Registration No. 33-57741
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 116
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
NIKE SECURITIES L.P.
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agent for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered:
Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2):
$500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on March 16, 1995 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 116
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 ITEM NUMBER FORM S-6 HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
periodic payment plan certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Auditors, Statement
Form S-6) of Net Assets
*Inapplicable, answer negative or not required.
California Growth & Treasury Securities Trust, Series 1
Pennsylvania Growth & Treasury Securities Trust, Series 2
The Trusts. The First Trust (registered trademark) Special Situations
Trust, Series 116 consists of the underlying separate unit investment
trusts set forth above. The various trusts are sometimes collectively
referred to herein as the "Trusts."
The California Growth & Treasury Securities Trust, Series 1 is
a unit investment trust consisting of a portfolio containing zero
coupon U.S. Treasury bonds and common stocks issued by companies
which are incorporated or headquartered in the State of California.
The Pennsylvania Growth & Treasury Securities Trust, Series 2
is a unit investment trust consisting of a portfolio containing
zero coupon U.S. Treasury bonds and common stocks issued by companies
which are incorporated or headquartered in the Commonwealth of
Pennsylvania.
The objectives of the Trusts are to protect Unit holders' capital
and provide potential for capital appreciation or income by investing
a portion of their portfolios in zero coupon U.S. Treasury bonds
("Treasury Obligations"), and the remainder of the Trusts' portfolios
in common stocks ("Equity Securities"). Collectively, the Treasury
Obligations and the Equity Securities are referred to herein as
the "Securities." See "Schedule of Investments" for each Trust.
The Trusts have 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 Trusts,
whose net asset values will fluctuate and, prior to maturity,
may be worth more or less than a purchaser's acquisition cost.
There is, of course, no guarantee that the objectives of the Trusts
will be achieved.
Each Unit of a Trust represents an undivided fractional interest
in all the Securities deposited in such Trust. The Trusts have
been organized so that purchasers of Units should receive, at
the termination of the Trusts, an amount per Unit at least equal
to $10.00 (which is equal to the per Unit value upon maturity
of the Treasury Obligations), even if the Trusts 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 Trusts provides Unit holders who purchase Units at a price
of $10.00 or less per Unit with total principal protection, including
any sales charges paid, although they might forego any earnings
on the amount invested. To the extent that Units are purchased
at a price less than $10.00 per Unit, this feature may also provide
a potential for capital appreciation. As a result of the volatile
nature of the market for zero coupon U.S. Treasury bonds, Units
sold or redeemed prior to maturity will fluctuate in price and
the underlying Treasury Obligations may be valued at a price greater
or less than their value as of the Initial Date of Deposit. UNIT
HOLDERS DISPOSING OF THEIR UNITS PRIOR TO THE MATURITY OF THE
TRUSTS MAY RECEIVE MORE OR LESS THAN $10.00 PER UNIT, DEPENDING
ON MARKET CONDITIONS ON THE DATE UNITS ARE SOLD OR REDEEMED.
The Treasury Obligations deposited in the California Growth &
Treasury Securities Trust, Series 1 on the Initial Date of Deposit
will mature on November 15, 2006 (the "Treasury Obligations Maturity
Date"). The Treasury Obligations deposited in the Pennsylvania
Growth & Treasury Securities Trust, Series 2 on the
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
First Trust (registered trademark)
The date of this Prospectus is March 16, 1995
Page 1
Initial Date of Deposit will mature on November 15, 2006 (the
"Treasury Obligations Maturity Date"). The Treasury Obligations
in the Trusts have a maturity value equal to or greater than the
aggregate Public Offering Price (which includes the sales charge)
of the Units of the Trusts on the Initial Date of Deposit. The
Equity Securities deposited in the Trusts' portfolios 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 Trusts. See "Portfolio."
The Sponsor may, from time to time during a period of up to approximately
360 days after the Initial Date of Deposit, deposit additional
Securities in the Trusts, provided it maintains the original percentage
relationship between the Treasury Obligations and Equity Securities
in the Trusts' portfolios. 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 $10.00,
and that the original proportionate relationship amongst the individual
issues of the Equity Securities shall be maintained. Any difference
may be due to the sale, redemption or liquidation of any Securities
deposited in the Trusts 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 Trusts?"
Public Offering Price. The Public Offering Price per Unit of a
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 such 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 such 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
a 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 such Trust plus a maximum
sales charge of 5.5% (equivalent to 5.82% of the net amount invested),
subject to reduction beginning April 1, 1996. The minimum purchase
for each Trust is $1,000. The sales charge for each Trust is reduced
on a graduated scale for sales involving at least 10,000 Units.
See "How is the Public Offering Price Determined?"
Dividend and Capital Distributions. Distributions of dividends
and capital, if any, received by the Trusts 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 Trusts. 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 Trusts, the Trustee will distribute, upon surrender of Units
for redemption, to each Unit holder his pro rata share of the
Trusts' assets, less expenses, in the manner set forth under "Rights
of Unit Holders-How are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor may maintain a
market for Units of the Trusts 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 a 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 such 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
a 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 such Trust. If a secondary market is not
maintained, a Unit holder may redeem Units through redemption at
Page 2
prices based upon the aggregate bid price of the Treasury Obligations
plus the aggregate underlying value of the Equity Securities in
a 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 such 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 Trusts. The Sponsor will determine the manner,
timing and execution of the sale of the Equity Securities. Written
notice of any termination of the Trusts 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 Trusts
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 2,500 Units of a 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 a 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 Trusts
are terminated. See "Rights of Unit Holders-How are Income and
Capital Distributed?"
Risk Factors. An investment in the Trusts 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 Trusts or the general condition of
the stock market, volatile interest rates or an economic recession.
The Trusts are not actively managed and Equity Securities will
not be sold by the Trusts 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-March 16, 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
California
Growth & Treasury
Securities Trust
Series 1
_________________
General Information
<S> <C>
Aggregate Maturity Value of Treasury Obligations Initially Deposited $ 500,000
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $ 425,160
Aggregate Offering Price Evaluation of Securities per Unit $ 8.5032
Sales Charge of 5.5% of the Public Offering Price per Unit,
(5.82% of the net amount invested) $ .4949
Public Offering Price per Unit (2) $ 8.9981
Sponsor's Initial Repurchase Price per Unit $ 8.5032
Redemption Price per Unit (based on bid price evaluation of
underlying Treasury Obligations and aggregate underlying
value of Equity Securities) $.5046 less than Public
Offering Price per Unit; $.0097 less than Sponsor's
Initial Repurchase Price per Unit (3) $ 8.4935
</TABLE>
CUSIP Number 33734W 749
First Settlement Date March 23, 1995
Treasury Obligations Maturity Date November 15, 2006
Mandatory Termination Date November 15, 2006
Trustee's Annual Fee $0.0090 per Unit outstanding.
Evaluator's Annual Fee $0.0030 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 $0.0025 per Unit out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date Fifteenth day of each June and
December, commencing June 15, 1995.
Income Distribution Date (5) Last day of each June and December,
commencing June 30, 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) The Sponsor will also be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of
$0.0010 per Unit.
(5) Distributions from the Capital Account, 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 $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 4
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-March 16, 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
Pennsylvania
Growth & Treasury
Securities Trust
Series 2
_________________
General Information
<S> <C>
Aggregate Maturity Value of Treasury Obligations Initially Deposited $ 500,000
Initial Number of Units 50,000
Fractional Undivided Interest in the Trust per Unit 1/50,000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (1) $ 425,222
Aggregate Offering Price Evaluation of Securities per Unit $ 8.5044
Sales Charge of 5.5% of the Public Offering Price per Unit,
(5.82% of the net amount invested) $ .4950
Public Offering Price per Unit (2) $ 8.9994
Sponsor's Initial Repurchase Price per Unit $ 8.5044
Redemption Price per Unit (based on bid price evaluation of
underlying Treasury Obligations and aggregate underlying
value of Equity Securities) $.5046 less than Public
Offering Price per Unit; $.0096 less than Sponsor's
Initial Repurchase Price per Unit (3) $ 8.4948
</TABLE>
CUSIP Number 33734W 764
First Settlement Date March 23, 1995
Treasury Obligations Maturity Date November 15, 2006
Mandatory Termination Date November 15, 2006
Trustee's Annual Fee $0.0090 per Unit outstanding.
Evaluator's Annual Fee $0.0030 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 $0.0025 per Unit out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date Fifteenth day of each June and
December, commencing June 15, 1995.
Income Distribution Date (5) Last day of each June and December,
commencing June 30, 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) The Sponsor will also be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of
$0.0010 per Unit.
(5) Distributions from the Capital Account, 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 $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 5
California Growth & Treasury Securities Trust, Series 1
Pennsylvania Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 116
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 116 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. This Series consists of underlying
separate unit investment trusts designated as: California Growth
& Treasury Securities Trust, Series 1 and Pennsylvania Growth
& Treasury Securities Trust, Series 2 (collectively, the "Trusts,"
and each individually, a "Trust"). The Series was created under
the laws of the State of New York pursuant to a Trust Agreement
(the "Indenture"), dated the Initial Date of Deposit, with Nike
Securities L.P., as Sponsor, United States Trust Company of New
York, as Trustee, First Trust Advisors L.P., as Portfolio Supervisor
and FT Evaluators L.P., as 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 Trusts, the Trustee delivered to the Sponsor documents
evidencing the entire ownership of the Trusts.
The objectives of the California Growth & Treasury Securities
Trust, Series 1 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 companies incorporated or headquartered in the State
of California. The objectives of the Pennsylvania Growth & Treasury
Securities Trust, Series 2 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 companies incorporated or headquartered
in the Commonwealth of Pennsylvania. See "What are Equity Securities?"
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 Trusts, whose net asset
values 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 Trusts are referred to
herein as the "Securities." There is, of course, no guarantee
that the objectives of the Trusts 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 each 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 Trusts 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 Trusts. Any additional Securities deposited in a Trust will
maintain, as nearly as is practicable, the original proportionate
relationship of the Treasury Obligations and Equity Securities
in such 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 $10.00, 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 Trusts
on the Initial, or any subsequent, Date of Deposit. See "How May
Securities be Removed from the Trusts?"
Page 6
On a cost basis to the California Growth & Treasury Securities
Trust, Series 1, the original percentage relationship on the Initial
Date of Deposit was approximately 50.50% Treasury Obligations
and approximately 49.50% Equity Securities. On a cost basis to
the Pennsylvania Growth & Treasury Securities Trust, Series 2,
the original percentage relationship on the Initial Date of Deposit
was approximately 50.49% Treasury Obligations and approximately
49.51% Equity Securities. The original percentage relationship
of each Equity Security to a Trust is set forth herein under "Schedule
of Investments" for each Trust. 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 a Trust.
On the Initial Date of Deposit, each Unit of a Trust represented
the undivided fractional interest in the Securities deposited
in such Trust set forth under "Summary of Essential Information."
The Trusts have been organized so that purchasers of Units should
receive, at the termination of each Trust, an amount per Unit
at least equal to $10.00 per Unit (which is equal to the per Unit
value upon maturity of the Treasury Obligations), even if the
Equity Securities never paid a dividend and the value of the Equity
Securities in the Trusts 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 Trusts as are necessary to maintain a maturity value of
the Units of the Trusts at least equal to $10.00 per Unit. The
receipt of only $10.00 per Unit upon the termination of a 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 $10.00 per Unit as of the
termination of each Trust would be approximately $4.29 per Unit
for the California Growth & Treasury Securities Trust, Series
1 and approximately $4.29 per Unit for the Pennsylvania Growth
& Treasury Securities Trust, Series 2 (the present value is indicated
by the amount per Unit which is invested in Treasury Obligations).
Furthermore, the $10.00 per Unit in no respect protects investors
against diminution in the purchasing power of their investment
due to inflation (although expectations concerning inflation are
a component in determining prevailing interest rates, which in
turn determine present values). If inflation were to occur at
the rate of 5% per annum during the period ending at the termination
of each Trust, the present dollar value of $10.00 per Unit at
the termination of each Trust would be approximately $5.59 per
Unit for the California Growth & Treasury Securities Trust, Series
1 and approximately $5.59 per Unit for the Pennsylvania Growth
& Treasury Securities Trust, Series 2. To the extent that Units
of the Trusts are redeemed, the aggregate value of the Securities
in a Trust will be reduced and the undivided fractional interest
represented by each outstanding Unit of such Trust will increase.
However, if additional Units are issued by a Trust in connection
with the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in such Trust will be increased
by amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit of such Trust will be decreased
proportionately. See "How May Units be Redeemed?" The Trusts have
a Mandatory Termination Date as set forth herein under "Summary
of Essential Information."
What are the Expenses and Charges?
At no cost to the Trusts, the Sponsor has borne all the expenses
of creating and establishing the Trusts, 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 Trusts, 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 Trusts. 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 these Trusts, 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
Page 7
the amount set forth under "Summary of Essential Information,"
for providing portfolio supervisory services for the Trusts. Such
fee is based on the number of Units outstanding in each 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. Each fee may exceed the actual costs of providing
such supervisory services for these Trusts, 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.
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 these Trusts, 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 FT Evaluators L.P. of supplying such services in such year.
The Trustee pays certain expenses of the Trusts for which it is
reimbursed by the Trusts. The Trustee will receive for its ordinary
recurring services to the Trusts an annual fee computed at $0.0090
per annum per Unit in each Trust outstanding based upon the largest
aggregate number of Units of such 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 Trusts to the extent funds are available and then
from the Capital Account of the Trusts. 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 Trusts 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
Trusts: 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 Trusts 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 Trusts; 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 Trusts; all taxes and
other government charges imposed upon the Securities or any part
of the Trusts (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 Trusts. In addition, the
Trustee is empowered to sell Securities in a 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 such
Trust except that the Trustee shall not sell Treasury Obligations
to pay a Trust's 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 a
Trust. As described above, if dividends are insufficient to cover
expenses, it is likely that Equity Securities will have to be
sold to meet such Trust's 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 each Trust to be audited on an annual basis
at the expense of such Trust by independent auditors selected
by the Sponsor. So long as the Sponsor is making a secondary market
for the Units of a Trust, the Sponsor is required to bear the
cost of such annual audit to the extent such cost exceeds
Page 8
$0.0050 per Unit for such Trust. Unit holders of a 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 Trusts.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. Each 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 a Trust under
the Code; and the income of each 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 a Trust.
2. Each Unit holder will have a taxable event when a 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 a 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 such Trust. The Treasury Obligations held by
the Trusts 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 Trusts 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 a 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 a 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 a
Trust will generally be considered a capital gain except in the
case of a dealer or a financial
Page 9
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
a 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 deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by a 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 a 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 a Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when a Security is
disposed of by a 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 for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Tax Act, the Tax Act includes a provision
that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993.
Unit holders and prospective investors should consult with their
tax advisers regarding the potential effect of this provision
on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Termination
of a Trust. As discussed in "Rights of Unit Holders-How are Income
and Capital Distributed?", under certain circumstances a Unit
holder who owns at least 2,500 Units of a Trust may request an
In-Kind Distribution upon the termination of such 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 a 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 a Trust, a Unit holder is considered as
owning a pro rata portion of each of
Page 10
such Trust's assets for Federal income tax purposes. The receipt
of an In-Kind Distribution upon the termination of a 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 such 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 a 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 a
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 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 each 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 such 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 a 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 a Trust to such
Unit holder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by
a 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.
Page 11
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 Trusts Suitable for Retirement Plans?"
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trusts for New York tax matters, under the existing income
tax laws of the State of New York, each Trust is not an association
taxable as a corporation and the income of such Trust will be
treated as the income of the Unit holders thereof.
Why are Investments in the Trusts Suitable for Retirement Plans?
Units of the Trusts may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIOs
What are Treasury Obligations?
The Treasury Obligations deposited in the Trusts 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 Trusts' portfolios to
be invested in Equity Securities.
What are Equity Securities?
The Trusts also consist 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 of the California Growth & Treasury
Securities Trust, Series 1 consist of common stocks issued by
companies incorporated or headquartered in the State of California.
The stocks chosen for the portfolio were selected for their growth
potential and diversification within the State of California.
See "What are the Equity Securities Selected for California Growth
& Treasury Securities Trust, Series 1?" for a general description
of the companies.
The Equity Securities of the Pennsylvania Growth & Treasury Securities
Trust, Series 2 consist of common stocks issued by companies incorporated
or headquartered in the Commonwealth of Pennsylvania. The stocks
chosen for the portfolio were selected for their growth potential
and diversification within the Commonwealth of Pennsylvania. See
"What are the Equity Securities Selected for Pennsylvania Growth
& Treasury Securities Trust, Series 2?" for a general description
of the companies.
Risk Factors. An investment in Units of the Trusts should be made
with an understanding of the risks such an investment may entail.
Although actions have been taken to provide a diversified portfolio
of Equity Securities with respect to the California Growth & Treasury
Securities Trust, Series 1, some inherent risks exist due to the
concentration of the Equity Securities within the State of California
although a number of companies
Page 12
have significant business activities outside this region. Unpredictable
factors include governmental, political, economic and fiscal policies
of the State of California which may have an adverse effect on
the performance of the issuers which have significant business
activities within this State. In addition, regional influences
may affect the performance of issuers, particularly if an economic
downturn or contraction occurs in the mid-Pacific region of the
United States or in the State of California.
The California Growth & Treasury Securities Trust, Series 1 concentrates
its equity securities in the technology industry and, as a result,
the value of the Units of the Trust may be susceptible to factors
affecting the technology industry. The products and services of
technology companies may be subject to rapid obsolescence. These
factors could affect the value of a Trust's Units. Certain types
of technology companies represented in the Trust's portfolio are
engaged in fierce competition for a share of the market of their
products. As a result, competitive pressures are intense and the
stocks are subject to rapid price volatility. While the Trust's
portfolio includes securities of established suppliers of technology
products and services, the Trust also invests in small technology
companies which may benefit from the development of new products
and services. These smaller companies may present greater opportunities
for capital appreciation, and may also involve greater risk than
large, established issuers. Such smaller companies may have limited
product lines, market or financial resources, and their securities
may trade less frequently and in limited volume than the securities
of larger, more established companies. As a result, the prices of
the securities of such smaller companies may fluctuate to a
greater degree than the prices of securities of other issuers.
Although actions have been taken to provide a diversified portfolio
of Equity Securities with respect to the Pennsylvania Growth &
Treasury Securities Trust, Series 2, some inherent risks exist
due to the concentration of the Equity Securities within the Commonwealth
of Pennsylvania although a number of companies have significant
business activities outside this region. Unpredictable factors
include governmental, political, economic and fiscal policies
of the Commonwealth of Pennsylvania which may have an adverse
effect on the performance of the issuers which have significant
business activities within this Commonwealth. In addition, regional
influences may affect the performance of issuers, particularly
if an economic downturn or contraction occurs in the mid-Atlantic
region of the United States or in the Commonwealth of Pennsylvania.
Each Trust consists of such Securities listed under "Schedule
of Investments" for each Trust as may continue to be held from
time to time in such Trust and any additional Securities acquired
and held by the Trusts pursuant to the provisions of the Trust
Agreements 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 a 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 a Trust
will retain for any length of time its present size and composition.
Although each 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 a Trust, they may be accepted for deposit in such Trust and
either sold by the Trustee or held in such 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 Trusts?"
Equity Securities, however, will not be sold by the Trusts to
take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation.
Page 13
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trusts 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 Portfolios may be expected to fluctuate over the life of
the Trusts 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.
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 Trusts 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
Trusts, 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 Portfolios, 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 Trusts
and will vote such stocks in accordance with the instructions
of the Sponsor.
What are the Equity Securities Selected for California Growth
& Treasury Securities Trust, Series 1?
Adaptec, Inc., headquartered in Milpitas, California, is a supplier
of high-performance microcomputer input/output products including
proprietary "VLSI" circuits, personal computer and small computer
system interface-based controller and host controller boards and
a family of small computer systems. In addition, the company is
a supplier of integrated circuits to peripheral manufacturers
for use in intelligent, high-performance peripherals.
Page 14
ALZA Corporation, headquartered in Palo Alto, California, develops
and tests, primarily under joint arrangements, a variety of drug
products which provide programmed amounts of medication over extended
periods of time. In joint efforts, its clients pay development,
testing, registration and commercialization costs, and obtain
manufacturing and marketing rights to the products.
Amgen, Inc. is a developer, manufacturer and marketer of drugs
that are based on advanced cellular and molecular biology. The
company's principal drugs are "Epogen" (which promotes the production
of red blood cells) and "Neupogen" (an agent that stimulates the
production of some white blood cells). Amgen, Inc. is headquartered
in Thousand Oaks, California, and markets its products throughout
the United States and internationally.
Applied Materials, Inc. is headquartered in Santa Clara, California,
where it develops, manufactures, sells and services semiconductor
wafer fabrication equipment worldwide. The company's product line
includes deposition, etching and ion implantation systems. Applied
Materials, Inc. has an equity interest in Applied Komatsu Technology,
Inc., a producer of thin-film transistor fabrication systems for
flat-panel displays.
Atmel Corporation, headquartered in San Jose, California, designs,
develops, manufactures and markets high-performance memory and
logic integrated circuits using proprietary technology. The company's
products are used for computing, telecommunications, data communications,
industrial control, consumer automotive, instrumentation and military
aviation applications.
BankAmerica Corporation, through its subsidiaries, Bank of America
and SeaFirst Corporation, provides retail and wholesale banking
services in the western United States and other select markets.
BankAmerica's commercial banking group focuses on commercial banking
services for middle market customers, while the world group serves
large corporate and institutional customers worldwide. BankAmerica
is headquartered in San Francisco, California.
Chevron Corporation, headquartered in San Francisco, California,
is an international oil company with activities in the United
States and abroad. The company is involved in worldwide, integrated
petroleum operations which explore for, develop and produce petroleum
liquids and natural gas as well as transporting the products.
The company is also involved in the mineral and chemical industry.
Chiron Corporation is a provider of genetic engineering for the
development of healthcare products used in the treatment, prevention
and diagnosis of diseases. The company's target markets include
infectious disease diagnostics, adult vaccines, specialty pharmaceuticals
and ophthalmics. Chiron Corporation is headquartered in Emeryville,
California, and provides services to companies which include Johnson
& Johnson, Daiichi Pure Chemicals, Ltd. and CIBA-GEIGY.
Cisco Systems, Inc. is engaged in the development, manufacturing,
marketing and support of multi-protocol inter-networking systems
that enable the construction of large-scale computer networks.
The company's main products are routers with concurrent bridging
and terminal services. Cisco Systems, Inc., with its headquarters
in San Jose, California, sells its products internationally to
system integrators. The products are then resold, mainly to government
customers.
Clorox Company develops, manufactures and markets grocery store
products for the food service industry, both domestically and
internationally. The company, based in Oakland, California, conducts
bottled water operations in the northeast and in Florida. Clorox
Company products are marketed to grocery stores, mass merchandisers
and other retail outlets.
Electronic Arts, Inc. creates, markets and distributes interactive
entertainment software for various hardware platforms. The products
are developed primarily for 16- and 32-bit computer platforms
(such as Sega Genesis, the Super Nintendo Entertainment System
and floppy disk-based computers). The company is headquartered
in San Mateo, California. Electronic Arts, Inc. sells its products
in retail outlets throughout the United States and Canada.
Fair Isaac & Company, Inc., headquartered in San Rafael, California,
is a developer of statistical tools and scoring algorithms that
are applied to various business decision processes. Additionally,
the company is engaged in the production of software and stand-alone
computers for the implementation of its scoring algorithms,
Page 15
which are supplied to the U.S. Internal Revenue Service, financial
institutions, retailers, insurers and direct marketers.
First Interstate Bancorp is a bank holding company with headquarters
in Los Angeles, California. The subsidiaries conduct retail banking
operations in the western states, concentrating on California,
Washington and Texas. The company's banks attract deposits and
provide lending services, mainly to small, middle-market and selected
large corporations.
Gap, Inc. retails apparel and operates stores that sell tops,
shorts, sweaters, jackets and jeans for children and adults. The
Gap operates "Gap," "Gapkids" and "Banana Republic" stores throughout
the United States. The Gap is headquartered in San Francisco,
California.
Hewlett-Packard Company, headquartered in Palo Alto, California,
designs, manufactures and services electronic measurement, analysis
and computation instruments. The company produces computers, calculators,
workstations, video displays, printers, disc and tape drives,
medical diagnostic and monitoring devices and mass spectrometers.
Hewlett-Packard Company sells its products in the United States
and other countries.
Intel Corporation designs and manufactures computer components
and software. The company produces microprocessors, peripherals,
microcontrollers, microcommunications products, microcomputer
modules and systems and software for computer operating systems.
Intel Corporation sells its products internationally and is headquartered
in Santa Clara, California.
Linear Technology Corporation is headquartered in Milpitas, California,
where it manufactures linear integrated circuits. The company's
products include operational and instrumentation amplifiers, voltage
and switching regulators, voltage references, monolithic switched-capacitor
filters, high-frequency and high-current voltage converters and
other circuits. The company sells its products to original equipment
manufacturers (OEMs) in the United States and other countries.
Mattel, Inc. is headquartered in El Segundo, California, where
it designs, manufactures and markets children's toys worldwide.
Mattel, Inc.'s principal product line includes "Barbie Dolls,"
"Disney" preschool and infant toys and "Hot Wheels" miniature
vehicles. The company also has products which include activity
toys with the "Nickelodeon" brand name and the "See 'n Say" line
of toys.
Oracle Systems Corporation designs, develops, markets and supports
software products with a variety of uses, including database management,
applications development, decision support, end-user applications
and office automation. Oracle Systems Corporation's primary product,
the Oracle Relational Database Management System, runs on a broad
range of mainframes, minicomputers, microcomputers and personal
computers. The company is based in Redwood City, California.
Pacific Telesis Group, comprised of Pacific Bell, Pacific Bell
Directory and Nevada Bell, provides a wide variety of communications
services in California and Nevada, including local exchange and
toll service, network access and directory advertising. The company
is one of seven regional holding companies formed in connection
with the divestiture by AT&T Corporation. The company is headquartered
in San Francisco, California.
Silicon Graphics, Inc., headquartered in Mountain View, California,
designs, manufactures, markets and services a family of visual
processing computer systems that are used mainly by engineers,
scientists and other related professionals. The computer systems
are used to develop, analyze and simulate complex 3-D objects
and phenomena. MIPS Technologies, Inc., the company's subsidiary,
designs and licenses RISC processor technology for computer systems.
Superior Industries International, Inc. designs and manufactures
automotive products for vehicle manufacturers and the automotive
aftermarket. The company's products include custom road wheels,
steering wheel covers, seat belts, safety equipment and suspension
parts. Superior Industries International sells its wheels to Ford,
GM and Mazda. Aftermarket products are sold to Sears, Wal-Mart
and Western Auto. The company is headquartered in Van Nuys, California.
Sybase, Inc. is engaged in the development, marketing and support
of a full line of client/server-based relational database management
software products and services for online applications in networked
computing
Page 16
environments. Sybase, Inc.'s product line includes a broad range
of relational database management system servers, application
development tools and connectivity software. The company is headquartered
in Emeryville, California, and its products are marketed worldwide.
3Com Corporation is headquartered in Santa Clara, California,
where it designs, produces and markets a broad range of ISO 9000-compliant
global data networking solutions. 3Com Corporation's products
include routers, hubs, switches and adapters for Ethernet, Token
Ring, FDDI and ATM networks.
Walt Disney Company, headquartered in Burbank, California, is
a diversified international family entertainment company which
consists of theme parks and resorts, filmed entertainment and
consumer products. The company's attractions include "Disneyland,"
"Walt Disney World," "Epcot Center" and "Disney MGM Studios" in
addition to motion pictures for home and theater, including the
Disney Channel.
What are the Equity Securities Selected for Pennsylvania Growth
& Treasury Securities Trust, Series 2?
AMP, Inc., based in Harrisburg, Pennsylvania, is a worldwide producer
of electronic connection programming and switching devices. The
company supplies over 100,000 types and sizes of connectors, terminals,
switches and data entry systems to customers throughout the world.
Airgas, Inc. and its wholly-owned subsidiaries manufacture and
distribute industrial, medical and specialty gases, protective
equipment and welding accessories and design cryogenic systems.
The company, headquartered in Radnor, Pennsylvania, distributes
its products in the United States and Canada.
Aluminum Company of America (ALCOA) produces aluminum products
which are used by packaging, transportation, building and industrial
customers worldwide. Headquartered in Pittsburgh, Pennsylvania,
ALCOA also produces alumina, primary aluminum and a variety of
finished products, components and systems for a multitude of industrial
applications.
Armstrong World Industries, Inc. is a leading manufacturer of
interior furnishings such as floor coverings, ceramic tiling,
ceilings and furniture. Headquartered in Lancaster, Pennsylvania,
the company also produces specialty products for the building,
automotive and textile industries.
Arnold Industries, Inc., through its subsidiaries, assembles,
transports, warehouses and delivers truckload and less-than-truckload
shipments for contract customers. The company is headquartered
in Lebanon, Pennsylvania and operates in the continental United
States, Canada and Puerto Rico. Arnold transports food, building,
metal and paper products; textiles; pharmaceuticals; office equipment
and apparel.
Bell Atlantic Corporation, located in Philadelphia, Pennsylvania,
owns and operates various telephone subsidiaries in the Middle
Atlantic states and the District of Columbia. In addition, the
company operates cellular telephone services in its geographic
service area, maintains computer equipment and associated peripherals
and sells and repairs computer parts. The company also provides
telephone consulting outside the United States.
CoreStates Financial Corporation is based in Philadelphia, Pennsylvania.
The company's subsidiaries serve New Jersey and Pennsylvania,
providing lending services, cash management, and general banking
transactions. Non-bank activities consist of consumer and commercial
finance and trust services.
Crown Cork & Seal Company, Inc. is a major producer of crowns
and closures for bottles and containers and a manufacturer and
seller of metal cans. The company is based in Philadelphia, Pennsylvania,
and sells its products to the food, citrus, brewing, soft drink,
paint, toiletries, drug, anti-freeze, chemical and pet food industries.
Dentsply International, headquartered in York, Pennsylvania, designs,
manufactures and markets x-ray systems for the dental and medical
markets. The company also manufactures and distributes crown and
bridge materials and x-ray film mounts and distributes dental
products internationally under established brand names.
Genesis Health Ventures, Inc., headquartered in Kennett Square,
Pennsylvania, provides geriatric healthcare services. The company's
facilities offer room and board, recreational therapy, social,
housekeeping and laundry services. The company also provides reha-
bilitation therapy, pharmacy and subacute care services.
Page 17
Heinz (H.J.) Company, headquartered in Pittsburgh, Pennsylvania,
makes ketchup, sauces, baby food, beans, vinegar, pickles, soups,
canned tuna, pet food, frozen potatoes, meat products and corn
syrup. Heinz's subsidiary, Weight Watchers International, operates
and franchises weight control classes and licenses diet foods
to other manufacturers. The company sells in the United States,
Canada, Europe, Australia and Japan.
Hershey Foods Corporation is headquartered in Hershey, Pennsylvania.
The company produces chocolate and confectionery products under
brand names which include "Hershey's," "Kit Kat," "Reese's," "Mr.
Goodbar" and "Whatchamacallit" candy bars. Hershey Foods Corporation
also makes pasta, tomato sauce and cheese under brand names such
as "San Giorgio," "American Beauty," "Delmonico Light 'n Fluffy,"
"Skinner" and "Ronzini."
Kennametal, Inc., headquartered in Latrobe, Pennsylvania, makes
and sells a wide range of tools, tooling systems and supplies
for the metalworking, mining and construction industries, including
cutting tools, abrasives, carbide-tipped bits for trenching, grader
blades and metallurgical powders. The company sells its products
in the United States, Canada, Asia and Western Europe through
mail order catalogs and direct sales.
Kulicke & Soffa Industries designs, manufactures and sells wire
bonders, wafer saws, die bonders, micro tools and resistivity
probes used in the production of semiconductor devices. The company
is headquartered in Willow Grove, Pennsylvania and has manufacturing
plants in both Pennsylvania and England as well as leased plants
in Israel and Hong Kong.
Meridian Bancorp, headquartered in Reading, Pennsylvania, is a
bank holding company with branch offices in eastern and central
Pennsylvania, New Jersey and Delaware. The company owns Meridian
Bank, First National Bank of Pike County, Delaware Trust Company
and Commonwealth Bancshares. Meridian Bancorp also has other non-banking
subsidiaries providing financial and real estate services.
Mylan Laboratories, Inc., headquartered in Pittsburgh, Pennsylvania,
manufactures generic pharmaceutical products for resale by others
under their own labels. Products are made in tablet, capsule and
powder dosage forms and include anti-anxiety, antidepressant,
antihistamine and anti-inflammatory drugs. Mylan jointly owns
Somerset Pharmaceuticals (with Circa Pharmaceuticals) which markets
Eldepryl, a treatment for Parkinson's disease.
PPG Industries, Inc., based in Pittsburgh, Pennsylvania, manufactures
flat and fiber glass, industrial and specialty chemicals, coatings
and resins, and medical instruments. The company's products include
replacement glass for autos, aircraft transparencies, metal pretreatments,
adhesives, printing inks and chlorinated solvents. The company's
primary customers are the automotive, transportation and construction
industries.
Pep Boys-Manny, Moe & Jack is a retailer of automotive parts and
accessories and automotive maintenance, service and installation.
The company is headquartered in Philadelphia, Pennsylvania, and
operates "PEP BOYS" stores throughout the United States. The "PEP
BOYS" product line includes batteries, tires, new and rebuilt
parts for domestic and imported cars, antifreeze and other related
automotive accessories.
Respironics, Inc. is headquartered in Murrysville, Pennsylvania.
The company manufactures respiratory medical products that can
be used in the home as well as in the hospital. Respironics products
include manual ventilators, obstructive sleep apnea therapy products
and patient ventilation face masks.
Rhone-Poulenc Rorer, Inc., located in Collegeville, Pennsylvania,
develops, manufactures and markets prescription and over-the-counter
pharmaceuticals in the United States and abroad. The company's
operations involve the production and sale of pharmaceuticals,
primarily gastrointestinal, cardiovascular, bone metabolism, dermatological,
respiratory and plasma derivative products.
Teleflex, Inc. is a designer and manufacturer of mechanical, electrical,
electromechanical and hydraulic control equipment for the aerospace,
commercial, medical, auto, marine and industrial markets. The
company is headquartered in Plymouth Meeting, Pennsylvania.
U.S. Healthcare, Inc. is headquartered in Blue Bell, Pennsylvania.
The company owns and operates health maintenance organizations
(HMOs) in Connecticut, Delaware, Pennsylvania, Maryland, Massachusetts,
Page 18
New Hampshire, New Jersey and New York. For a fixed monthly payment,
health care is provided by the company's HMOs. Available to members
at an additional cost are dental care plans, prescription drug
plans and vision care plans.
Union Pacific Corporation, with headquarters in Bethlehem, Pennsylvania,
operates railroad, motor freight and mining businesses, as well
as a hazardous waste removal service. The company transports chemicals,
energy, merchandise, grain and autos.
VF Corporation, headquartered in Wyomissing, Pennsylvania, designs,
manufactures and markets jeanswear, sportswear, activewear, intimate
apparel and occupational apparel. The clothes are marketed under
such brand names as "Lee," "Wrangler," "Vanity Fair" and "Red
Kap." Customers are primarily national and regional department,
discount and specialty stores.
Vishay Intertechnology, Inc., headquartered in Malvern, Pennsylvania,
develops and manufactures a broad range of electronic resistors
and resistive sensors. Products include resistance stress sensors,
ultra-precision and precision commercial resistors and thick and
thin film resistor chips. The company markets its products to
the computer, telecommunications, military/aerospace, instrument
and automotive industries.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trusts.
The value of the Equity Securities, like the value of the Treasury
Obligations, will fluctuate over the life of a Trust and may be
more or less than the price at which they were deposited in such
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 each Trust, even if the Equity
Securities deposited in such Trust are worthless, an event which
the Sponsor considers highly unlikely, the Treasury Obligations
will provide sufficient principal to at least equal $10.00 per
Unit (which is equal to the per Unit value upon maturity of the
Treasury Obligations). This feature of the Trusts provides Unit
holders with principal protection, although they might forego
any earnings on the amount invested. To the extent that Units
are purchased at a price less than $10.00 per Unit, this feature
may also provide a potential for capital appreciation.
Unless a Unit holder purchases Units of a Trust on the Initial
Date of Deposit (or another date when the value of the Units is
$10.00 or less), total distributions, including distributions
made upon termination of the Trusts, 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 a 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 a 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 a 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 such 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 such Trust.
Page 19
The Indenture also authorizes the Sponsor to increase the size
of each Trust and the number of Units thereof by the deposit of
additional Securities in such Trust and the issuance of a corresponding
number of additional Units.
Each Trust consists of the Securities listed under "Schedule of
Investments" for each Trust (or contracts to purchase such Securities)
as may continue to be held from time to time in such Trust and
any additional Securities acquired and held by such Trust pursuant
to the provisions of the Indenture (including provisions with
respect to deposits into such Trust of Securities in connection
with the issuance of additional Units).
Once all of the Securities in each 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 Trusts?"
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 Trusts. 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 Trusts.
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
a Trust and the aggregate underlying value of the Equity Securities
in such Trust, plus or minus cash, if any, in the Income and Capital
Accounts of such Trust, plus a sales charge of 5.5% (equivalent
to 5.82% of the net amount invested) divided by the number of
Units of such 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 a Trust, plus or minus cash, if any, in the
Income and Capital Accounts of such Trust divided by the number
of Units of such 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 a Trust, plus or minus cash, if any,
in the Income and Capital Accounts of such Trust, plus a maximum
sales charge of 5.5% of the Public Offering Price (equivalent
to 5.82% of the net amount invested), subject to reduction beginning
April 1, 1996, divided by the number of outstanding Units of such
Trust.
The minimum purchase of each 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>
10,000 but less than 50,000 0.60% 0.6036%
50,000 but less than 100,000 1.30% 1.3171%
100,000 or more 2.10% 2.1450%
</TABLE>
Any such reduced sales charge shall be the responsibility of the
selling broker/dealer, bank or other. The reduced sales charge
structure will apply on all purchases of Units in a Trust by the
same person on any one day from any one broker/dealer, bank or
other. 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 broker/dealer, bank or other of
Page 20
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, broker/dealers, banks or others and their
affiliates, 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 Trusts 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 a 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 such 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 a Trust plus the applicable
sales charge. The offering price of the Treasury Obligations in
the Trusts may be expected to be greater than the bid price of
the Treasury Obligations by less than 2%.
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 a 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
a Trust plus or minus a pro rata share of cash, if any, in the
Income and Capital Accounts of such Trust) may be resold at the
then current Public Offering Price. Upon the termination of the
initial offering period, unsold
Page 21
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 Trusts
for sale in a number of states. Sales initially will be made to
broker/dealers, banks 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 April 1,
1996). Volume concessions or agency commissions of an additional
0.40% of the Public Offering Price will be given to any broker/dealer,
bank or other, who purchases from the Sponsor at least $100,000
of a Trust on the Initial Date of Deposit or $250,000 of a Trust
on any day thereafter. Effective on each April 1 commencing April
1, 1996, the sales charge will be reduced by 1/2 of 1% to a minimum
of 3.5%. However, resales of Units of the Trusts by such broker/dealers,
banks 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 Trusts 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 Units of the Trusts; 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.
From time to time the Sponsor may implement programs under which
broker/dealers, banks or others of a 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 a broker/dealer,
bank or other may be eligible to win other nominal awards for
certain sales efforts, or under which the Sponsor will reallow
to any such broker/dealer, bank or other 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 broker/dealers, banks or others
for certain services or activities which are primarily intended
to result in sales of Units of a Trust. Such payments are made
by the Sponsor out of its own assets, and not out of the assets
of a Trust. These programs will not change the price Unit holders
pay for their Units or the amount that a 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 a Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the full faith and
credit of the U.S. Government and bank CDs and money market accounts
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal,
but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of each
Trust are described more fully elsewhere in this Prospectus.
Each Trust's performance may be compared to performance on a total
return basis of the Dow Jones Industrial Average, the S&P 500
Composite Price Stock Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications
such as Money Magazine, The New York Times, U.S. News and World
Report, Business Week, Forbes Magazine or Fortune Magazine. As
with other
Page 22
performance data, performance comparisons should not be considered
representative of each Trust's relative performance for any future
period.
What are the Sponsor's Profits?
The Sponsor of the Trusts 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 "Public Offering-How
are Units Distributed?" for information regarding the receipt
of additional concessions available to broker/dealers, banks 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 Securities to
the Trusts (which is based on the Evaluator's determination of
the aggregate offering price of the underlying Securities of the
Trusts on the Initial Date of Deposit as well as on subsequent
deposits) and the cost of such Securities to the Sponsor. See
Note (2) of "Schedule of Investments" for each Trust. During the
initial offering period, the broker/dealers, banks and others
also may realize profits or sustain losses as a result of fluctuations
after the Initial Date of Deposit in the Public Offering Price
received by such dealers and others upon the sale of Units.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which
Units are resold (which price includes a sales charge of 5.5%
subject to reduction beginning April 1, 1996) or redeemed. The
secondary market public offering price of Units may be greater
or less than the cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to maintain a market for the Units
and continuously 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 a Trust and the aggregate
underlying value of the Equity Securities in such Trust plus or
minus cash, if any, in the Income and Capital Accounts of such
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
Page 23
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 a Trust; the number of Units issued
or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any
liens and restrictions of the issuer and any adverse claims to
which such Units are or may be subject or a statement that there
are no such liens, restrictions or adverse claims; and the date
the transfer was registered. Uncertificated Units are transferable
through the same procedures applicable to Units evidenced by certificates
(described above), except that no certificate need be presented
to the Trustee and no certificate will be issued upon the transfer
unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income (other than accreted
interest on the Treasury Obligations) received with respect to
any of the Securities in a 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 a 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 $0.01 per Unit. The Trustee is not required to pay interest
on funds held in the Capital Account of the Trusts (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 Trusts 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 a 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 each 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 2,500 Units
of such 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
Page 24
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 each Trust, those Unit
holders with at least 2,500 Units of a Trust 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.
The Trustee will credit to the Income Account of each 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 each Trust.
The Trustee may establish reserves (the "Reserve Account") within
each Trust for state and local taxes, if any, and any governmental
charges payable out of each 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 a Trust the following information in
reasonable detail: (1) a summary of transactions in such Trust
for such year; (2) any Securities sold during the year and the
Securities held at the end of such year by such 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 a 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 each 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 each Trust.
Page 25
The Trustee is empowered to sell Securities of each Trust in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of each 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 a Trust is assured of retaining a sufficient
principal amount of Treasury Obligations to provide funds upon
maturity of a Trust at least equal to $10.00 per Unit.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Treasury Obligations and the aggregate underlying
value of the Equity Securities in a Trust plus or minus cash,
if any, in the Income and Capital Accounts of such 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
a Trust, plus or minus cash, if any, in the Income and Capital
Accounts of such 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 each 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
each Trust) by the amount shown under "Summary of Essential Information."
The Redemption Price per Unit is the pro rata share of such Unit
determined by the Trustee by adding: (1) the cash on hand in a
Trust other than cash deposited in such 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 a 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 such 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 a Trust; (2) an amount representing estimated accrued expenses
of a 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 a Trust as of the business day prior
to the evaluation being made; and (4) other liabilities incurred
by a 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.
Page 26
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase
such Units by notifying the Trustee before 1:00 p.m. Eastern time
on the same business day and by making payment therefor to the
Unit holder not later than the day on which the Units would otherwise
have been redeemed by the Trustee. Units held by the Sponsor may
be tendered to the Trustee for redemption as any other Units.
In the event the Sponsor does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
effective prospectus describing such Units. Any profit or loss
resulting from the resale or redemption of such Units will belong
to the Sponsor.
How May Securities be Removed from the Trusts?
The Portfolios of the Trusts are 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 a Trust. Treasury Obligations may be sold by the Trustee only
pursuant to the liquidation of a 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 a 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 a 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 a Trust tendered for redemption and the
payment of expenses; provided however, that in the case of Securities
sold to meet redemption requests, Treasury Obligations may only
be sold if the Trust is assured of retaining a sufficient principal
amount of Treasury Obligations to provide funds upon maturity
of the Trust at least equal to $10.00 per Unit. Treasury Obligations
may not be sold 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 a 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.
Page 27
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 $9 billion in First Trust unit investment
trusts have been deposited. The Sponsor's employees include a
team of professionals with many years of experience in the unit
investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141.
As of December 31, 1994 the total partners' capital of Nike Securities
L.P. was $10,863,058 (audited). (This paragraph relates only to
the Sponsor and not to the Trusts 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 Trusts 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
Page 28
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 Trusts 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 Trusts as provided herein, or (c)
continue to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is FT Evaluators L.P., an Illinois limited partnership
formed in 1994 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 a Trust shall terminate upon the maturity,
redemption or other disposition of the last of the Treasury Obligations
held in such Trust, but in no event beyond the Mandatory Termination
Date indicated herein under "Summary of Essential Information."
A Trust may be liquidated at any time by consent of 100% of the
Unit holders of such Trust or by the Trustee in the event that
Units of the Trust not yet sold aggregating more than 60% of the
Units of such Trust are tendered for redemption by the Sponsor.
If a Trust is liquidated because of the redemption of unsold Units
of such Trust, the Sponsor will refund to each purchaser of Units
of such 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 a 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 a
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of a 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 such Trust maintained by the Trustee.
At least 60 days prior
Page 29
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 2,500
Units of a 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 a 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
a Trust is terminated. Regardless of the distribution involved,
the Trustee will deduct from the funds of a 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 a Trust upon termination may
result in a lower amount than might otherwise be realized if such
sale were not required at such time. The Trustee will then distribute
to each Unit holder his pro rata share of the balance of the Income
and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trusts.
Experts
The statements of net assets, including the schedules of investments,
of the Trusts at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon appearing elsewhere herein
and in the Registration Statement, and are included in reliance
upon such report given upon the authority of such firm as experts
in accounting and auditing.
Page 30
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 116
We have audited the accompanying statements of net assets, including
the schedules of investments, of The First Trust Special Situations
Trust, Series 116, comprised of California Growth & Treasury Securities
Trust, Series 1 and Pennsylvania Growth & Treasury Securities
Trust, Series 2, as of the opening of business on March 16, 1995.
These statements of net assets are the responsibility of the Trusts'
Sponsor. Our responsibility is to express an opinion on these
statements 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 statements
of net assets are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of net assets. Our procedures included
confirmation of the letters of credit held by the Trustee and
deposited in the Trusts on March 16, 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 statements of net assets. We believe that our audit of
the statements of net assets provides a reasonable basis for our
opinion.
In our opinion, the statements of net assets referred to above
present fairly, in all material respects, the financial position
of The First Trust Special Situations Trust, Series 116, comprised
of California Growth & Treasury Securities Trust, Series 1 and
Pennsylvania Growth & Treasury Securities Trust, Series 2, at
the opening of business on March 16, 1995 in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 16, 1995
Page 31
Statement of Net Assets
California Growth & Treasury Securities Trust, Series 1
The First Trust Special Situations Trust, Series 116
At the Opening of Business on the Initial Date of Deposit
March 16, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase
contracts (1) (2) $425,160
==========
Units outstanding 50,000
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $449,905
Less sales charge (3) (24,745)
__________
Net Assets $425,160
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for California Growth & Treasury Securities Trust,
Series 1 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 $600,000 issued
by Bankers Trust Company has been deposited with the Trustee covering
the monies necessary for the purchase of the Securities in the
California Growth & Treasury Securities Trust, Series 1 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 32
Statement of Net Assets
Pennsylvania Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 116
At the Opening of Business on the Initial Date of Deposit
March 16, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase
contracts (1) (2) $425,222
==========
Units outstanding 50,000
==========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $449,970
Less sales charge (3) (24,748)
__________
Net Assets $425,222
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for Pennsylvania Growth & Treasury Securities Trust,
Series 2 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 $600,000 issued
by Bankers Trust Company has been deposited with the Trustee covering
the monies necessary for the purchase of the Securities in the
Pennsylvania Growth & Treasury Securities Trust, Series 2 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 33
Schedule of Investments
California Growth & Treasury Securities Trust, Series 1
The First Trust Special Situations Trust, Series 116
At the Opening of Business on the Initial Date of Deposit
March 16, 1995
<TABLE>
<CAPTION>
Market
Value per
Percentage of Share of Cost of
Maturity Aggregate Equity Securities
Value Name of Issuer and Title of Security (1) Offering Price Securities to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
$500,000 Zero coupon U.S. Treasury bonds 50.50% $214,687
maturing November 15, 2006
Number Ticker Symbol and
of Shares Name of Issuer of Equity Securities
__________ ___________________________________
235 ADPT Adaptec, Inc. 1.98% $ 35.875 8,431
373 AZA ALZA Corporation 2.00% 22.750 8,486
129 AMGN Amgen, Inc. 1.99% 65.625 8,466
163 AMAT Applied Materials, Inc. 2.00% 52.125 8,496
230 ATML Atmel Corporation 1.93% 35.750 8,222
177 BAC BankAmerica Corporation 1.99% 47.750 8,452
180 CHV Chevron Corporation 1.99% 47.000 8,460
143 CHIR Chiron Corporation 1.99% 59.125 8,455
242 CSCO Cisco Systems, Inc. 2.00% 35.125 8,500
138 CLX Clorox Company 1.98% 61.000 8,418
332 ERTS Electronic Arts, Inc. 1.97% 25.250 8,383
215 FICI Fair Isaac & Company, Inc. 1.98% 39.250 8,439
107 I First Interstate Bancorp 1.99% 79.125 8,466
267 GPS Gap, Inc. 1.99% 31.750 8,477
70 HWP Hewlett-Packard Company 1.99% 120.625 8,444
103 INTC Intel Corporation 1.99% 82.000 8,446
150 LLTC Linear Technology Corporation 1.96% 55.500 8,325
365 MAT Mattel, Inc. 1.97% 23.000 8,395
257 ORCL Oracle Systems Corporation 1.99% 32.875 8,449
279 PAC Pacific Telesis Group 1.99% 30.375 8,475
244 SGI Silicon Graphics, Inc. 1.99% 34.625 8,448
311 SUP Superior Industries International, Inc. 1.98% 27.000 8,397
195 SYBS Sybase, Inc. 1.95% 42.500 8,287
145 COMS 3Com Corporation 1.95% 57.250 8,301
154 DIS Walt Disney Company 1.96% 54.250 8,355
________ ____________
Total Equity Securities 49.50% 210,473
________ ____________
Total Investments 100% $425,160
======== ============
</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 March
15, 1995.
Page 34
(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, 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 $424,677. Cost and profit to
the Sponsor relating to the purchase of the Treasury Obligations
sold to the Trust were $214,445 and $242, respectively. Cost and
loss to Sponsor relating to the purchase of the Equity Securities
sold to the Trust were $210,658 and $185, respectively.
Page 35
Schedule of Investments
Pennsylvania Growth & Treasury Securities Trust, Series 2
The First Trust Special Situations Trust, Series 116
At the Opening of Business on the Initial Date of Deposit
March 16, 1995
<TABLE>
<CAPTION>
Market
Value per
Percentage of Share of Cost of
Maturity Aggregate Equity Securities
Value Name of Issuer and Title of Security (1) Offering Price Securities to Trust (2)
________ ________________________________________ __________________ _________ ___________
<C> <S> <C> <C> <C>
$500,000 Zero coupon U.S. Treasury bonds 50.49% $214,687
maturing November 15, 2006
Number Ticker Symbol and
of Shares Name of Issuer of Equity Securities
__________ ___________________________________
230 AMP AMP, Inc. 1.99% $36.750 8,452
334 ARG Airgas, Inc. 1.99% 25.375 8,475
220 AA Aluminum Company of America (ALCOA) 1.97% 38.125 8,388
182 ACK Armstrong World Industries, Inc. 1.99% 46.500 8,463
442 AIND Arnold Industries, Inc. 1.97% 19.000 8,398
158 BEL Bell Atlantic Corporation 1.99% 53.625 8,473
280 CFL CoreStates Financial Corporation 1.97% 29.875 8,365
194 CCK Crown Cork & Seal Company, Inc. 1.98% 43.375 8,415
239 XRAY Dentsply International 1.98% 35.250 8,425
275 GHV Genesis Health Ventures, Inc. 1.97% 30.500 8,388
215 HNZ Heinz (H.J.) Company 1.98% 39.125 8,412
168 HSY Hershey Foods Corporation 1.98% 50.000 8,400
317 KMT Kennametal, Inc. 1.97% 26.375 8,361
325 KLIC Kulicke & Soffa Industries 1.97% 25.750 8,369
275 MRDN Meridian Bancorp 1.96% 30.375 8,353
276 MYL Mylan Laboratories, Inc. 1.97% 30.375 8,383
240 PPG PPG Industries, Inc. 1.98% 35.125 8,430
257 PBY Pep Boys-Manny, Moe & Jack 1.99% 33.000 8,481
287 RESP Respironics, Inc. 1.99% 29.500 8,466
208 RPR Rhone-Poulenc Rorer, Inc. 1.99% 40.625 8,450
219 TFX Teleflex, Inc. 1.99% 38.625 8,459
198 USHC U.S. Healthcare, Inc. 1.98% 42.500 8,415
162 UNP Union Pacific Corporation 1.98% 51.875 8,404
168 VFC VF Corporation 1.99% 50.375 8,463
155 VSH Vishay Intertechnology, Inc. 1.99% 54.500 8,447
________ ____________
Total Equity Securities 49.51% 210,535
________ ____________
Total Investments 100% $425,222
======== ============
</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 March
15, 1995.
Page 36
(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, 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 $424,739. Cost and profit to
the Sponsor relating to the purchase of the Treasury Obligations
sold to the Trust were $214,445 and $242, respectively. Cost and
loss to Sponsor relating to the purchase of the Equity Securities
sold to the Trust were $210,732 and $197, respectively.
Page 37
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Page 38
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Page 39
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information
California Growth & Treasury Securities Trust,
Series 1 4
Pennsylvania Growth & Treasury Securities Trust,
Series 2 5
The First Trust Special Situations Trust, Series 116:
What is The First Trust Special Situations Trust? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 9
Why are Investments in the Trusts Suitable for
Retirement Plans? 12
Portfolios:
What are Treasury Obligations? 12
What are Equity Securities? 12
Risk Factors 12
What are the Equity Securities Selected for California
Growth & Treasury Securities Trust, Series 1? 14
What are the Equity Securities Selected for
Pennsylvania Growth & Treasury Securities
Trust, Series 2? 17
What are Some Additional Considerations for
Investors? 19
Public Offering:
How is the Public Offering Price Determined? 20
How are Units Distributed? 21
What are the Sponsor's Profits? 23
Will There be a Secondary Market? 23
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 23
How are Income and Capital Distributed? 24
What Reports will Unit Holders Receive? 25
How May Units be Redeemed? 25
How May Units be Purchased by the Sponsor? 27
How May Securities be Removed from the Trusts? 27
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 28
Who is the Trustee? 28
Limitations on Liabilities of Sponsor and Trustee 28
Who is the Evaluator? 29
Other Information:
How May the Indenture be Amended or Terminated? 29
Legal Opinions 30
Experts 30
Report of Independent Auditors 31
Statements of Net Assets:
California Growth & Treasury Securities Trust,
Series 1 32
Pennsylvania Growth & Treasury Securities Trust,
Series 2 33
Schedules of Investments:
California Growth & Treasury Securities Trust,
Series 1 34
Pennsylvania Growth & Treasury Securities Trust,
Series 2 36
</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.
FIRST TRUST (registered trademark)
California
Growth & Treasury
Securities Trust
Series 1
Pennsylvania
Growth & Treasury
Securities Trust
Series 2
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
March 16, 1995
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. THIS REGISTRATION STATEMENT ON FORM S-6 COMPRISES
THE FOLLOWING PAPERS AND DOCUMENTS:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 116, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1
and The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, for purposes of
the representations required by Rule 487 and represents the
following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
116, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
March 16, 1995.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 116
By NIKE SECURITIES L.P.
Depositor
By Carlos E. Nardo
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) March 16, 1995
General Partner of )
Nike Securities L.P. )
)
)
) Carlos E. Nardo
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Special Situations Trust, Series 18 (File No.
33-42683) and the same is hereby incorporated herein by
this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated March 16, 1995, in
Amendment No. 2 to the Registration Statement (Form S-6) (File
No. 33-57741) and related Prospectus of The First Trust Special
Situations Trust, Series 116.
ERNST & YOUNG LLP
Chicago, Illinois
March 16, 1995
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 FT EVALUATORS L.P.
The consent of FT Evaluators L.P. to the use of its name in
the Prospectus included in the Registration Statement will be
filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 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 116 among Nike
Securities L.P., as Depositor, United States Trust
Company of New York, as Trustee, FT Evaluators L.P., as
Evaluator, and First Trust Advisors L.P., as Portfolio
Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of FT Evaluators 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).
EX-27 Financial Data Schedule.
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 116
TRUST AGREEMENT
Dated: March 16, 1995
This Trust Agreement among Nike Securities L.P., as
Depositor, United States Trust Company of New York, as Trustee
and FT Evaluators L.P., as Evaluator and Portfolio Supervisor,
sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Standard Terms
and Conditions of Trust for The First Trust Special Situations
Trust, Series 18 and subsequent Series, Effective October 15,
1991" (herein called the "Standard Terms and Conditions of
Trust"), and such provisions as are incorporated by reference
constitute a single instrument. All references herein to
Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as tough said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR CALIFORNIA GROWTH & TREASURY SECURITIES TRUST, SERIES 1
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 50,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/50,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
1.98% Adaptec, Inc., 2.00% ALZA Corporation, 1.99%
Amgen, Inc., 2.00% Applied Materials, Inc., 1.93% Atmel
Corporation, 1.99% BankAmerica Corporation, 1.99%
Chevron Corporation, 1.99% Chiron Corporation, 2.00% Cisco
Systems, Inc., 1.98% Clorox Company, 1.97% Electronic
Arts, Inc., 1.98% Fair Isaac & Company, Inc., 1.99%
First Interstate Bancorp, 1.99% Gap, Inc., 1.99%
Hewlett-Packard Company, 1.99% Intel Corporation, 1.96%
Linear Technology Corporation, 1.97% Mattel, Inc.,
1.99% Oracle Systems Corporation, 1.99% Pacific Telesis
Group, 1.99% Silicon Graphics, Inc., 1.98% Superior
Industries International, Inc., 1.95% Sybase, Inc.,
1.95% 3Com Corporation, 1.96% Walt Disney Company.
D. The Record Dates for Income and Capital distributions
shall be as set forth in the Prospectus under "Summary of
Essential Information."
E. The Distribution Dates for Income and Capital
distributions shall be as set forth in the Prospectus under
"Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
November 15, 2006.
G. The Treasury Obligations Maturity Date for the Trust
shall be November 15, 2006.
H. The Evaluator's compensation as referred to in Section
4.03 of the Standard Terms and Conditions of Trust shall be an
annual fee of $0.0030 per Unit calculated on the largest number
of Units outstanding during each period in respect of which a
payment is made pursuant to Section 3.05, payable on a
Distribution Date.
I. The Trustee's Compensation Rate pursuant to Section
6.04 of the Standard Terms and Conditions of Trust shall be an
annual fee of $0.0090 per Unit, calculated on the largest number
of Units outstanding during each period in respect of which a
payment is made pursuant to Section 3.05. However, in no event,
except as may be otherwise be provided in the Standard Terms and
Conditions of Trust, shall the Trustee receive compensation in
any one year from any Trust of less than $2,000 for such annual
compensation.
J. The Initial Date of Deposit for the Trust is March 16,
1995.
K. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 1,000 shares.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
FOR PENNSYLVANIA GROWTH & TREASURY SECURITIES TRUST, SERIES 2
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 50,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/50,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
1.99% AMP, Inc., 1.99% Airgas, Inc., 1.97% Aluminum
Company of America (ALCOA), 1.99% Armstrong World
Industries, Inc., 1.97% Arnold Industries, Inc., 1.99%
Bell Atlantic Corporation, 1.97% CoreStates Financial
Corporation, 1.98% Crown Cork & Seal Company, Inc.,
1.98% Dentsply International, 1.97% Genesis Health
Ventures, Inc., 1.98% Heinz (H.J.) Company, 1.98%
Hershey Foods Corporation, 1.97% Kennametal, Inc.,
1.97% Kulicke & Soffa Industries, 1.96% Meridian
Bancorp, 1.97% Mylan Laboratories, Inc., 1.98% PPG
Industries, Inc., 1.99% Pep Boys-Manny, Moe & Jack,
1.99% Respironics, Inc., 1.99% Rhone-Poulenc Rorer,
Inc., 1.99% Teleflex, Inc., 1.98% U.S. Healthcare,
Inc., 1.98% Union Pacific Corporation, 1.99% VF
Corporation, 1.99% Vishay Intertechnology, Inc.
D. The Record Dates for Income and Capital distributions
shall be as set forth in the Prospectus under "Summary of
Essential Information."
E. The Distribution Dates for Income and Capital
distributions shall be as set forth in the Prospectus under
"Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
November 15, 2006.
G. The Treasury Obligations Maturity Date for the Trust
shall be November 15, 2006.
H. The Evaluator's compensation as referred to in Section
4.03 of the Standard Terms and Conditions of Trust shall be an
annual fee of $0.0030 per Unit calculated on the largest number
of Units outstanding during each period in respect of which a
payment is made pursuant to Section 3.05, payable on a
Distribution Date.
I. The Trustee's Compensation Rate pursuant to Section
6.04 of the Standard Terms and Conditions of Trust shall be an
annual fee of $0.0090 per Unit, calculated on the largest number
of Units outstanding during each period in respect of which a
payment is made pursuant to Section 3.05. However, in no event,
except as may be otherwise be provided in the Standard Terms and
Conditions of Trust, shall the Trustee receive compensation in
any one year from any Trust of less than $2,000 for such annual
compensation.
J. The Initial Date of Deposit for the Trust is March 16,
1995.
K. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 1,000 shares.
PART III
A. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
B. Paragraph (b) of Section 2.01 of the Standard Terms and
Conditions of Trust is amended by substituting the following
sentences for the third and fourth sentences of such paragraph:
"The Trustee shall not accept any deposit pursuant to this
Section 2.01(b) unless the Depositor and Trustee have each
determined that the maturity value of the Zero Coupon Obligations
included in the deposit, divided by the number of Units created
by reason of the deposit, shall equal $1.00; written
certifications of such determinations shall be executed by the
Depositor and Trustee and preserved in the Trust records with a
copy of each such written certification to Standard & Poor's
Corporation so long as Units of the Trust are rated by them. The
Depositor shall, at its expense, cause independent public
accountants to review the Trust's holdings (i) at such time as
the Depositor determines no further deposits shall be made
pursuant to this paragraph and (ii), if earlier, as of the 90th
day following the initial deposit, for the purpose of certifying
whether the face value of the Zero Coupon Obligations then held
by the Trust divided by the Units then outstanding equals $1.00.
A copy of each written report from the independent public
accountants based on their review will be provided to Standard &
Poor's Corporation so long as Units of the Trust are rated by
them."
C. The last sentence of the first paragraph of Section
5.02 of the Standard Terms and Conditions of Trust is amended by
substituting "4:00 p.m. Eastern time" for "12:00 p.m in the City
of New York."
D. The second paragraph of Section 5.02 of the Standard
Terms and Conditions of Trust is amended by substituting the
following sentence for the third sentence of the second paragraph
of such Section:
"If such available funds shall be insufficient, the Trustee
shall sell such Securities as have been designated on the current
list for such purpose by the Portfolio Supervisor, as hereinafter
in this Section 5.02 provided, in amounts as the Trustee in its
discretion shall deem advisable or necessary in order to fund the
Principal Account for purposes of such redemption, provided
however, that Zero Coupon Obligations may not be sold unless the
Depositor and Trustee, which may rely on the advice of the
Portfolio Supervisor, have determined that the face value of the
Zero Coupon Obligations remaining after such proposed sale,
divided by the number of Units outstanding after the tendered
Units are redeemed, shall equal or exceed $1.00; a written
certification as to such determination shall be executed by the
Depositor and Trustee and preserved in the Trust records with a
copy of each such written certification to Standard & Poor's
Corporation so long as Units of the Trust are rated by them.
Within 90 days of the fiscal year end of the Trust, the Depositor
shall obtain, at its expense, an annual written certification
from the independent public accountants as to such determination
which will also be provided to Standard & Poor's Corporation so
long as Units of the Trust are rated by them."
E. The third sentence of the seventh paragraph of Section
5.02 of the Standard Terms and Conditions of Trust is amended by
deleting "a certification from the independent public accountants
to the effect described in the second paragraph of this Section
5.02" and in its place inserting "a certification from the
Depositor and Trustee to the effect described in the second
paragraph of this Section 5.02."
F. Paragraph (a) of subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to
substitute the following sentence for the first sentence of such
paragraph:
"On each Distribution Date, the Trustee shall distribute to
each Unit holder of record at the close of business on the Record
Date immediately preceding such Distribution Date an amount per
Unit equal to such Unit holder's Income Distribution (as defined
below, if such Distribution Date is a Distribution Date requiring
a distribution from the Income Account) plus such Unit holder's
pro rata share of the balance of the Principal Account (except
for monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such Record
Date after deduction of any amounts provided in Subsection I (if
such Distribution Date is exclusively a Distribution Date
requiring a distribution from the Capital Account, then the
calculation shall exclude amounts in the Income Account),
provided, however, that with respect to distributions other than
the distribution occurring in the month of December of each year,
the Trustee shall not be required to make a distribution from the
Principal Account unless the amount available for distribution
shall equal $1.00 per 1,000 Units in the case of Units initially
offered at approximately $1.00 per Unit, or, $1.00 per 100 Units
in the case of Units initially offered at approximately $10.00
per Unit."
G. Section 3.12 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.12. Notice to Depositor.
In the event that the Trustee shall have been notified at
any time of any action to be taken or proposed to be taken by at
least a legally required number of holders of any Securities
deposited in a Trust, the Trustee shall take such action or omit
from taking any action, as appropriate, so as to insure that the
Securities are voted as closely as possible in the same manner
and the same general proportion as are the Securities held by
owners other than the Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities, the
Trustee shall reject such offer. However, should any issuance,
exchange or substitution be effected notwithstanding such
rejection or without an initial offer, any securities, cash
and/or property received shall be deposited hereunder and shall
be promptly sold, if securities or property, by the Trustee
pursuant to the Depositor's direction, unless the Depositor
advises the Trustee to keep such securities or property. The
Depositor may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash proceeds of
any such sales shall be distributed to Unit holders on the next
distribution date in the manner set forth in Section 3.05
regarding distributions from the Principal Account. The Trustee
shall not be liable or responsible in any way for depreciation or
loss incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be liable to any
person for any action or failure to take action pursuant to the
terms of this Section 3.12.
Whenever new securities or property is received and retained
by the Trust pursuant to this Section 3.12, the Trustee shall,
within five days thereafter, mail to all Unit holders of the
Trust notices of such acquisition unless legal counsel for the
Trust determines that such notice is not required by The
Investment Company Act of 1940, as amended."
H. The second paragraph of Section 3.02 of the Standard
Terms and Conditions of Trust is hereby deleted and replaced with
the following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation which
shall be retained by the Trust) received by the Trust shall be
dealt with in the manner described at Section 3.12, herein, and
shall by retained or disposed of by the Trust according to those
provisions. The proceeds of any disposition shall be credited to
the Income Account of the Trust. Neither the Trustee nor the
Depositor shall be liable or responsible in any way for
depreciation or loss incurred by reason of any such sale."
I. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust Advisors
L.P. and its successors in interest, or any successor portfolio
supervisor appointed as hereinafter provided."
J. For purposes of this Trust, all references in the
Standard Terms and Conditions of Trust including provisions
thereof amended hereby to "1.00 per Unit" shall be amended to
read "10.00" per Unit" and all references to "per 1,000 Units"
shall be amended to read "per 100 Units."
K. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended to delete the reference to "100,000 Units"
and substitute "2,500 Units" in the second sentence of the second
paragraph thereof.
L. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05I(e) deduct from the Income Account or,
to the extent funds are not available in such Account, from
the Principal Account and pay to the Depositor the amount
that it is entitled to receive pursuant to Section 3.16.
M. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.16.:
"Section 3.16. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount which shall not exceed $0.0010 times the number
of Units outstanding as of January 1 of such year except for
a year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Depositor
provides service during less than the whole of such year),
but in no event shall such compensation when combined with
all compensation received from other unit investment trusts
for which the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services in
any calendar year exceed the aggregate cost to the Depositor
providing services to such unit investment trusts. Such
compensation may, from time to time, be adjusted provided
that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Income and Principal Accounts on or
before the Distribution Date following the Monthly Record
Date on which such period terminates. The Trustee shall
have no liability to any Certificateholder or other person
for any payment made in good faith pursuant to this Section.
If the cash balance in the Income and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.16, the Trustee shall
have the power to sell (i) Securities from the current list
of Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to
sell in its own discretion, and to apply the proceeds of any
such sale in payment of the amounts payable pursuant to this
Section 3.16, provided, however, that Zero Coupon
Obligations may not be sold to pay for amounts payable
pursuant to this Section 3.16.
Any moneys payable to the Depositor pursuant to this
Section 3.16 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
N. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean FT Evaluators L.P. and its
successors in interest, or any successor evaluator appointed
as hereinafter provided."
IN WITNESS WHEREOF, Nike Securities L.P., United States
Trust Company of New York, FT Evaluators L.P. and First Trust
Advisors L.P. have each caused this Trust Agreement to be
executed and the respective corporate seal to be hereto affixed
and attested (if applicable) by authorized officers; all as of
the day, month and year first above written.
NIKE SECURITIES L.P.,
Depositor
By Carlos E. Nardo
Senior Vice President
UNITED STATES TRUST COMPANY OF NEW
YORK, Trustee
(SEAL) By Thomas Porrazzo
Vice President
Attest:
Rosalia A. Raviele
Assistant Vice President
FT EVALUATORS L.P., Evaluator
By Carlos E. Nardo
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Carlos E. Nardo
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 116
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 16, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 116
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 116 in connection with the preparation, execution
and delivery of a Trust Agreement dated March 16, 1995 among Nike
Securities L.P., as Depositor, United States Trust Company of New
York, as Trustee, FT Evaluators L.P., as Evaluator, and First
Trust Advisors L.P., as Portfolio Supervisor, pursuant to which
the Depositor has delivered to and deposited the Securities
listed in Schedule A to the Trust Agreement with the Trustee and
pursuant to which the Trustee has issued to or on the order of
the Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-57741)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
March 16, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
United States Trust Company of New York
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 116
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 116 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in each Trust (the "Trusts"), under a Trust
Agreement, dated March 16, 1995 (the "Indenture"), between Nike
Securities L.P., as Depositor, United States Trust Company of New
York, as Trustee, FT Evaluators L.P., as Evaluator and First
Trust Advisors L.P., as Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trusts will be administered, and
investments by the Trusts from proceeds of subsequent deposits,
if any, will be made, in accordance with the terms of the
Indenture. The Trusts hold both Treasury Obligations and Equity
Securities (collectively, the "Securities") as such terms are
defined in the Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. Each 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 a Trust under the Internal Revenue Code of
1986 (the "Code"); the income of such Trust will be treated
as income of the Unit holders thereof under the Code; and an
item of Trust income will have the same character in the
hands of a Unit holder as it would have in the hands of the
Trustee. Each Unit holder will be considered to have
received his pro rata share of income derived from each
Trust asset when such income is received by a Trust.
II. Each Unit holder will have a taxable event when a
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 a 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 a Trust. The Treasury Obligations are
treated as bonds that were originally issued at an original
issue discount. Because the Treasury Obligations represent
interest in "stripped" U.S. Treasury bonds, a Unit holder's
initial cost for his pro rata portion of each Treasury
Obligation held by a Trust (determined at the time he
acquires his Units, in the manner described above) shall be
treated as its "purchase price" by a Unit holder. Under the
special rules relating to stripped bonds, 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 a 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 greater than or equal to a "de
minimis" amount determined under a Treasury Regulation (the
"Regulation") issued on December 28, 1992 as described
below. 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. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends,
as defined by Section 316 of the Code, paid by a corporation
are taxable as ordinary income to the extent of such
corporation's current and accumulated "earnings and
profits." A Unit holder's pro rata portion of dividends
which exceed such current and accumulated earnings and
profits will first reduce a Unit holder's tax basis in such
Security (and accordingly his basis in his Units), and to
the extent that such dividends exceed a Unit holder's tax
basis in such Security shall be treated as capital gain from
the sale or exchange of property. In general any such
capital gain will be short term unless a Unit holder has
held his Units for more than one year.
III. A Unit holder's portion of gain, if any, upon the
sale or redemption of Units or the disposition of Securities
held by a Trust will generally be considered a capital gain
except in the case of a dealer or a financial institution
and will be generally long-term if the Unit holder has held
his Units for more than one year. A Unit holder's portion
of loss, if any, upon the sale or redemption of Units or the
disposition of Securities held by a Trust will generally be
considered a capital loss except in the case of a dealer or
a financial institution and will be generally long-term if
the Unit holder has held his Units for more than one year.
IV. The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they
exceed two percent of an individual taxpayer's adjusted
gross income. Miscellaneous itemized deductions subject to
this limitation under present law include a Unit holder's
pro rata share of expenses paid by a Trust, including fees
of the Trustee and the Evaluator.
The Code provides a complex set of rules governing the
accrual of original issue discount, including special rules
relating to "stripped" debt instruments such as the Treasury
Obligations. These rules provide that original issue discount
generally accrues on the basis of a constant compound interest
rate. Special rules apply if the purchase price of a Treasury
Obligation exceeds its original issue price plus the amount of
original issue discount which would have previously accrued,
based upon its issue price (its "adjusted issue price").
Similarly, these special rules would apply to a Unit holder if
the tax basis of his pro rata portion of a Treasury Obligation
issued with original issue discount exceeds his pro rata portion
of its adjusted issue price. The application of these rules will
also vary depending on the value of the Treasury Obligations on
the date a Unit holder acquires his Units, and the price a Unit
holder pays for his Units. In addition, as discussed above, the
Regulation provides that the amount of original issue discount on
a stripped bond is considered zero if the actual amount of
original issue discount on such stripped bond, as determined
under Section 1286 of the Code, is less than a "de minimis"
amount, which, the Regulation provides, is the product of (i)
0.25 percent of the stated redemption price at maturity and (ii)
the number of full years from the date the stripped bond is
purchased (determined separately for each new purchaser thereof)
to the final maturity date of the bond.
For taxable years beginning after December 31, 1986 and
before January 1, 1996, certain corporations may be subject to
the environmental tax (the "Superfund Tax") imposed by Section
59A of the Code. Income received from, and gains recognized from
the disposition of, a Security by a Trust will be included in the
computation of the Superfund Tax by such corporations holding
Units in such Trust.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes or collateral tax consequences
with respect to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-57741)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
March 16, 1995
United States Trust Company
of New York, as Trustee of
The First Trust Special
Situations Trust, Series 116
California Growth & Treasury
Securities Trust, Series 1
Pennsylvania Growth & Treasury
Securities Trust, Series 2
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 116
California Growth & Treasury Securities Trust, Series 1
Pennsylvania Growth & Treasury Securities Trust,
Series 2
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
116, California Growth & Treasury Securities Trust, Series 1
Pennsylvania Growth & Treasury Securities Trust, Series 2 (the
"Trusts"), which will be established under a Standard Terms and
Conditions of Trust dated October 15, 1991, and a related Trust
Agreement dated as of today (collectively, the "Indenture"),
among Nike Securities L.P., as Depositor (the "Depositor"); FT
Evaluators L.P., as Evaluator; First Trust Advisors L.P., as
Portfolio Supervisor and United States Trust Company of New York,
as Trustee (the "Trustee"). Pursuant to the terms of the
Indenture, units of fractional undivided interest in the Trust
(the "Units") will be issued in the aggregate number set forth in
the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 33-57741) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit Holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
Carter, Ledyard & Milburn
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
October 19, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 116
California Growth & Treasury
Securities Trust, Series 1
Pennsylvania Growth & Treasury
Securities Trust, Series 2
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust,
Series 116
California Growth & Treasury Securities Trust, Series 1
Pennsylvania Growth & Treasury Securities Trust,
Series 2
Dear Sirs:
We are acting as counsel for United States Trust Company of New
York (the "Trust Company") in connection with the execution and
delivery of a Standard Terms and Conditions of Trust dated
October 15, 1991, and a related Trust Agreement, dated today's
date (collectively, the "Indenture"), among Nike Securities L.P.,
as Depositor (the "Depositor"); FT Evaluators L.P., as Evaluator;
First Trust Advisors L.P., as Portfolio Supervisor; and the Trust
Company, as Trustee (the "Trustee"), establishing The First Trust
Special Situations Trust, Series 116 California Growth & Treasury
Securities Trust, Series 1 Pennsylvania Growth & Treasury
Securities Trust, Series 2 (the "Trust"), and the execution by
the Trust Company, as Trustee under the Indenture, of a
certificate or certificates evidencing ownership of units (such
certificate or certificates and such aggregate units being herein
called "Certificates" and "Units"), each of which represents an
undivided interest in the Trust,which consists of zero coupon
U.S. Treasury bonds and common stocks (including confirmations of
contracts for the purchase of certain obligations not delivered
and cash, cash equivalents or an irrevocable letter of credit or
a combination thereof, in the amount required for such purchase
upon the receipt of such obligations), such obligations being
defined in the Indenture as Securities and listed in the Schedule
to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. The Trust Company is a duly organized and existing
corporation having the powers of a trust company under the laws
of the State of New York.
2. The Indenture has been duly executed and delivered by the
Trust Company and, assuming due execution and delivery by the
other parties thereto, constitutes the valid and legally binding
obligation of the Trust Company.
3. The Certificates are in proper form for execution and
delivery by the Trust Company, as Trustee.
4. The Trust Company, as Trustee, has duly executed and
delivered to or upon the order of the Depositor a Certificate or
Certificates evidencing ownership of the Units, registered in the
name of the Depositor. Upon receipt of confirmation of the
effectiveness of the registration statement for the sale of the
Units filed with the Securities and Exchange Commission under the
Securities Act of 1933, the Trustee may deliver such other
Certificates, in such names and denominations as the Depositor
may request, to or upon the order of the Depositor as provided in
the Closing Memorandum.
5. The Trust Company, as Trustee, may lawfully under the New
York Banking Law advance to the Trust amounts as may be necessary
to provide monthly interest distributions of approximately equal
amounts, and be reimbursed, without interest, for any such
advances from funds in the interest account on the ensuing record
date, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered, among
other things, whether the Securities have been duly authorized
and delivered.
Very truly yours,
Carter, Ledyard & Milburn
FT Evaluators L.P.
1001 Warrenville Road
Lisle, Illinois 60532
March 16, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 116
CALIFORNIA GROWTH & TREASURY SECURITIES TRUST, SERIES 1
Gentlemen:
We have examined the Registration Statement File No. 33-
57741 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to FT Evaluators
L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
FT Evaluators L.P.
Carlos E. Nardo
Senior Vice President
FT Evaluators L.P.
1001 Warrenville Road
Lisle, Illinois 60532
March 16, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 116
PENNSYLVANIA GROWTH & TREASURY SECURITIES TRUST, SERIES 2
Gentlemen:
We have examined the Registration Statement File No. 33-
57741 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to FT Evaluators
L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
FT Evaluators L.P.
Carlos E. Nardo
Senior Vice President
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