation, 4.00%
Bay View Capital Corp., 5.00% Centerbank,
3.00% Commonwealth Savings Bank, MHC,
6.00% D & N Financial Corporation, 4.00% GP
Financial Corp., 3.00% Home Financial
Corporation, 5.00% IBS Financial
Corporation, 2.00% Jefferson Savings
Bancorp, Inc., 3.00% MLF Bancorp, Inc., 5.00%
N.S. Bancorp, Inc., 3.00% Northwest
Savings Bank, 6.00% People's Bank, MHC,
5.00% Rochester Community Savings Bank.
D. The Record Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
E. The Distribution Dates shall be as set forth in
the Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall
be January 15, 1999.
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust
shall be an annual fee of $0.0030 per Unit calculated on the
largest number of Units outstanding during each period in
respect of which a payment is made pursuant to Section 3.05,
payable on a Distribution Date.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust
shall be an annual fee of $0.0090 per Unit, calculated on
the largest number of Units outstanding during each period
in respect of which a payment is made pursuant to Section
3.05. However, in no event, except as may be otherwise be
provided in the Standard Terms and Conditions of Trust,
shall the Trustee receive compensation in any one year from
any Trust of less than $2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is
December 21, 1994.
J. The minimum amount of Equity Securities to be sold
by the Trustee pursuant to Section 5.02 of the Indenture for
the redemption of Units shall be 100 shares.
PART III
A. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal
Account."
B. Paragraph (g) of Section 6.01 of the Standard
Terms and Conditions of Trust is hereby amended by inserting
the following after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value the
Equity of Securities deposited in such Trust, or (ii)"
C. Paragraph (c) of Subsection II of Section 3.05 of
the Standard Terms and Conditions of Trust is hereby amended
to read as follows:
"On each Distribution Date the Trustee shall
distribute to each Unit holder of record at the close
of business on the Record Date immediately preceding
such Distribution Date an amount per Unit equal to such
Unit holder's pro rata share of the balance of the
Principal Account (except for monies on deposit therein
required to purchase Contract Obligations) computed as
of the close of business on such Record Date after
deduction of any amounts provided in Subsection I,
provided, however, that with respect to distributions
other than the distribution occurring in the month of
December of each year, the Trustee shall not be
required to make a distribution from the Principal
Account unless the amount available for distribution
shall equal $1.00 per 1000 Units in the case of Units
initially offered at approximately $1.00 per Unit, or,
$1.00 per 100 Units in the case of Units initially
offered at approximately $10.00 per Unit."
D. For purposes of this Trust, all references in the
Standard Terms and Conditions of Trust including provisions
thereof amended hereby to "$1.00 per Unit" shall be amended
to read "$10.00 per Unit" and all references to "per 1,000
Units" shall be amended to read "per 100 Units."
E. The first sentence in Section 4.03. of the
Standard Terms and Conditions of Trust is hereby amended to
read in its entirety as follows:
"As compensations for its services hereunder, the
Evaluator shall receive against a statement therefor
submitted to the Trustee on or before each Record Date
(upon which the Trustee may rely as the Evaluator's
certification that the amount stated does not exceed
the cost incurred by the Evaluator in providing
services as described below), an amount equal to the
amount specified as compensation for the Evaluator in
the Trust Agreement provided, however, if at any time
the fee of the Trustee shall have been increased
pursuant to Section 6.04, the compensation of the
Evaluator hereunder shall at the same time be ratably
increased."
F. Section 5.02 of the Standard Terms and Conditions
of Trust is amended by adding the following new paragraph
after the second paragraph of such section:
"In lieu of a cash redemption, Unit holders tendering
2,500 Units or more for redemption may request from the
Trustee by written notice submitted at the time of tender an
in kind distribution of shares of Securities, to the extent
of whole shares. To the extent possible, in kind
distributions of Securities shall be made by the Trustee
through the distribution of each of the Securities in book-
entry form to the account of the Unit holder's bank or
broker-dealer at the Depository Trust Company. An in kind
distribution will be reduced by all expenses in connection
with customary transfer and registration charges. The
tendering Unit holder will receive his pro rata number of
whole shares of each of the Securities comprising the
portfolio and cash from the Principal Account equal to the
fractional shares to which the tendering Unit holder is
entitled. The Trustee may, but shall not be required to,
adjust the number of shares of any issue of Securities
included in a Unit holder's in kind distribution to
facilitate the distribution of whole shares, such adjustment
to be made on the basis of the value of Securities on the
date of tender. If funds in the Principal Account are
insufficient to cover the required cash distribution to the
tendering Unit holder, the Trustee may sell Securities in
the manner described in this Section 5.02."
G. Section 8.02 of the Standard Terms and Conditions
of Trust shall be amended to delete the reference to
"100,000 Units" and substitute "2,500 Units" in the third
sentence of the second paragraph thereof.
H. The first paragraph of Section 3.05.II(a) of the
Standard Terms and Conditions of Trust is hereby amended to
read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee
shall distribute to each Unit holder of record at the
close of business on the Record Date immediately
preceding such Distribution Date an amount per Unit
equal to such Unit holder's Income Distribution (as
defined below), plus such Unit holder's pro rata share
of the balance of the Principal Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on
such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that with
respect to distributions other than the distribution
occurring in the month of December of each year, the
Trustee shall not be required to make a distribution
from the Principal Account unless the amount available
for distribution shall equal $1.00 per 100 Units."
I. Section 3.05.II(b) of the Standard Terms and
Conditions of Trust is hereby amended to read in its
entirety as follows:
"(b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such
Unit holder's pro rata share of the cash balance in the
Income Account computed as of the close of business on
the Record Date immediately preceding such Income
Distribution after deduction of (i) the fees and
expenses then deductible pursuant to Section 3.05.I.
and (ii) the Trustee's estimate of other expenses
properly chargeable to the Income Account pursuant to
the Indenture which have accrued, as of such Record
Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
J. Section 3.11 of the Standard Terms and Conditions
of Trust is hereby deleted in its entirety and replaced with
the following language:
"Section 3.11 Notice to Depositor. In the event
that the Trustee shall have been notified at any time
of any action to be taken or proposed to be taken by at
least a legally required number of holders of the
equity securities (the "Equity Securities") (including
but not limited to the making of any demand, direction,
request, giving of any notice, consent or waiver or the
voting with respect to any amendment or supplement to
any indenture, resolution, agreement or other
instrument under or pursuant to which the Contract
Obligations, if any, have been issued) the Trustee
shall promptly notify the Depositor and shall thereupon
take such action or refrain from taking any action as
the Depositor shall in writing direct; provided,
however, that if the Depositor shall not within five
Business Days of the giving of such notice to the
Depositor direct the Trustee to take or refrain from
taking any action, the Trustee shall take such action
as it, in its sole discretion, shall deem advisable.
In the event that the Trustee shall have been
notified at any time of any action to be taken or
proposed to be taken by at least a legally required
number of holders of any Equity Securities deposited in
a Trust, the Trustee shall take such action or omit
from taking any action, as appropriate, so as to insure
that the Equity Securities are voted as closely as
possible in the same manner and the same general
proportion as are the Equity Securities held by owners
other than the Trust.
In the event that an offer by the issuer of any of
the Securities or any other party shall be made to
issue new securities, or to exchange securities, for
Trust Securities, the Trustee shall reject such offer.
However, should any exchange or substitution be
effected notwithstanding such rejection or without an
initial offer, any Securities, cash and/or property
received in exchange shall be deposited hereunder and
shall be promptly sold, if securities or property, by
the Trustee pursuant to the Depositor's direction,
unless the Depositor advises the Trustee to keep such
securities or property. The Depositor may rely on the
Portfolio Supervisor in so advising the Trustee. The
cash received in such exchange and cash proceeds of any
such sales shall be distributed to Unit holders on the
next distribution date in the manner set forth in
Section 3.05 regarding distributions from the Principal
Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss
incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be
liable to any person for any action or failure to take
action pursuant to the terms of this Section 3.11 other
than failure to notify the Depositor.
Whenever new securities or property is received
and retained by the Trust pursuant to this Section
3.11, the Trustee shall, within 5 days thereafter, mail
to all Unit holders of the Trust notices of such
acquisition unless legal counsel for the Trust
determines that such notice is not required by The
Investment Company Act of 1940, as amended."
K. Section 1.01(4) shall be amended to read as
follows:
"(4)"Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
L. Section 3.05 of Article III of the Standard Terms
and Conditions of Trust is hereby amended to include the
following subsection:
"Section 3.05.I.(e) deduct from the Interest
Account or, to the extent funds are not available in
such Account, from the Principal Account and pay to the
Depositor the amount that it is entitled to receive
pursuant to Section 3.14.
M. Article III of the Standard Terms and Conditions
of Trust is hereby amended by inserting the following
paragraphs which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative
Expenses. As compensation for providing bookkeeping
and other administrative services of a character
described in Section 26(a)(2)(C) of the Investment Company Act
of 1940 to the extent such services are in addition to,
and do not duplicate, the services to be provided
hereunder by the Trustee or the Portfolio Supervisor,
the Depositor shall receive against a statement or
statements therefor submitted to the Trustee monthly or
annually an aggregate annual fee in an amount which
shall not exceed $0.0010 times the number of Units
outstanding as of January 1 of such year except for a
year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number
of Units outstanding at the end of such month (such
annual fee to be pro rated for any calendar year in
which the Depositor provides service during less than
the whole of such year), but in no event shall such
compensation when combined with all compensation
received from other unit investment trusts for which
the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services
in any calendar year exceed the aggregate cost to the
Depositor providing services to such unit investment
trusts. Such compensation may, from time to time, be
adjusted provided that the total adjustment upward does
not, at the time of such adjustment, exceed the
percentage of the total increase, after the date
hereof, in consumer prices for services as measured by
the United States Department of Labor Consumer Price
Index entitled "All Services Less Rent of Shelter" or
similar index, if such index should no longer be
published. The consent or concurrence of any Unit
holder hereunder shall not be required for any such
adjustment or increase. Such compensation shall be
paid by the Trustee, upon receipt of invoice therefor
from the Depositor, upon which, as to the cost incurred
by the Depositor of providing services hereunder the
Trustee may rely, and shall be charged against the
Interest and Principal Accounts on or before the
Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have
no liability to any Certificateholder or other person
for any payment made in good faith pursuant to this
Section.
If the cash balance in the Interest and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.14, the Trustee
shall have the power to sell (i) Bonds from the current
list of Bonds designated to be sold pursuant to Section
5.02 hereof, or (ii) if no such Bonds have been so
designated, such Bonds as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds
of any such sale in payment of the amounts payable
pursuant to this Section 3.14.
Any moneys payable to the Depositor pursuant to
this Section 3.16 shall be secured by a prior lien on
the Trust Fund except that no such lien shall be prior
to any lien in favor of the Trustee under the
provisions of Section 6.04 herein.
N. Section 1.01(3) shall be amended to read as
follows:
"(3) "Evaluator" shall mean First Trust Advisors
L.P. and its successors in interest, or any successor
evaluator appointed as hereinafter provided."
IN WITNESS WHEREOF, Nike Securities L.P., United States
Trust Company of New York and First Trust Advisors L.P. have
each caused this Trust Agreement to be executed and the
respective corporate seal to be hereto affixed and attested
(if applicable) by authorized officers; all as of the day,
month and year first above written.
NIKE SECURITIES L.P.,Depositor
By Carlos E. Nardo
Senior Vice President
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
(SEAL) By Thomas Porrazzo
Vice President
Attest:
Rosalia A. Raviele
Assistant Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Carlos E. Nardo
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Carlos E. Nardo
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 110
(Note: Incorporated herein and made a part hereof for
the Trust is the "Schedule of Investments" for the Trust as
set forth in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
December 21, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 110
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 110 in connection with the preparation, execution
and delivery of a Trust Agreement dated December 21, 1994 among
Nike Securities L.P., as Depositor, United States Trust Company
of New York, as Trustee, First Trust Advisors L.P., as Evaluator,
and First Trust Advisors L.P., as Portfolio Supervisor, pursuant
to which the Depositor has delivered to and deposited the
Securities listed in Schedule A to the Trust Agreement with the
Trustee and pursuant to which the Trustee has issued to or on the
order of the Depositor a certificate or certificates representing
units of fractional undivided interest in and ownership of the
Fund created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-56483)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
December 21, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
United States Trust Company of New York
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 110
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 110 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trust of said Fund (the "Trust"),
under a Trust Agreement, dated December 21, 1994 (the
"Indenture"), among Nike Securities L.P., as Depositor, United
States Trust Company of New York, as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds Equity Securities as such term is defined in the
Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of the assets
of the Trust under the Internal Revenue Code of 1986 as amended
(the "Code"); the income of the Trust will be treated as income
of the Unit holders thereof under the Code; and an item of Trust
income will have the same character in the hands of a Unit holder
as it would have in the hands of the Trustee. Each Unit holder
will be considered to have received his pro rata share of income
derived from each Trust asset when such income is received by the
Trust.
II. Each Unit holder will have a taxable event when the
Trust disposes of an Equity Security (whether by sale, exchange,
redemption, or otherwise) or upon the sale or redemption of Units
by such Unit holder. The price a Unit holder pays for his Units,
including sales charges, is allocated among his pro rata portion
of each Equity Security held by the Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases
his Units) in order to determine his initial cost for his pro
rata portion of each Equity Security held by the Trust. For
Federal income tax purposes, a Unit holder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a
corporation are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and profits." A
Unit holder's pro rata portion of dividends which exceed such
current and accumulated earnings and profits will first reduce a
Unit holder's tax basis in such Equity Security (and accordingly
his basis in his Units), and to the extent that such dividends
exceed a Unit holder's tax basis in such Equity Security shall be
treated as gain from the sale or exchange of property.
III. A Unit holder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Securities held by
the Trust will generally be considered a capital gain except in
the case of a dealer or a financial institution and will be
generally long-term if the Unit holder has held his Units for
more than one year. A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of
Securities held by the Trust will generally be considered a
capital loss except in the case of a dealer or a financial
institution and will be generally long-term if the Unit holder
has held his Units for more than one year.
IV. The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they exceed two
percent of an individual taxpayer's adjusted gross income.
Miscellaneous itemized deductions subject to this limitation
under present law include a Unit holder's pro rata share of
expenses paid by the Trust, including fees of the Trustee and the
Evaluator.
For taxable years beginning after December 31, 1986 and
before January 1, 1996, certain corporations may be subject to
the environmental tax (the "Superfund Tax") imposed by Section
59A of the Code. Income received from, and gains recognized from
the disposition of, an Equity Security by the Trust will be
included in the computation of the Superfund Tax by such
corporations holding Units in the Trust.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-56483)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
December 21, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 110
Ryan Beck Banking Opportunity Trust, Series 1
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 110
Ryan Beck Banking Opportunity Trust, Series 1
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
110 Ryan Beck Banking Opportunity Trust, Series 1 (the "Trust"),
which will be established under a Standard Terms and Conditions
of Trust dated November 20, 1991, and a related Trust Agreement
dated as of today (collectively, the "Indenture"), among Nike
Securities L.P., as Depositor (the "Depositor"); First Trust
Advisors L.P., as Evaluator; First Trust Advisors L.P., as
Portfolio Supervisor and United States Trust Company of New York,
as Trustee (the "Trustee"). Pursuant to the terms of the
Indenture, units of fractional undivided interest in the Trust
(the "Units") will be issued in the aggregate number set forth in
the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 33-56483) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit Holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
December 21, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 110
Ryan Beck Banking Opportunity Trust, Series 1
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 110
Ryan Beck Banking Opportunity Trust, Series 1
Dear Sirs:
We are acting as counsel for United States Trust Company of
New York (the "Trust Company") in connection with the execution
and delivery of a Standard Terms and Conditions of Trust dated
November 20, 1991, and a related Trust Agreement, dated today's
date (collectively, the "Indenture"), among Nike Securities L.P.,
as Depositor (the "Depositor"); First Trust Advisors L.P., as
Evaluator; First Trust Advisors L.P., as Portfolio Supervisor;
and the Trust Company, as Trustee (the "Trustee"), establishing
The First Trust Special Situations Trust, Series 110 McDonald
Select Equity Trust, Series 1995 (the "Trust"), and the execution
by the Trust Company, as Trustee under the Indenture, of a
certificate or certificates evidencing ownership of units (such
certificate or certificates and such aggregate units being herein
called "Certificates" and "Units"), each of which represents an
undivided interest in the Trust, consisting of common stocks
(including confirmations of contracts for the purchase of certain
obligations not delivered and cash, cash equivalents or an
irrevocable letter of credit or a combination thereof, in the
amount required for such purchase upon the receipt of such
obligations), such obligations being defined in the Indenture as
Securities and listed in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. The Trust Company is a duly organized and existing
corporation having the powers of a trust company under the laws
of the State of New York.
2. The Indenture has been duly executed and delivered by
the Trust Company and, assuming due execution and delivery by the
other parties thereto, constitutes the valid and legally binding
obligation of the Trust Company.
3. The Certificates are in proper form for execution and
delivery by the Trust Company, as Trustee.
4. The Trust Company, as Trustee, has duly executed and
delivered to or upon the order of the Depositor a Certificate or
Certificates evidencing ownership of the Units, registered in the
name of the Depositor. Upon receipt of confirmation of the
effectiveness of the registration statement for the sale of the
Units filed with the Securities and Exchange Commission under the
Securities Act of 1933, the Trustee may deliver such other
Certificates, in such names and denominations as the Depositor
may request, to or upon the order of the Depositor as provided in
the Closing Memorandum.
5. The Trust Company, as Trustee, may lawfully under the
New York Banking Law advance to the Trust amounts as may be
necessary to provide monthly interest distributions of
approximately equal amounts, and be reimbursed, without interest,
for any such advances from funds in the interest account on the
ensuing record date, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
December 21, 1994
First Trust Advisors L.P.
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 110
Gentlemen:
We have examined the Registration Statement File No. 33-
56483 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to First Trust
Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Carlos E. Nardo
Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information
extracted from Amendment number 1 to form S-6 and is qualified
in its entirety by reference to such Amendment number 1 to form
S-6.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> Banking Opportunity Trust
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<S> <C>
<PERIOD-TYPE> Other
<FISCAL-YEAR-END> DEC-21-1994
<PERIOD-START> DEC-21-1994
<PERIOD-END> DEC-21-1994
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</TABLE>
