SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 112
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title and Amount of
Securities Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee
(as required by Rule 24f-2): $500.00
H. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 112
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 1994
Select 1995 Growth & Treasury Securities Trust
The Trust. The First Trust (registered trademark) Special Situations
Trust, Series 112 (the "Trust") is a unit investment trust consisting
of a portfolio containing zero coupon U.S. Treasury bonds and
common stocks issued by small capitalization companies.
The objectives of the Trust are to protect Unit holders' capital
and provide potential for capital appreciation or income by investing
a portion of its portfolio in zero coupon U.S. Treasury bonds
("Treasury Obligations"), and the remainder of the Trust's portfolio
in common stocks issued by small capitalization companies ("Equity
Securities"). Collectively, the Treasury Obligations and the Equity
Securities are referred to herein as the "Securities." See "Schedule
of Investments." The Trust has a mandatory termination date (the
"Mandatory Termination Date" or "Trust Ending Date") as set forth
under "Summary of Essential Information." The Treasury Obligations
evidence the right to receive a fixed payment at a future date
from the U.S. Government and are backed by the full faith and
credit of the U.S. Government. The guarantee of the U.S. Government
does not apply to the market value of the Treasury Obligations
or the Units of the Trust, whose net asset value will fluctuate
and, prior to maturity, may be worth more or less than a purchaser's
acquisition cost. The Trust is intended to achieve its objective
over the life of the Trust and as such is best suited for those
investors capable of holding Units to maturity. There is, of course,
no guarantee that the objectives of the Trust will be achieved.
Each Unit of the Trust represents an undivided fractional interest
in all the Securities deposited in the Trust. The Trust has been
organized so that purchasers of Units should receive, at the termination
of the Trust, an amount per Unit at least equal to $1.00 (which
is equal to the per Unit value upon maturity of the Treasury Obligations),
even if the Trust never paid a dividend and the value of the Equity
Securities were to decrease to zero, which the Sponsor considers
highly unlikely. This feature of the Trust provides Unit holders
who purchase Units at a price of $1.00 or less per Unit with total
principal protection, including any sales charges paid, although
they might forego any earnings on the amount invested. To the
extent that Units are purchased at a price less than $1.00 per
Unit, this feature may also provide a potential for capital appreciation.
As a result of the volatile nature of the market for zero coupon
U.S. Treasury bonds, Units sold or redeemed prior to maturity
will fluctuate in price and the underlying Treasury Obligations
may be valued at a price greater or less than their value as of
the Initial Date of Deposit. UNIT HOLDERS DISPOSING OF THEIR UNITS
PRIOR TO THE MATURITY OF THE TRUSTS MAY RECEIVE MORE OR LESS THAN
$1.00 PER UNIT, DEPENDING ON MARKET CONDITIONS ON THE DATE UNITS
ARE SOLD OR REDEEMED.
The Treasury Obligations deposited in the Trust on the Initial
Date of Deposit will mature on (the "Treasury Obligations Maturity
Date"). The Treasury Obligations in the Trust have a maturity
value equal to or greater than the aggregate Public Offering Price
(which includes the sales charge) of the Units of the Trust on
the Initial Date of Deposit. The 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 and with changes in the conditions
and performance of the specific Equity Securities owned by the
Trust. See "Portfolio."
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.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE
TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
John G. Kinnard & Co., Inc.
The date of this Prospectus is , 1995
Page 1
The Sponsor may, from time to time during a period of up to approximately
360 days after the Initial Date of Deposit, deposit additional
Securities in the Trust, provided it maintains the original percentage
relationship between the Treasury Obligations and Equity Securities
in the Trust's portfolio. Such deposits of additional Securities
will, therefore, be done in such a manner that the maturity value
of each Unit should always be an amount at least equal to $1.00,
and that the original proportionate relationship amongst the individual
issues of the Equity Securities shall be maintained. Any such
difference may be due to the sale, redemption or liquidation of
any 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 Securities be Removed from the Trust?" The
Trust will automatically terminate shortly after the maturity
of the Treasury Obligations deposited therein.
Public Offering Price. The Public Offering Price per Unit of the
Trust during the initial offering period is equal to a pro rata
share of the offering prices of the Treasury Obligations and 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 5.5% (equivalent to 5.82% of the net amount invested).
The secondary market Public Offering Price per Unit will be based
upon a pro rata share of the bid prices of the Treasury Obligations
and the 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 5.5% (equivalent to 5.82% of the net amount
invested), subject to reduction beginning
. The minimum purchase is $1,000. The sales charge is
reduced on a graduated scale for sales involving at least 100,000
Units. See "How is the Public Offering Price Determined?"
Dividend and Capital Distributions. Distributions of dividends
and capital, if any, received by the Trust will be paid in cash
on the Distribution Date to Unit holders of record on the Record
Date as set forth in the "Summary of Essential Information." 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. INCOME
WITH RESPECT TO THE ACCRUAL OF ORIGINAL ISSUE DISCOUNT ON THE
TREASURY OBLIGATIONS WILL NOT BE DISTRIBUTED CURRENTLY, ALTHOUGH
UNIT HOLDERS WILL BE SUBJECT TO INCOME TAX AT ORDINARY INCOME
RATES AS IF A DISTRIBUTION HAD OCCURRED. See "What is the Federal
Tax Status of Unit Holders?" Additionally, upon termination of
the Trust, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his 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
bid side evaluation of the Treasury Obligations and 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 be based upon the aggregate offering side evaluation of the
Treasury Obligations and 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 bid price
of the Treasury Obligations plus the aggregate underlying value
of the Equity Securities in the Trust (generally determined by
the closing sale prices of listed Equity Securities and the bid
prices of over-the-counter traded Equity Securities) plus or minus
a pro rata share of cash, if any, in the Capital and Income Accounts
of the Trust. See "How May Units be Redeemed?"
Termination. Commencing on the Treasury Obligations Maturity 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
Page 2
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 Treasury Obligations Maturity Date
the Trustee will provide written notice thereof to all Unit holders
and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Equity Securities (reduced
by customary transfer and registration charges) if such Unit holder
owns at least 25,000 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.
All Unit holders will receive their pro rata portion of the Treasury
Obligations in cash upon the termination of the Trust. To be effective,
the election form, together with surrendered certificates and
other documentation required by the Trustee, must be returned
to the Trustee at least five business days prior to the Treasury
Obligations Maturity Date. Unit holders not electing a distribution
of shares of Equity Securities will receive a cash distribution
from the sale of the remaining Securities within a reasonable
time after the Trust is terminated. See "Rights of Unit Holders-How
are Income and Capital Distributed?"
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 Securities
which make up the Trust or the general condition of the stock
market, volatile interest rates or an economic recession. 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 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities- , 1995
Underwriter: John G. Kinnard & Co., Inc.
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>
Aggregate Maturity Value of Treasury Obligations Initially Deposited $
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Securities per Unit $
Sales Charge of 5.5% of the Public Offering Price per Unit,
(5.82% of the net amount invested) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on bid price evaluation of
underlying Treasury Obligations and aggregate underlying value of
Equity Securities) $ less than Public Offering Price per Unit;
$ less than Sponsor's Initial Repurchase Price per Unit (3) $
</TABLE>
CUSIP Number
First Settlement Date
Treasury Obligations Maturity Date
Mandatory Termination Date
Trustee's Annual Fee $0.00090 per Unit outstanding.
Evaluator's Annual Fee $0.00030 per Unit outstanding.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading
(4:00 p.m. Eastern time) on the
New York Stock Exchange on each
day on which it is open.
Supervisory Fee (4) Maximum of $0.00025 per
Unit outstanding annually payable
to an affiliate of the Sponsor.
Income Distribution Record Date Fifteenth day of each December,
commencing December 15, 1995.
Income Distribution Date (5) Last day of each December,
commencing December 29, 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. The Treasury
Obligations are valued at their aggregate offering side evaluation.
(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
$0.00010 per Unit.
(5) Distributions from the Capital Account, if any, will be made
monthly 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 $0.001 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 4
Select 1995 Growth & Treasury Securities Trust
The First Trust Special Situations Trust, Series 112
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 112 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:
Select 1995 Growth & Treasury Securities Trust. 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 zero coupon
U.S. Treasury bonds and common stocks, 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 objectives of the Trust are to protect Unit holders' capital
and provide potential for capital appreciation or income through
an investment in zero coupon U.S. Treasury bonds, such securities
being referred to herein as the "Treasury Obligations," and in
equity securities issued by small capitalization companies ("Equity
Securities"). In selecting Equity Securities for the Trust, the
Underwriter has chosen certain small capitalization companies
which it believes have the potential to achieve above average
appreciation and growth by providing new products or services,
thus becoming tomorrow's industry leaders. While past performance
is no guarantee of future results, over the long term, small capitalization
companies have historically produced greater returns than large
capitalization companies. The higher returns achieved by small
capitalization companies are generally accompanied by higher risks
than those of large capitalization companies. Such risks include
inadequate financial resources, increased stock price volatility,
changing consumer preferences and less experienced management.
The Treasury Obligations evidence the right to receive a fixed
payment at a future date from the U.S. Government and are backed
by the full faith and credit of the U.S. Government. The guarantee
of the U.S. Government does not apply to the market value of the
Treasury Obligations or the Units of the Trust, whose net asset
value will fluctuate and, prior to maturity, may be more or less
than a purchaser's acquisition cost. Collectively, the Treasury
Obligations and Equity Securities in the Trust are referred to
herein as the "Securities." There is, of course, no guarantee
that the objectives of the Trust will be achieved.
With the deposit of the Securities on the Initial Date of Deposit,
the Sponsor established a percentage relationship between the
principal amounts of Treasury Obligations and 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 Securities in the Trust and Units may be continuously
offered for sale to the public by means of this Prospectus, resulting
in a potential increase in the outstanding number of Units of
the Trust. Any additional Securities deposited in the Trust will
maintain, as nearly as is practicable, the original proportionate
relationship of the Treasury Obligations and Equity Securities
in the Trust's portfolio. Such deposits of additional Securities
will, therefore, be done in such a manner that the maturity value
of the Treasury Obligations represented by each Unit should always
be an amount at least equal to $1.00, and that the original proportionate
relationship amongst the individual issues of the Equity Securities
shall be maintained. Any deposit by the Sponsor of additional
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 Securities deposited in the Trust
on the Initial, or any subsequent, Date of Deposit. See "How May
Securities be Removed from the Trust?" On a cost basis to the
Trust, the original percentage relationship on the Initial Date
of Deposit was approximately % Treasury Obligations
and approximately % Equity Securities. The
Page 5
original percentage relationship of each Equity Security to the
Trust is set forth herein under "Schedule of Investments." Since
the prices of the underlying Treasury Obligations and Equity Securities
will fluctuate daily, the ratio, on a market value basis, will
also change daily. The maturity value of the Treasury Obligations
and the portion of Equity Securities represented by each Unit
will not change as a result of the deposit of additional Securities
in the Trust.
On the Initial Date of Deposit, each Unit of the Trust represented
the undivided fractional interest in the Securities deposited
in the Trust set forth under "Summary of Essential Information."
The Trust has been organized so that purchasers of Units should
receive, at the termination of the Trust, an amount per Unit at
least equal to $1.00 per Unit (which is equal to the per Unit
value upon maturity of the Treasury Obligations), even if the
Equity Securities never paid a dividend and the value of the Equity
Securities in the Trust were to decrease to zero, which the Sponsor
considers highly unlikely. Furthermore, the Sponsor will take
such steps in connection with the deposit of additional Securities
in the Trust as are necessary to maintain a maturity value of
the Units of the Trust at least equal to $1.00 per Unit. The receipt
of only $1.00 per Unit upon the termination of the Trust (an
event which the Sponsor believes is unlikely) represents a substantial
loss on a present value basis. At current interest rates, the
present value of receiving $1.00 per Unit as of the termination
of the Trust would be approximately $ per Unit (the present
value is indicated by the amount per Unit which is invested in
Treasury Obligations). Furthermore, the $1.00 per Unit in no respect
protects investors against diminution in the purchasing power
of their investment due to inflation (although expectations concerning
inflation are a component in determining prevailing interest rates,
which in turn determine present values). If inflation were to
occur at the rate of 5% per annum during the period ending at
the termination of the Trust, the present dollar value of $1.00
per Unit at the termination of the Trust would be approximately
$ per Unit. To the extent that Units of the Trust are
redeemed, the aggregate value of the Securities in the Trust will
be reduced and the undivided fractional interest represented by
each outstanding Unit of the Trust will increase. However, if
additional Units are issued by the Trust in connection with the
deposit of additional Securities by the Sponsor, the aggregate
value of the Securities in the Trust will be increased by amounts
allocable to additional Units, and the fractional undivided interest
represented by each Unit of the Trust will be decreased proportionately.
See "How May Units be Redeemed?" The Trust has a Mandatory Termination
Date as set forth herein under "Summary of Essential Information."
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses,
expenses of the Trustee and other out-of-pocket expenses. 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.
Page 6
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 this 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 $0.00090 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 upon the Securities or any part of the Trust (no such
taxes or charges are being levied or made or, to the knowledge
of the Sponsor, contemplated). The above expenses and the Trustee's
annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to
sell Securities in the Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of the Trust except that the
Trustee shall not sell Treasury Obligations to pay Trust expenses.
Since the 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 $0.00050 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:
Page 7
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 income
derived from each Trust asset when such income is received by
the Trust.
2. Each Unit holder will have a taxable event when the Trust
disposes of a Security (whether by sale, exchange, redemption,
or payment at maturity) or upon the sale or redemption of Units
by such Unit holder. The price a Unit holder pays for his Units,
including sales charges, is allocated among his pro rata portion
of each Security held by 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 Security held by the Trust. The Treasury Obligations
held by the Trust are treated as stripped bonds and may be treated
as bonds issued at an original issue discount as of the date a
Unit holder purchases his Units. Because the Treasury Obligations
represent interests in "stripped" U.S. Treasury bonds, a Unit
holder's initial cost for his pro rata portion of each Treasury
Obligation held by the Trust shall be treated as its "purchase
price" by the Unit holder. Original issue discount is effectively
treated as interest for Federal income tax purposes and the amount
of original issue discount in this case is generally the difference
between the bond's purchase price and its stated redemption price
at maturity. A Unit holder will be required to include in gross
income for each taxable year the sum of his daily portions of
original issue discount attributable to the Treasury Obligations
held by the Trust as such original issue discount accrues and
will in general be subject to Federal income tax with respect
to the total amount of such original issue discount that accrues
for such year even though the income is not distributed to the
Unit holders during such year to the extent it is not less than
a "de minimis" amount as determined under a Treasury Regulation
issued on December 28, 1992 relating to stripped bonds. To the
extent the amount of such discount is less than the respective
"de minimis" amount, such discount shall be treated as zero. In
general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual
compounding of accrued interest. In the case of the Treasury Obligations,
this method will generally result in an increasing amount of income
to the Unit holders each year. Unit holders should consult their
tax advisers regarding the Federal income tax consequences and
accretion of original issue discount under the stripped bond rules.
For Federal income tax purposes, a Unit holder's pro rata portion
of dividends, as defined by Section 316 of the Code, paid by a
corporation with respect to an Equity Security held by the Trust
are taxable as ordinary income to the extent of such corporation's
current and accumulated "earnings and profits." A Unit holder's
pro rata portion of dividends paid on such Equity Security which
exceed such current and accumulated earnings and profits will
first reduce a Unit holder's tax basis in such Equity Security,
and to the extent that such dividends exceed a Unit holder's tax
basis in such Equity Security shall generally be treated as capital
gain. In general, any such capital gain will be short-term unless
a Unit holder has held his Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Securities held by the
Trust will generally be considered a capital gain 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 (the date on which the Units are acquired (i.e., the
trade date) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unit holder's
portion of loss, if any, upon the sale or redemption of Units
or the disposition of Securities held by the Trust will generally
be considered a capital loss except in the case of a dealer or
a financial institution and will be long-term if the Unit holder
has held his Units for more than one year. Unit holders should
consult their tax advisers regarding the recognition of such capital
gains and losses for Federal income tax purposes.
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
Page 8
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 shareholders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics
and other than for purposes of special taxes such as the accumulated
earnings tax and the personal holding corporation tax). However,
a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Proposed regulations have been issued which address
special rules that must be considered in determining whether the
46 day holding requirement is met. Moreover, the allowable percentage
of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends
received deduction.
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 a 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 marginal tax rate of 28%. However, it should be noted
that legislative proposals are introduced from time to time that
affect tax rates and could affect relative differences at which
ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate. Because some or all capital gains
are taxed at a comparatively lower rate under the Tax Act, the
Tax Act includes a provision that recharacterizes capital gains
as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions
entered into after April 30, 1993. Unit holders and prospective
investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Termination
of 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 25,000 Units may request an In-Kind
Distribution upon 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?" Treasury Obligations held by the Trust
will not be distributed to a Unit holder as part of an In-Kind
Distribution. The tax consequences relating to the sale of Treasury
Obligations are discussed above. As previously discussed, prior
to the termination of 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 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 Security owned by the Trust. A "Security" for this purpose
is a particular class of stock issued by a particular corporation
(and does not include the Treasury Obligations). If the Unit holder
receives only whole shares of a Security in exchange for his or
her pro rata portion in each share of such Security held by the
Trust, there is no taxable gain or loss recognized upon such deemed
exchange pursuant to Section 1036 of the Code. If the Unit holder
receives whole shares of a particular Security plus cash in lieu
of a fractional share of such Security, and if the fair market
value of the Unit holder's pro rata portion of the shares of such
Security exceeds his tax basis in his pro rata portion of such
Security, taxable gain
Page 9
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 Security
which he receives as part of the In-Kind Distribution. Finally,
if a Unit holder's pro rata interest in a Security does not equal
a whole share, he may receive entirely cash in exchange for his
pro rata portion of a particular 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 Security.
Because the Trust will own many Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Security owned by the Trust.
In analyzing the tax consequences with respect to each Security,
such Unit holder must allocate the Distribution Expenses among
the Securities (the "Allocable Expenses"). The Allocable Expenses
will reduce the amount realized with respect to each Security
so that the fair market value of the shares of such 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 Security received will be increased by
the Allocable Expenses relating to such 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 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 (accrual of original issue discount on the Treasury Obligations
may not be subject to taxation or withholding provided certain
requirements are met). Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of original
issue discount and income dividends includable in the Unit holder's
gross income and amounts of Trust expenses which may be claimed
as itemized deductions.
Dividend income, long-term capital gains and accrual of original
issue discount may also be subject to state and local taxes. Investors
should consult their tax advisers for specific information on
the tax consequences of particular types of distributions.
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trust for New York tax matters, under the existing income
tax laws of the State of New York, the Trust is not an association
taxable as a corporation and the income of the Trust will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect
Page 10
to the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Treasury Obligations?
The Treasury Obligations deposited in the Trust consist of U.S.
Treasury bonds which have been stripped of their unmatured interest
coupons. The Treasury Obligations evidence the right to receive
a fixed payment at a future date from the U.S. Government, and
are backed by the full faith and credit of the U.S. Government.
Treasury Obligations are purchased at a deep discount because
the buyer obtains only the right to a fixed payment at a fixed
date in the future and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not
make current interest payments (such as the Treasury Obligations)
is that a fixed yield is earned not only on the original investment,
but also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income
on such obligations at a rate as high as the implicit yield on
the discount obligation, but at the same time eliminates the holder's
ability to reinvest at higher rates in the future. For this reason,
the Treasury Obligations are subject to substantially greater
price fluctuations during periods of changing interest rates than
are securities of comparable quality which make regular interest
payments. The effect of being able to acquire the Treasury Obligations
at a lower price is to permit more of the Trust's portfolio to
be invested in Equity Securities.
What are Equity Securities?
The Trust also consists of different issues of Equity Securities,
all of which are listed on a national securities exchange, the
NASDAQ National Market System or are traded in the over-the-counter
market. The Equity Securities consist of common stocks issued
by small capitalization companies. See "What are the Equity Securities
Selected for Select 1995 Growth & Treasury Securities Trust?"
for a general description of the companies.
Risk Factors. An investment in Units of the Trust should be made
with an understanding of the risks such an investment may entail.
The Trust consists of such of the Securities listed under "Schedule
of Investments" as may continue to be held from time to time in
the Trust and any additional Securities acquired and held by the
Trust pursuant to the provisions of the Trust Agreement together
with cash held in the Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Securities. However, should any contract for the
purchase of any of the 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
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 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.
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
Page 11
movements and to volatile increases and decreases of value as
market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations
regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction,
and global or regional political, economic or banking crises.
Shareholders of common stocks have rights to receive payments
from the issuers of those common stocks that are generally subordinate
to those of creditors of, or holders of debt obligations or preferred
stocks of, such issuers. Shareholders of common stocks of the
type held by the Trust have a right to receive dividends only
when and if, and in the amounts, declared by the issuer's board
of directors and have a right to participate in amounts available
for distribution by the issuer only after all other claims on
the issuer have been paid or provided for. Common stocks do not
represent an obligation of the issuer and, therefore, do not offer
any assurance of income or provide the same degree of protection
of capital as do debt securities. The issuance of additional debt
securities or preferred stock will create prior claims for payment
of principal, interest and dividends which could adversely affect
the ability and inclination of the issuer to declare or pay dividends
on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy.
The value of common stocks is subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the
value of the Equity Securities in the Portfolio may be expected
to fluctuate over the life of the Trust to values higher or lower
than those prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
In addition to the risks of investing in common stock, investments
in common stock of small capitalization companies tend to be riskier
and more volatile than investments in common stock of larger capitalized
companies and may not be suited for investors seeking income and
security. As a general definition, companies referred to as "micro
capitalization" companies typically have a market capitalization
between $10 and $50 million; "small capitalization" companies
between $50 and $500 million; and "mid capitalization" companies
between $500 million and $2.3 billion. In addition, small capitalization
companies generally have lower revenue than larger companies (i.e.,
less than $1.5 billion), and are often newly public companies
or in the early stages of their product cycle or in a niche-oriented
business and may be regionally limited companies (e.g., certain
banks and insurance companies).
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.
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. Officers and/or directors
of the Underwriter and/or members of their
Page 12
families may have a position in the Equity Securities of the Trust
and that position may be increased or decreased at any time at
their discretion. The Underwriter, its officers, directors and/or
their families may own options, rights or warrants of the Equity
Securities of the Trust. Certain officers or directors of the
Underwriter are on the Board of Directors of certain of the companies
whose Equity Securities are included in the Trust. The Underwriter
also from time to time may issue reports on and make recommendations
relating to equity securities, which may include the Equity Securities
of the Trust. The Underwriter has performed investment banking services
for certain of the issuers of the Equity Securities.
The Equity Securities for the Trust were selected by Perkins Capital
Management, Inc. The Equity Securities included for the Trust
were screened by John G. Kinnard's Research and Trading Departments
and then selected by Mr. Richard W. Perkins, C.F.A. Mr. Richard
W. Perkins is President of Perkins Capital Management, Inc., an
investment advisory firm located in Wayzata, Minnesota. Mr. Perkins
received a Bachelor's degree in 1955 and Master's degree in 1957
from the University of Wisconsin. He served as Assistant Endowment
Fund Manager at the Mayo Foundation, Pension Fund Manager at Standard
Oil Company of Ohio and Senior Vice President at Piper, Jaffray
& Hopwood, Inc., prior to founding Perkins Capital Management,
Inc. in 1985. In its investment advisory activities, Perkins Capital
Management, Inc. directs its investment focus toward companies
headquartered in the upper Midwest and particularly in Minnesota.
Mr. Perkins has served as a consultant with the Underwriter on
four other unit investment trusts.
What are the Equity Securities Selected for Select 1995 Growth
& Treasury Securities Trust?
Today's largest and most dominant companies were at one time small
cap companies. Because of their ability to provide a new product
or service, small cap companies were able to capture a commanding
or important market position, exhibiting growth rates during early
stages of development that were at times dramatic.
In our opinion, some of today's best positioned small cap companies
will experience similar growth and become tomorrow's industry
leaders. Over the long term, small cap companies have historically
produced greater returns than large cap companies. Of course,
past performance is no guarantee of future results. Investments
in small cap companies can have higher volatility with stock prices
trading in wider ranges than those of large cap companies. The
extra risks of investing in small cap companies may be reduced
by diversification.
Since 1944, John Kinnard & Co. has offered high-quality investment
opportunities to clients across the United States. As a full-service
securities firm, our reputation rests on our continued ability
to satisfy investors with very diverse financial goals.
We achieve these goals by working closely with each client and
by carefully selecting the right investment strategies. We understand
investment goals and objectives vary with each client. Therefore,
we implement a long-range program that involves comprehensive
analysis of a person's assets, various obligations and investment
objectives.
The following Equity Securities are included in the Trust:
Advance Circuits, Inc., headquartered in Minnetonka, Minnesota,
produces, designs and markets multilayer, single-sided, double-sided,
metal core, back panel and flex circuits. The circuits are used
in applications for computers and peripheral equipment, office
automation, telecommunications, industrial control and multimedia.
AirTran Corporation, headquartered in Minneapolis, Minnesota,
provides air transportation services through its wholly-owned
subsidiaries. Through Mesaba Aviation, Inc., the company serves
airports in the United States and one Canadian province from the
Minneapolis/St. Paul and Detroit, Michigan airports. Through AirTran
Airways, the company offers non-stop service from Orlando, Florida,
to Hartford, Connecticut; Huntsville, Alabama; Decatur, Illinois;
Knoxville, Tennessee; Newburgh, New York and Providence, Rhode
Island.
AVECOR Cardiovascular, Inc., headquartered in Plymouth, Minnesota,
designs, develops, manufactures and markets specialty medical
devices for heart/lung bypass surgery and long-term respiratory
support. The company's current products include disposable membrane
oxygenators, cardiotomy
Page 13
reservoirs and cardioplegia systems. AVECOR Cardiovascular, Inc.
markets its products in the United States and internationally
through third-party sales organizations.
Chronimed Inc., headquartered in Minnetonka, Minnesota, distributes
prescription drugs, medical products and educational materials
by mail order to patients with chronic conditions including diabetes
sufferers and organ transplant recipients.
CNS, Inc., headquartered in Chanhassan, Minnesota, manufactures
computer-based systems for brain wave and sleep monitoring analysis.
The company develops and markets products to improve patient monitoring
in the operating room and diagnostic capabilities in specific
clinical settings. A primary product is "Breath Right" which enhances
nasal breathing.
Communications Systems, Inc., headquartered in Hector, Minnesota,
produces and sells telephone station apparatus for telephone and
telephone interconnect companies, electrical distributors and
the retail market, which includes equipment used in the connection
of telephones and data terminals. Communications Systems, Inc.
manufactures value-added design and electronic assemblies for
original equipment manufacturers.
Community First Bankshares, Inc., headquartered in Fargo, North
Dakota, is a multi-bank holding company operating banks located
in Minnesota, North Dakota and South Dakota.
Computer Network Technology Corporation, headquartered in Minneapolis,
Minnesota, designs, manufactures, markets and supports Channel
Networking products. The company's products enable the high-speed
transmission of information among local and geographically dispersed
computing systems, primarily IBM, IBM compatible and peripheral
devices. The company's products are marketed to institutions,
corporations and the government.
Daig Corporation designs and produces medical devices such as
implantable pacemaker leads and disposable catheters and catheter
accessories, all of which are used in cardiovascular applications.
Daig Corporation is headquartered in Minnetonka, Minnesota, and
markets its products to hospitals throughout the world.
Department 56, Inc., headquartered in Eden Prairie, Minnesota,
designs, distributes and imports collectibles and specialty giftware
through gift and home accessory retailers in the United States.
The company's primary products are handcrafted ceramic and porcelain
houses and buildings sold under the "Village Series" name. The
company also offers other holiday and home decorative accessory
products, including the "Snowbabies" collection.
Digital Biometrics, Inc., headquartered in Minnetonka, Minnesota,
develops, produces and markets fingerprint recording and identification
products through electro-optical imaging machinery. A computer-based
electronic device known as "Tenprinter," which reads fingerprints
and creates a digital image, is sold to law enforcement agencies
and organizations which require fingerprints for identification
cards.
Fastenal Company is headquartered in Winona, Minnesota and operates
retail stores throughout the midwestern and southern states. The
stores sell threaded fasteners and other construction and industrial
supplies. The company targets customers in small- to medium-sized
cities.
Fingerhut Companies, Inc. markets consumer products through catalogs,
television and other media. The company's products include electronics,
home furnishings, men's and women's apparel and jewelry. Fingerhut
operates a food and gifts mail order business through its subsidiary,
Figi's, Inc. The company is headquartered in Minnetonka, Minnesota
and markets its products throughout the United States.
Grand Casinos, Inc., headquartered in Minneapolis, Minnesota,
develops and manages casinos (land-based and dockside) and bingo
facilities. The company owns and operates two casinos on the Mississippi
Gulf Coast, Grand Casino Gulfport and Grand Casino Biloxi. The
company also owns and operates Grand Casino Avoyelles in Marksville,
Louisiana. In addition, Grand Casinos manages two Indian-owned
casinos in Minnesota, Grand Casino Mille Lacs and Grand Casino
Hinckley.
Grist Mill Company is headquartered in Lakeville, Minnesota and
manufactures cereal, snack and confectionery products. The company
produces grain-based cereals, graham pie crusts and fruit snacks
under private label for "Kroger," "Giant," "A&P," "Pathmark" and
"Safeway" grocery chains. The company also sells groceries under
the "Grist Mill" name and candy bars under the name "GoodStuff."
Page 14
Grow Biz International, Inc. develops and franchises retail concepts
for stores that buy and sell new or used merchandise. The company
is headquartered in Minneapolis, Minnesota and its franchises
include "Play It Again Sports" and "Once Upon a Child." Grow Biz
plans to open a music franchise, "Music Go Round" and a computer
store, "Computer Renaissance."
Minntech Corporation manufactures medical supplies and devices
used in dialysis treatment, reprocessing and sterilants, and cardiovascular
surgery. The company's products include instruments that circulate
blood during hemodialysis and detect air in the bloodstream during
dialysis, as well as disinfecting and sterilization systems and
agents. The company, headquartered in Minneapolis, Minnesota,
also markets filtration devices for industrial water purification.
Norstan, Inc., headquartered in Maple Grove, Minnesota, markets,
installs, services and provides lease financing for private telecommunications
systems serving business and institutional clients primarily in
the upper midwest states of Minnesota, Wisconsin, Iowa, Nebraska
and North and South Dakota.
Polaris Industries Partners L.P., through Polaris Industries,
Inc., designs, engineers and manufactures utility and recreational
vehicles such as snowmobiles, all-terrain four-wheel vehicles
and personal water craft, as well as related accessories and clothing.
The company's primary vehicles are snowmobiles, which are manufactured
and sold directly to dealers in the United States and Canada.
The company is headquartered in Southampton, New York.
Regis Corporation is the largest specialty retail owner and operator
of hair salons in all fifty states, Canada, Mexico, Puerto Rico
and the United Kingdom. Headquartered in Minneapolis, Minnesota,
Regis Corporation is solidly established in high-profile mall
locations, where it provides hair care service and products in
two formats: Regis Hairstylists and MasterCuts. Regis Corporation
also sells a full line of hair care products.
Shuffle Master, Inc., headquartered in Northfield, Minnesota,
develops and markets automatic card shuffling systems for use
in card rooms, casinos, cruise ships and other gaming operations.
The company has three models of shufflers, one for dealing from
a "Shoe," one for dealing "Pai Gow" poker, and one for hand-held
dealing.
Techne Corporation manufactures and sells hematology and biotechnology
products for the clinical diagnostic market including hematology
controls and calibrators for use in blood cell counting instruments
and genes, cytokines, and diagnostic kits used in research for
the development of genetically engineered drugs. The company is
based out of Minneapolis, Minnesota.
Tower Automotive, Inc. designs and produces engineered metal stampings
and assemblies which are used by original equipment manufacturers
in the automotive industry. The company's products include floor
pan components, body pillars and major housing assemblies. Tower
Automotive, Inc. is headquartered in Minneapolis, Minnesota, and
its customers include Chrysler, Ford, Honda, Mazda, Nissan and
Toyota.
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, like the value of the Treasury
Obligations, will fluctuate over the life of the Trust and may
be more or less than the price at which they were deposited in
the Trust. The Equity Securities may appreciate or depreciate
in value (or pay dividends) depending on the full range of economic
and market influences affecting these securities. However, the
Sponsor believes that, upon termination of the Trust, even if
the Equity Securities deposited in the Trust are worthless, an
event which the Sponsor considers highly unlikely, the Treasury
Obligations will provide sufficient principal to at least equal
$1.00 per Unit (which is equal to the per Unit value upon maturity
of the Treasury Obligations). This feature of the Trust provides
Unit holders with principal protection, although they might forego
any earnings on the amount invested. To the extent that Units
are purchased at a price less than $1.00 per Unit, this feature
may also provide a potential for capital appreciation.
Page 15
Unless a Unit holder purchases Units of the Trust on the Initial
Date of Deposit (or another date when the value of the Units is
$1.00 or less), total distributions, including distributions made
upon termination of the Trust, may be less than the amount paid
for a Unit.
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 Treasury Obligation or Equity Securities will
not be delivered ("Failed Contract Obligations") to the Trust,
the Sponsor is authorized under the Indenture to direct the Trustee
to acquire other Treasury Obligations or Equity Securities ("Replacement
Securities"). Any Replacement Security deposited in the Trust
will, in the case of Treasury Obligations, have the same maturity
value and, as closely as can be reasonably acquired by the Sponsor,
the same maturity date or, in the case of Equity Securities, 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 Securities in the Trust and the issuance of a corresponding
number of additional Units.
The Trust consists of the 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
Securities acquired and held by the Trust pursuant to the provisions
of the Indenture (including provisions with respect to deposits
into the Trust of Securities in connection with the issuance of
additional Units).
Once all of the 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 Securities only under limited circumstances. See "How
May 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 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 Securities. The Sponsor is unable to predict whether any
such litigation will be instituted, or if instituted, whether
such litigation might have a material adverse effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
of the offering side evaluation of the Treasury Obligations in
the Trust and the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a sales charge of 5.5% (equivalent
to 5.82% of the net amount invested) divided by the number of
Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price
is based on the aggregate of the offering side evaluation of the
Treasury Obligations and the aggregate underlying value of the
Equity Securities in the Trust, plus or minus cash, if any, in
the Income and Capital Accounts of the Trust 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 based on the aggregate bid side evaluation of
the Treasury Obligations and the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any,
in the Income and Capital Accounts of the Trust, plus a maximum
sales charge of 5.5% of the Public Offering
Page 16
Price (equivalent to 5.82% of the net amount invested), subject
to reduction beginning , divided
by the number of outstanding Units of the Trust.
The minimum purchase of the Trust is $1,000. The applicable sales
charge is reduced by a discount as indicated below for volume
purchases:
<TABLE>
<CAPTION>
Primary and Secondary
_____________________
Percent of Percent of
Offering Net Amount
Number of Units Price Invested
_______________ __________ __________
<S> <C> <C>
100,000 but less than 500,000 0.60% 0.6036%
500,000 but less than 1,000,000 1.30% 1.3171%
1,000,000 or more 2.10% 2.1450%
</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 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 Securities.
During the initial offering period, the aggregate value of the
Units of the Trust shall be determined (a) on the basis of the
offering prices of the Treasury Obligations and the aggregate
underlying value of the Equity Securities therein plus or minus
cash, if any, in the Income and Capital Accounts of the Trust,
(b) if offering prices are not available for the Treasury Obligations,
on the basis of offering prices for comparable securities, (c)
by determining the value of the Treasury Obligations on the offer
side of the market by appraisal, or (d) by any combination of
the above. The 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 price on the over-the-counter market (unless
it is determined that these prices are inappropriate as a basis
for evaluation). If current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of current ask prices
for comparable securities, (b) by appraising the value of the
Equity Securities on the ask side of the market or (c) by any
combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the bid price per
Unit of the Treasury Obligations and 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. The offering price of the Treasury Obligations
in the Trust may be expected to be greater than the bid price
of the Treasury Obligations by less than 2%.
Page 17
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 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
Securities in the Trust and create additional Units. Units reacquired
by the Sponsor during the initial offering period (at prices based
upon the aggregate offering price of the Treasury Obligations
and 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 3.6% of the Public Offering Price, and, for secondary
market sales, 3.6% of the Public Offering Price (or 65% of the
then current maximum sales charge after
). Effective on each
, commencing , the
sales charge will be reduced by 1/2 of 1% to a minimum of 3.5%.
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 second preceding sentence.
Under the Glass-Steagall Act, banks are prohibited from underwriting
Trust Units; however, the Glass-Steagall Act does permit certain
agency transactions and the banking regulators have not indicated
that these particular agency transactions are not permitted under
such Act. In Texas and in certain other states, any banks making
Units available must be registered as broker/dealers under state
law. Any broker/dealer or bank will receive additional concessions
for purchases made from the Sponsor or Underwriter on the Initial Date of
Deposit resulting in total concessions as contained in the following table:
Total Concessions (Per Unit)*
$250,000-499,999 $500,000-999,999 $1,000,000 or more
Purchased Purchased Purchased
3.7% 3.8% 4.0%
* The applicable concession will be allotted to broker/dealers
or banks who purchase Units from the Sponsor or Underwriter only on the Date
of Deposit of the Trust.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission
equal to 5.5% of the Public Offering Price of the Units (equivalent
to 5.82% 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
Page 18
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
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 5.5% subject to reduction beginning
) 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 it is not obligated
to do so, both the Sponsor and the 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
bid price of the Treasury Obligations in the Portfolio of the
Trust and the aggregate underlying value of the Equity Securities
in the Trust plus or minus cash, if any, in the Income and Capital
Accounts of the Trust. All expenses incurred in maintaining a
secondary market, other than the fees of the Evaluator and the
costs of the Trustee in transferring and recording the ownership
of Units, will be borne by the Sponsor. If the supply of Units
exceeds demand, or for some other business reason, the Sponsor
may discontinue purchases of Units at such prices. IF A UNIT HOLDER
WISHES TO DISPOSE OF HIS UNITS, HE SHOULD INQUIRE OF THE SPONSOR
AS TO CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION
TO THE TRUSTEE.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
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
Page 19
be presented to the Trustee and no certificate will be issued
upon the transfer unless requested by the Unit holder. A Unit
holder may at any time request the Trustee to issue certificates
for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted
interest on the Treasury Obligations) 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." The pro rata share
of cash in the Capital Account of each Trust will be computed
as of the first day of each month. Proceeds received on the sale
of any 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 each month if the amount available for distribution
equals at least $0.001 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. Income with
respect to the original issue discount on the Treasury Obligations
in the Trust will not be distributed currently, although Unit
holders will be subject to Federal income tax as if a distribution
had occurred. See "What is the Federal Tax Status of Unit Holders?"
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; (ii) a pro rata share of the amounts realized
upon the disposition of the Treasury Obligations; and (iii) a
pro rata share of any other assets of the Trust, less expenses
of the Trust, subject to the limitation that Treasury Obligations
may not be sold to pay for Trust expenses. Not less than 60 days
prior to the Treasury Obligations Maturity Date the Trustee will
provide written notice thereof to all Unit holders and will include
with such notice a form to enable Unit holders to elect a distribution
of shares of Equity Securities (an "In-Kind Distribution"), if
such Unit holder owns at least 25,000 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 Treasury
Obligations Maturity Date. Not less than 60 days prior to the
termination of the Trust, those Unit holders with at least 25,000
Units will be offered the option of having the proceeds from the
Equity Securities distributed "in-kind," or they will be paid
in cash, as indicated above. A Unit holder may, of course, at
any time after the Equity Securities are distributed, sell all
or a portion of the shares.
Page 20
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 Securities sold during the year and the
Securities held at the end of such year by the Trust; (3) the
redemption price per Unit based upon a computation thereof on
the 31st day of December of such year (or the last business day
prior thereto); and (4) amounts of income and capital 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 the 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.
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 Securities of the Trust in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might
otherwise be realized. Equity Securities will be sold to meet
redemptions of Units before Treasury Obligations, although Treasury
Obligations may be sold if the Trust is assured of retaining a
sufficient principal amount of Treasury Obligations to provide
funds upon maturity of the Trust at least equal to $1.00 per Unit.
Page 21
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Treasury Obligations and the 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, while
the Public Offering Price per Unit during the initial offering
period will be determined on the basis of the offering price of
such Treasury Obligations, as of the close of trading on the New
York Stock Exchange on the date any such determination is made
and the aggregate underlying value of the Equity Securities in
the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust. On the Initial Date of Deposit the Public
Offering Price per Unit (which is based on the offering prices
of the Treasury Obligations and the aggregate underlying value
of the Equity Securities in the Trust and includes the sales charge)
exceeded the Unit value at which Units could have been redeemed
(based upon the current bid prices of the Treasury Obligations
and the aggregate underlying value of the Equity Securities in
the Trust) by the amount shown under "Summary of Essential Information."
The Redemption Price per Unit is the pro rata share of each Unit
determined by the Trustee by adding: (1) the cash on hand in the
Trust other than cash deposited in the Trust to purchase Securities
not applied to the purchase of such Securities; (2) the aggregate
value of the Securities (including "when issued" contracts, if
any) held in the Trust, as determined by the Evaluator on the
basis of bid prices of the Treasury Obligations and the aggregate
underlying value of the Equity Securities in the Trust next computed;
and (3) dividends receivable on Equity Securities trading ex-dividend
as of the date of computation; and deducting therefrom: (1) amounts
representing any applicable taxes or governmental charges payable
out of the Trust; (2) an amount representing estimated accrued
expenses of the Trust, including but not limited to fees and expenses
of the Trustee (including legal and auditing fees), the Evaluator
and supervisory fees, if any; (3) cash held for distribution to
Unit holders of record of the Trust as of the business day prior
to the evaluation being made; and (4) other liabilities incurred
by the Trust; and finally dividing the results of such computation
by the number of Units of the Trust outstanding as of the date
thereof.
The 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 price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor 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
Page 22
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 Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that the issuer of the Equity Security has breached
a covenant which would affect the payments of dividends, the credit
standing of the issuer or otherwise impair the sound investment
character of the Equity Security, that the issuer has defaulted
on the payment on any other of its outstanding obligations, that
the price of the Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to the Trust. Treasury Obligations may be sold by the Trustee
only pursuant to the liquidation of the Trust or to meet redemption
requests. Except as stated under "Portfolio-What are Some Additional
Considerations for Investors?" For Failed Contract Obligations,
the acquisition by the Trust of any securities other than the
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
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 Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose
of redeeming Units of the Trust tendered for redemption and the
payment of expenses; provided however, that in the case of Securities
sold to meet redemption requests, Treasury Obligations may only
be sold if the Trust is assured of retaining a sufficient principal
amount of Treasury Obligations to provide funds upon maturity
of the Trust at least equal to $1.00 per Unit. Treasury Obligations
may not be sold by the Trustee to meet Trust expenses.
The Sponsor, in designating Equity Securities to be sold by the
Trustee, will generally make selections in order to maintain,
to the extent practicable, the proportionate relationship among
the number of shares of individual issues of Equity Securities.
To the extent this is not practicable, the composition and diversity
of the Equity Securities may be altered. In order to obtain the
best price for 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 SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds, The First Trust GNMA, Templeton Growth and Treasury
Trust, Templeton Foreign Fund & U.S. Treasury Securities Trust
and The Advantage Growth and Treasury Securities Trust. First
Trust introduced the first insured unit investment trust in 1974
and to date more than $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
Page 23
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
principle 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 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 Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Page 24
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois
60532. The Evaluator may resign or may be removed by the Sponsor
and the Trustee, in which event the Sponsor and the Trustee are
to use their best efforts to appoint a satisfactory successor.
Such resignation or removal shall become effective upon the acceptance
of appointment by the successor Evaluator. If upon resignation
of the Evaluator no successor has accepted appointment within
30 days after notice of resignation, the Evaluator may apply to
a court of competent jurisdiction for the appointment of a successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for
the accuracy thereof. Determinations by the Evaluator under the
Indenture shall be made in good faith upon the basis of the best
information available to it, provided, however, that the Evaluator
shall be under no liability to the Trustee, Sponsor or Unit holders
for errors in judgment. This provision shall not protect the Evaluator
in any case of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the Indenture which may be defective or inconsistent with any
other provision contained therein, or (2) to make such other provisions
as shall not adversely affect the interest of the Unit holders
(as determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the
maturity, redemption or other disposition of the last of the Treasury
Obligations held in the Trust, but in no event beyond the Mandatory
Termination Date indicated 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 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 Sponsor. If the Trust is liquidated because of the redemption
of unsold Units of the Trust, the Sponsor will refund to each
purchaser of Units of the Trust the entire sales charge paid by
such purchaser. In the event of termination, written notice thereof
will be sent by the Trustee to all Unit holders of the Trust.
Within a reasonable period after termination, the Trustee will
follow the procedures set forth under "How are Income and Capital
Distributed?"
Commencing on the Treasury Obligations Maturity 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 Treasury Obligations Maturity Date
the Trustee will provide written notice thereof to all Unit holders
and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Equity Securities (reduced
by customary transfer and registration charges), if such Unit
holder owns at least 25,000 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. All Unit holders will receive their pro rata
portion of the Treasury Obligations in cash upon the termination
of the Trust. To be effective, the election form, together with
surrendered certificates and other documentation required by the
Trustee, must be returned to the Trustee at least five business
days prior to the Treasury Obligations Maturity Date. Unit holders
not electing a distribution of shares of Equity Securities will
receive a cash distribution from the sale of the remaining Securities
within a reasonable time after the Trust is terminated. Regardless
of the distribution involved, the Trustee will deduct from the
funds of the Trust any accrued costs, expenses, advances or indemnities
provided by the Trust Agreement, including estimated compensation
of the Trustee and costs of liquidation and any amounts required
as a reserve to provide for payment of any applicable taxes or
other governmental charges. Any sale of Securities in the Trust
upon termination may result
Page 25
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
John G. Kinnard 920 Second Ave. South, Minneapolis, MN 55402
& Co., Incorporated
=========
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became
the owner of the Units of the Trust and entitled to the benefits
thereof, as well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the
Units of the Trust will be made at the Public Offering Price described
in the prospectus. Units may also be sold to or through dealers
and others during the initial offering period and in the secondary
market at prices representing a concession or agency commission
as described in "Public Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the
Trust as they become available. The Sponsor will receive from
the Underwriter the difference between the gross sales concession
and % of the Public Offering Price of the Units, which
is retained by the Underwriter.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of an Underwriter or
dealer may be eligible to win other nominal awards for certain
sales efforts, or under which the Sponsor will reallow to any
such Underwriter or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor
pay fees to qualifying Underwriters or dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that the Trust will receive from the Units
sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on the Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the
Page 26
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 27
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 112
We have audited the accompanying statement of net assets, including
the schedule of investments, of The First Trust Special Situations
Trust, Series 112, comprised of Select 1995 Growth & Treasury
Securities Trust, as of the opening of business on
, 1995. 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 , 1995. 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 112, comprised
of Select 1995 Growth & Treasury Securities Trust, at the opening
of business on , 1995 in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1995
Page 28
Statement of Net Assets
Select 1995 Growth & Treasury Securities Trust
The First Trust Special Situations Trust, Series 112
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase
contracts (1) (2) $
==========
Units outstanding
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $
Less sales charge (3)
__________
Net Assets $
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on offering side evaluations of the Treasury
Obligations and the aggregate underlying value of the Equity Securities.
(2) An irrevocable letter of credit totaling $ issued
by Bankers Trust Company has been deposited with the Trustee covering
the monies necessary for the purchase of the Securities pursuant
to contracts for the purchase of such Securities.
(3) The aggregate cost to investors includes a sales charge computed
at the rate of 5.5% of the Public Offering Price (equivalent to
5.82% of the net amount invested), assuming no reduction of sales
charge for quantity purchases.
Page 29
Schedule of Investments
Select 1995 Growth & Treasury Securities Trust
The First Trust Special Situations Trust, Series 112
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Market
Approximate Value per
Percentage of Share of Cost of
Maturity Aggregate Equity Securities
Value Name of Issuer and Title of Security (1) Offering Price (3) Securities to Trust (2)
________ ________________________________________ __________________ __________ ____________
<C> <S> <C> <C> <C>
$ Zero coupon U.S. Treasury bonds % $
maturing
Number Ticker Symbol and
of Shares Name of Issuer of Equity Securities
__________ ___________________________________
ADVC Advance Circuits, Inc. 1-2%
ATCC AirTran Corporation 1-2%
AVEC AVECOR Cardiovascular, Inc. 1-2%
CHMD Chronimed Inc. 1-2%
CNXS CNS, Inc. 1-2%
CSII Communications Systems, Inc. 1-2%
CFBX Community First Bankshares, Inc. 1-2%
CMNT Computer Network Technology
Corporation 1-2%
DAIG Daig Corporation 1-2%
DFS Department 56, Inc. 1-2%
DBII Digital Biometrics, Inc. 1-2%
FAST Fastenal Company 1-2%
FHT Fingerhut Companies, Inc. 1-2%
GND Grand Casinos, Inc. 1-2%
GRST Grist Mill Company 1-2%
GBIZ Grow Biz International, Inc. 1-2%
MNTX Minntech Corporation 1-2%
NRRD Norstan, Inc. 1-2%
SNO Polaris Industries Partners L.P. 1-2%
RGIS Regis Corporation 1-2%
SHFL Shuffle Master, Inc. 1-2%
TECH Techne Corporation 1-2%
TWER Tower Automotive, Inc. 1-2%
________ ____________
Total Equity Securities %
________ ____________
Total Investment 100% $
======== ============
</TABLE>
[FN]
________________
(1) The Treasury Obligations are being purchased at a discount
from their par value because there is no stated interest income
thereon (such securities are often referred to as zero coupon
U.S. Treasury bonds). Over the life of the Treasury Obligations
the value increases, so that upon maturity the holders will receive
100% of the principal amount thereof.
All securities are represented by regular way contracts to purchase
such securities for the performance of which an irrevocable letter
of credit has been deposited with the Trustee. The contracts to
purchase securities were entered into by the Sponsor on .
(2) The cost of the securities to the Trust represents the offering
side evaluation as determined by the Evaluator, an affiliate of
the Sponsor, with respect to the Treasury Obligations and the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of listed
Equity Securities and the ask prices of over-the-counter traded
Equity Securities on the business day preceding the Initial Date
of Deposit). The offering side evaluation of the Treasury Obligations
is greater than the bid side evaluation of such Treasury Obligations
which is the basis on which the Redemption Price per Unit will
be determined after the initial offering period. The aggregate
value,
Page 30
based on the bid side evaluation of the Treasury Obligations
and the aggregate underlying value of the Equity Securities on
the Initial Date of Deposit, was $. Cost and profit to the Sponsor
relating to the purchase of the Treasury Obligations sold to the
Trust were $ and $ , respectively. Cost and
loss to Sponsor relating to the purchase of the Equity Securities
sold to the Trust were $ and $ , respectively.
(3) The portfolio will contain additional Equity Securities each
of which will not exceed approximately 2% of the Aggregate Offering
Price for Equity Securities. Although it is not the Sponsor's
intention, certain of the Equity Securities listed above may not
be included in the final portfolio. Also, the percentages of the
Aggregate Offering Price for the Equity Securities are approximate
amounts and may vary in the final portfolio.
Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 4
Select 1995 Growth & Treasury Securities Trust,
The First Trust Special Situations Trust, Series 112:
What is The First Trust Special Situations Trust? 5
What are the Expenses and Charges? 6
What is the Federal Tax Status of Unit Holders? 7
Why are Investments in the Trust Suitable for
Retirement Plans? 10
Portfolio:
What are Treasury Obligations? 11
What are Equity Securities? 11
Risk Factors 11
What are the Equity Securities Selected for
Select 1995 Growth & Treasury Securities Trust? 13
What are Some Additional Considerations
for Investors? 15
Public Offering:
How is the Public Offering Price Determined? 16
How are Units Distributed? 18
What are the Sponsor's and Underwriter's
Profits? 18
Will There be a Secondary Market? 19
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 19
How are Income and Capital Distributed? 20
What Reports will Unit Holders Receive? 21
How May Units be Redeemed? 21
How May Units be Purchased by the Sponsor or
Underwriter? 22
How May Securities be Removed from the Trust? 23
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 23
Who is the Trustee? 24
Limitations on Liabilities of Sponsor and Trustee 24
Who is the Evaluator? 25
Other Information:
How May the Indenture be Amended or
Terminated? 25
Legal Opinions 26
Experts 26
Underwriting 26
Report of Independent Auditors 28
Statement of Net Assets 29
Schedule of Investments 30
</TABLE>
______________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE 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.
John G. Kinnard & Co., Inc.
Select 1995
Growth & Treasury
Securities Trust
John G. Kinnard & Co., Inc.
Kinnard Financial Center
920 Second Ave. South
Minneapolis, MN 55402
(800) 444-7884
(612) 370-2700
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
, 1995
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 112
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 110, which is the
current fund, and The First Trust Special Situations Trust,
Series 112, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds comprising
the Fund, the evaluation, record and distribution dates and other
changes pertaining specifically to the new series, such as size
and number of Units in the Fund and the statement of condition of
the new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 110 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
112 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Village of Lisle and State of Illinois on December 22, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 112
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director of
Nike Securities December 22, 1994
Corporation, the
General Partner of
Nike Securities L.P. Carlos E. Nardo
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Special
Situations Trust, Series 18 (File No. 33-42683) and the same
is hereby incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and to
the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF 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 is
filed as Exhibit 4.1 to the Registration Statement
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 18 and
subsequent Series effective October 15, 1991 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and Nike Financial Advisory
Services L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.1.1* Form of Trust Agreement for Series 112 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 Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
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).
___________________________________
* To be filed by amendment.
S-5
