SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: THE FIRST TRUST SPECIAL
SITUATIONS TRUST, SERIES 121
B. Name of Depositor: NIKE SECURITIES L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: NIKE SECURITIES L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
E. Title and Amount of
Securities Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Proposed Maximum Offering
Price to the Public of the
Securities Being Registered: Indefinite.
G. Amount of Filing Fee
(as required by Rule 24f-2): $500.00
H. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 121
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each Information as to
depositor Sponsor, Trustee and
Evaluator
3. Name and address of Information as to
trustee Sponsor, Trustee and
Evaluator
4. Name and address of Underwriting
principal underwriters
5. State of organization The First Trust Special
of trust Situations Trust
6. Execution and termination The First Trust Special
of trust agreement Situations Trust; Other
Information
7. Changes of name *
8. Fiscal Year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Rights of Unit Holders
securities
(b) Cumulative or distributive
securities The First Trust Special
Situations Trust
(c) Redemption Rights of Unit Holders
(d) Conversion, transfer, etc. Rights of Unit Holders
(e) Periodic payment plan
certificates *
(f) Voting rights Rights of Unit Holders;
Other Information
(g) Notice of certificate- Rights of Unit Holders;
holders Other Information
(h) Consents required Rights of Unit Holders;
Other Information
(i) Other provisions The First Trust Special
Situations Trust
11. Types of securities comprising The First Trust Special
units Situations Trust
12. Certain information
regarding periodic payment
plan certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First Trust
Special Situations Trust
(b) Certain information
regarding periodic payment
plan certificates *
(c) Certain percentages Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(d) Difference in price offered Public Offering
for any class of transactions
to any class or group of
individuals
(e) Certain other load fees, Rights of Unit Holders
expenses, etc. payable by
holders
(f) Certain profits receivable The First Trust Special
by depositor, principal Situations Trust
underwriters, trustee or
affiliated persons
(g) Ratio of annual charges to
income *
14. Issuance of trust's Rights of Unit Holders
securities
15. Receipt and handling of
payments from purchasers *
16. Acquisition and disposition
of underlying securities The First Trust Special
Situations Trust; Rights
of Unit Holders
17. Withdrawal or redemption The First Trust Special
Situations Trust; Public
Offering; Rights of Unit
Holders
18. (a) Receipt, custody and
disposition of income Rights of Unit Holders
(b) Reinvestment of
distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and
reports Rights of Unit Holders
20. Certain miscellaneous
provisions of trust
agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal and
successor Information as to
Sponsor, Trustee and
Evaluator
(e) and (f) Depositor, removal Information as to
and successor Sponsor, Trustee and
Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust Special
Situations Trust;
Information as to
Sponsor, Trustee and
Evaluator
23. Bonding arrangements Contents of Registration
Statement
24. Other material provisions
of trust agreement *
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to *
officials and affiliated
persons of depositor
29. Voting securities of *
depositor
30. Persons controlling *
depositor
31. Payment by depositor for *
certain services rendered
to trust
32. Payment by depositor for *
certain other services
rendered to trust
33. Remuneration of other *
persons for certain
services rendered to trust
34. Remuneration of other *
persons for certain services
rendered to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's
securities by states Public Offering
36. Suspension of sales of
trust's securities *
37. Revocation of authority
to distribute *
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering;
Underwriting
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) N.A.S.D. membership of Information as to
principal underwriters Sponsor, Trustee and
Evaluator
40. Certain fee received by See Items 13(a) and 13(e)
principal underwriters
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal
underwriters *
42. Ownership of trust's
securities by certain
persons *
43. Certain brokerage
commissions received
by principal underwriters *
44. (a) Method of valuation Summary of Essential
Information; The First
Trust Special Situations
Trust; Public Offering
(b) Schedule as to offering
price *
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption
rights *
46. (a) Redemption Valuation Rights of Unit Holders
(b) Schedule as to redemption
price *
47. Maintenance of position Public Offering; Rights
in underlying securities of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation Information as to
of trustee Sponsor, Trustee and
Evaluator
49. Fees and expenses of trustee The First Trust Special
Situations Trust
50. Trustee's lien The First Trust Special
Situations Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OR
SECURITIES
51. Insurance of holders of *
trust's securities
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust Special
agreement with respect Situations Trust; Rights
to selection or elimination of Unit Holders
of underlying securities
(b) Transactions involving
elimination of underlying
securities *
(c) Policy regarding The First Trust Special
substitution or elimination Situations Trust; Rights
of underlying securities of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust Special
Situations Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during
last ten years *
55. Certain information regarding
periodic payment plan
certificates
56. Certain information regarding
periodic payment plan
certificates
57. Certain information regarding *
periodic payment plan
certificates
58. Certain information regarding
periodic payment plan
certificates
59. Financial statements Report of Independent
(Instruction 1(b) to Auditors; Statement of
Form S-6) Net Assets
__________________________
* Inapplicable, answer negative or not required.
SUBJECT TO COMPLETION, DATED MAY 31, 1995
Southeast Value Trust, Series 1
The Trust. The First Trust (registered trademark) Special Situations
Trust, Series 121 (the "Trust") is a unit investment trust consisting
of a portfolio containing common stocks issued by companies which
have significant ties with or are headquartered in the states
of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi,
North Carolina, Tennessee, Texas and the District of Columbia
(the "Southeast"), except up to 15% of the portfolio may consist
of equity securities outside this region. The portfolio contains
common stocks of companies which, in the opinion of the Underwriter,
are undervalued on the Initial Date of Deposit.
The objective of the Trust is to provide for potential capital
appreciation and dividend income by investing the Trust's portfolio
in common stocks issued by companies which have significant ties
with or are headquartered in the Southeast (the "Equity Securities").
See "Schedule of Investments." The Trust has a mandatory termination
date ("Mandatory Termination Date" or "Trust Ending Date") as
set forth under "Summary of Essential Information." There is,
of course, no guarantee that the objective of the Trust will be
achieved. Each Unit of the Trust represents an undivided fractional
interest in all the Equity Securities deposited in the Trust.
The Equity Securities deposited in the Trust's portfolio have
no fixed maturity date and the value of these underlying Equity
Securities will fluctuate with changes in the values of stocks
in general. See "Portfolio."
The Sponsor may, from time to time during a period of up to approximately
360 days after the Initial Date of Deposit, deposit additional
Equity Securities in the Trust. Such deposits of additional Equity
Securities will, therefore, be done in such a manner that the
original proportionate relationship amongst the individual issues
of the Equity Securities shall be maintained. Any deposit by the
Sponsor of additional Equity Securities will duplicate, as nearly
as is practicable, the original proportionate relationship established
on the Initial Date of Deposit, and not the actual proportionate
relationship on the subsequent date of deposit, since the actual
proportionate relationship may be different than the original
proportionate relationship. Any such difference may be due to
the sale, redemption or liquidation of any Equity Securities deposited
in the Trust on the Initial, or any subsequent, Date of Deposit.
See "What is the First Trust Special Situations Trust?" and "How
May Equity Securities be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the
Trust during the initial offering period is equal to the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the ask prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust, plus a maximum sales charge
of 4.90% (equivalent to 5.152% of the net amount invested). A
pro rata share of accumulated dividends, if any, in the Income
Account is included in the Public Offering Price. The secondary
market Public Offering Price per Unit will be based upon the aggregate
underlying value of the Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus a pro rata share of cash, if any, in the Capital
and Income Accounts of the Trust plus a maximum sales charge of
4.90% (equivalent to 5.152% of the net amount invested) subject
to reduction beginning , 1996. The minimum purchase
is $2,000. The sales charge is reduced on a graduated scale for
sales involving at least 10,000 Units. See "How is the Public
Offering Price Determined?"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE
TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY STATE.
J.C. Bradford & Co.
The date of this Prospectus is , 1995
Page 1
Estimated Net Annual Distributions. The estimated net annual dividend
distributions to Unit holders (based on the most recent quarterly
dividend declared with respect to the Equity Securities in the
Trust) on the Initial Date of Deposit for the Southeast Value
Trust, Series 1 was $ per Unit. The actual net
annual dividend distributions per Unit will vary with changes
in fees and expenses of the Trust, with changes in dividends received
and with the sale or liquidation of Equity Securities; therefore,
there is no assurance that the net annual dividend distributions
will be realized in the future.
Dividend and Capital Distributions. Distributions of dividends
and capital, if any, received by the Trust, net of expenses of
the Trust, will be paid annually on the Distribution Date to Unit
holders of record on the Record Date as set forth in the "Summary
of Essential Information." Distributions of funds in the Capital
Account, if any, will be made at least annually in December of
each year. Any distribution of income and/or capital will be net
of the expenses of the Trust. See "What is the Federal Tax Status
of Unit Holders?" Additionally, upon termination of the Trust,
the Trustee will distribute, upon surrender of Units for redemption,
to each Unit holder his pro rata share of the Trust's assets,
less expenses, in the manner set forth under "Rights of Unit Holders-How
are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period,
while under no obligation to do so, the Sponsor and the Underwriter
intend to maintain a market for Units of the Trust and offer to
repurchase such Units at prices which are based on the aggregate
underlying value of Equity Securities in the Trust (generally
determined by the closing sale prices of listed Equity Securities
and the bid prices of over-the-counter traded Equity Securities)
plus or minus cash, if any, in the Capital and Income Accounts
of the Trust. If a secondary market is maintained during the initial
offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the
Equity Securities in the Trust (generally determined by the closing
sale prices of listed Equity Securities and the ask prices of
over-the-counter traded Equity Securities) plus or minus cash,
if any, in the Capital and Income Accounts of the Trust. If a
secondary market is not maintained, a Unit holder may redeem Units
through redemption at prices based upon the aggregate underlying
value of the Equity Securities in the Trust (generally determined
by the closing sale prices of listed Equity Securities and the
bid prices of over-the-counter traded Equity Securities) plus
or minus a pro rata share of cash, if any, in the Capital and
Income Accounts of the Trust. A Unit holder tendering 2,500 Units
or more for redemption may request a distribution of shares of
Equity Securities (reduced by customary transfer and registration
charges) in lieu of payment in cash. See "How May Units be Redeemed?"
Termination. Commencing on the Mandatory Termination Date, Equity
Securities will begin to be sold in connection with the termination
of the Trust. The Sponsor will determine the manner, timing and
execution of the sale of the Equity Securities. Written notice
of any termination of the Trust specifying the time or times at
which Unit holders may surrender their certificates for cancellation
shall be given by the Trustee to each Unit holder at his address
appearing on the registration books of the Trust maintained by
the Trustee. At least 60 days prior to the Mandatory Termination
Date of the Trust, the Trustee will provide written notice thereof
to all Unit holders and will include with such notice a form to
enable Unit holders to elect a distribution of shares of Equity
Securities (reduced by customary transfer and registration charges)
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. To be effective, the election form, together
with surrendered certificates and other documentation required
by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date of the Trust.
Unit holders not electing a distribution of shares of Equity Securities
will receive a cash distribution within a reasonable time after
the Trust is terminated. See "Rights of Unit Holders-How are Income
and Capital Distributed?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among
other factors, the possible deterioration of either the financial
condition of the issuers or the general condition of the stock
market, volatile interest rates, economic recession and potential
increased regulation on banks. The Trust is not actively managed
and Equity Securities will not be sold by the Trust to take advantage
of market fluctuations or changes in anticipated rates of appreciation.
See "What are Equity Securities?-Risk Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities- , 1995
Underwriter: J.C. Bradford & Co.
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: FT Evaluators L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Initial Number of Units
Fractional Undivided Interest in the Trust per Unit 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Equity
Securities in Portfolio (1) $
Aggregate Offering Price Evaluation of Equity
Securities per Unit $
Sales Charge of 4.90% of the Public Offering Price per Unit
(5.152% of the net amount invested) $
Public Offering Price per Unit (2) $
Sponsor's Initial Repurchase Price per Unit $
Redemption Price per Unit (based on aggregate
underlying value of Equity Securities) (3) $
</TABLE>
CUSIP Number
First Settlement Date , 1995
Mandatory Termination Date , 2000
Discretionary Liquidation Amount The Trust may be terminated
if the value thereof is less
than 40% of the total value of Equity
Securities deposited in the Trust
during the primary offering period.
Trustee's Annual Fee $0.0074 per Unit outstanding.
Evaluator's Annual Fee (4) $0.0017 per Unit outstanding, payable
to an affiliate of the Sponsor.
Evaluations for purposes of sale,
purchase or redemption of Units are
made as of the close of trading
(4:00 p.m. eastern standard time)
on the New York Stock Exchange on
each day on which it is open.
Supervisory Fee (5) Maximum of $0.0035 per Unit out-
standing annually payable to an
affiliate of the Sponsor.
Income Distribution Record Date First day of December
commencing December 1, 1995.
Estimated Annual Organizational
Expenses (6) $ per Unit.
Income Distribution Date (7) Fifteenth day of December
commencing December 15, 1995.
- ----------------
[FN]
(1) Each Equity Security listed on a national securities exchange
or the NASDAQ National Market System is valued at the last closing
sale price, or if no such price exists or if the Equity Security
is not so listed, at the closing ask price thereof.
(2) On the Initial Date of Deposit there will be no accumulated
dividends in the Income Account. Anyone ordering Units after such
date will pay a pro rata share of any accumulated dividends in
such Income Account. The Public Offering Price as shown reflects
the value of the Equity Securities at the opening of business
on the Initial Date of Deposit and establishes the original proportionate
relationship amongst the individual securities. No sales to investors
will be executed at this price. Additional Equity Securities will
be deposited during the day of the Initial Date of Deposit which
will be valued as of 4:00 p.m. eastern standard 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 maximum evaluation fee for any one calendar year will
be $2,500.
(5) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $ per Unit.
(6) The Trust (and therefore Unit holders) will bear all or a
portion of its organizational costs (including costs of preparing
the registration statement, the trust indenture and other closing
documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of the Trust portfolio
and the initial fees and expenses of the Trustee but not including
the expenses incurred in the printing of preliminary prospectuses,
and expenses incurred in the preparation and printing of brochures
and other advertising materials and any other selling expenses)
as is common for mutual funds. Total organizational expenses will
be amortized over a five year period. See "What are the Expenses
and Charges?" and "Statement of Net Assets." Historically, the
sponsors of unit investment trusts have paid all the costs of
establishing such trusts.
(7) Distributions from the Capital Account will be made monthly
payable on the last day of the month to Unit holders of record
on the fifteenth day of such month if the amount available for
distribution equals at least $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made in December of each year.
Page 3
Southeast Value Trust, Series 1
The First Trust Special Situations Trust, Series 121
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 121 is one of
a series of investment companies created by the Sponsor under
the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated
by a different series number (the "Trust"). This Series consists
of an underlying separate unit investment trust designated as:
Southeast Value Trust, Series 1. The Trust was created under the
laws of the State of New York pursuant to a Trust Agreement (the
"Indenture"), dated the Initial Date of Deposit, with Nike Securities
L.P., as Sponsor, United States Trust Company of New York, as
Trustee, 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 common
stocks together with an irrevocable letter or letters of credit
of a financial institution in an amount at least equal to the
purchase price of such securities. In exchange for the deposit
of securities or contracts to purchase securities in the Trust,
the Trustee delivered to the Sponsor documents evidencing the
entire ownership of the Trust.
The objective of the Trust is to provide for potential capital
appreciation and dividend income through an investment in equity
securities issued by companies which have significant ties with
or are headquartered in the states of Alabama, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, Tennessee, Texas
and the District of Columbia (the "Southeast"), except up to 15%
of the portfolio may consist of equity securities outside this
region. The portfolio contains common stocks of companies which,
in the opinion of the Underwriter, are undervalued on the Initial
Date of Deposit (the "Equity Securities"). The Trust seeks to
achieve this objective by employing a "contrarian investment philosophy"
of purchasing common stock of companies which have been "out of favor"
for various reasons. The share prices of the Equity Securities are
below previous highs or they have underperformed the S&P for twelve
months. In the opinion of the Underwriter, the decline in the companies
chosen for inclusion in the Trust may have reached their lowest levels.
As such, the Underwriter believes that the companies have the potential
to increase in value and price when investor sentiment turns positive
and increased demand pushes prices higher. These stocks are also
uniquely positioned to benefit from the positive demographic trends
in the Southeast projected throughout the remainder of the '90s. There
is, of course, no guarantee that the objective of the Trust will be
achieved.
With the deposit of the Equity Securities on the Initial Date
of Deposit, the Sponsor established a percentage relationship
between the amounts of Equity Securities in the Trust's portfolio.
From time to time following the Initial Date of Deposit, the Sponsor,
pursuant to the Indenture, may deposit additional Equity Securities
in the Trust and Units may be continuously offered for sale to
the public by means of this Prospectus, resulting in a potential
increase in the outstanding number of Units of the Trust. Any
deposit by the Sponsor of additional Equity Securities will duplicate,
as nearly as is practicable, the original proportionate relationship
and not the actual proportionate relationship on the subsequent
date of deposit, since the actual proportionate relationship may
be different than the original proportionate relationship. Any
such difference may be due to the sale, redemption or liquidation
of any of the Equity Securities deposited in the Trust on the
Initial, or any subsequent, Date of Deposit. See "How May Equity
Securities be Removed from the Trust?" The original percentage
relationship of each Equity Security to the Trust is set forth
herein under "Schedule of Investments." Since the prices of the
underlying Equity Securities will fluctuate daily, the ratio,
on a market value basis, will also change daily. The portion of
Equity Securities represented by each Unit will not change as
a result of the deposit of additional Equity Securities in the
Trust.
On the Initial Date of Deposit, each Unit of the Trust represented
the undivided fractional interest in the Equity Securities deposited
in the Trust set forth under "Summary of Essential Information."
To the extent that Units of the Trust are redeemed, the aggregate
value of the Equity Securities in the Trust will be reduced and
the undivided fractional interest represented by each outstanding
Unit of the Trust will increase. However,
Page 4
if additional Units are issued by the Trust in connection with
the deposit of additional Equity Securities by the Sponsor, the
aggregate value of the Equity Securities in the Trust will be
increased by amounts allocable to additional Units, and the fractional
undivided interest represented by each Unit of the Trust will
be decreased proportionately. See "How May Units be Redeemed?"
The Trust has a Mandatory Termination Date as set forth herein
under "Summary of Essential Information."
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the Trust, for which the Sponsor will be reimbursed
in amounts as set forth under "Summary of Essential Information,"
the Sponsor will not receive any fees in connection with its activities
relating to the Trust. Such bookkeeping and administrative charges
may be increased without approval of the Unit holders by amounts
not exceeding proportionate increases under the category "All
Services Less Rent of Shelter" in the Consumer Price Index published
by the United States Department of Labor. The fees payable to
the Sponsor for such services may exceed the actual costs of providing
such services for this Trust, but at no time will the total amount
received for such services rendered to unit investment trusts
of which Nike Securities L.P. is the Sponsor in any calendar year
exceed the aggregate cost to the Sponsor of supplying such services
in such year. First Trust Advisors L.P., an affiliate of the Sponsor,
will receive an annual supervisory fee, which is not to exceed
the amount set forth under "Summary of Essential Information,"
for providing portfolio supervisory services for the Trust. Such
fee is based on the number of Units outstanding in the Trust on
January 1 of each year except for the year or years in which an
initial offering period occurs in which case the fee for a month
is based on the number of Units outstanding at the end of such
month. The fee may exceed the actual costs of providing such supervisory
services for this Trust, but at no time will the total amount
received for portfolio supervisory services rendered to unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar
year exceed the aggregate cost to First Trust Advisors L.P. of
supplying such services in such year.
Subsequent to the initial offering period, the Evaluator, an affiliate
of the Sponsor, will receive a fee as indicated in the "Summary
of Essential Information." The fee may exceed the actual costs
of providing such evaluation services for the Trust, but at no
time will the total amount received for evaluation services rendered
to unit investment trusts of which Nike Securities L.P. is the
Sponsor in any calendar year exceed the aggregate cost to FT Evaluators
L.P. of supplying such services in such year. The Trustee pays
certain expenses of the Trust for which it is reimbursed by the
Trust. The Trustee will receive for its ordinary recurring services
to the Trust an annual fee computed at $0.0074 per annum per Unit
in the Trust outstanding based upon the largest aggregate number
of Units of the Trust outstanding at any time during the year.
For a discussion of the services performed by the Trustee pursuant
to its obligations under the Indenture, reference is made to the
material set forth under "Rights of Unit Holders."
The Trustee's and Evaluator's fees are payable from the Income
Account of the Trust to the extent funds are available and then
from the Capital Account of the Trust. Since the Trustee has the
use of the funds being held in the Capital and Income Accounts
for payment of expenses and redemptions and since such Accounts
are noninterest-bearing to Unit holders, the Trustee benefits
thereby. Part of the Trustee's compensation for its services to
the Trust is expected to result from the use of these funds. Both
fees may be increased without approval of the Unit holders by
amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index
published by the United States Department of Labor.
Expenses incurred in establishing the Trust, including the cost
of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates),
federal and state registration fees, the initial fees and expenses
of the Trustee, legal and accounting expenses, payment of closing
fees and any other out-of-pocket expenses, will be paid by the
Trust and amortized over the first five years of the Trust. The
following additional charges are or may be incurred by the Trust:
all legal and annual auditing expenses of the Trustee incurred
by or in connection with its responsibilities under the Indenture;
the expenses and costs of any action undertaken by the Trustee
to protect the Trust and the rights and interests of the Unit
holders; fees of the Trustee for any extraordinary services performed
under the
Page 5
Indenture; indemnification of the Trustee for any loss, liability
or expense incurred by it without negligence, bad faith or willful
misconduct on its part, arising out of or in connection with its
acceptance or administration of the Trust; indemnification of
the Sponsor for any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct in acting as
Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such
taxes or charges are being levied or made or, to the knowledge
of the Sponsor, contemplated). The above expenses and the Trustee's
annual fee, when paid or owing to the Trustee, are secured by
a lien on the Trust. In addition, the Trustee is empowered to
sell Equity Securities in the Trust in order to make funds available
to pay all these amounts if funds are not otherwise available
in the Income and Capital Accounts of the Trust. Since the Equity
Securities are all common stocks and the income stream produced
by dividend payments is unpredictable, the Sponsor cannot provide
any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Equity Securities
will have to be sold to meet Trust expenses. These sales may result
in capital gains or losses to Unit holders. See "What is the Federal
Tax Status of Unit Holders?"
The Indenture requires the Trust to be audited on an annual basis
at the expense of the Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market
for the Units, the Sponsor is required to bear the cost of such
annual audits to the extent such cost exceeds $0.0050 per Unit.
Unit holders of the Trust covered by an audit may obtain a copy
of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal
income tax consequences of the purchase, ownership and disposition
of the Units. The summary is limited to investors who hold the
Units as "capital assets" (generally, property held for investment)
within the meaning of Section 1221 of the Internal Revenue Code
of 1986 (the "Code"). Unit holders should consult their tax advisers
in determining the Federal, state, local and any other tax consequences
of the purchase, ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of the assets of the Trust
under the Code; and the income of the Trust will be treated as
income of the Unit holders thereof under the Code. Each Unit holder
will be considered to have received his pro rata share of the
income derived from each Equity Security when such income is received
by the Trust.
2. Each Unit holder will have a taxable event when the Trust
disposes of an Equity Security (whether by sale, exchange, redemption,
or otherwise) or upon the sale or redemption of Units by such
Unit holder. The price a Unit holder pays for his Units, including
sales charges, is allocated among his pro rata portion of each
Equity Security held by the Trust (in proportion to the fair market
values thereof on the date the Unit holder purchases his Units)
in order to determine his initial cost for his pro rata portion
of each Equity Security held by the Trust. For Federal income
tax purposes, a Unit holder's pro rata portion of dividends, as
defined by Section 316 of the Code, paid by a corporation with
respect to an Equity Security held by the Trust is taxable as
ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unit holder's pro rata portion
of dividends paid on such Equity Security which exceed such current
and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security, and to the extent
that such dividends exceed a Unit holder's tax basis in such Equity
Security shall generally be treated as capital gain. In general,
any such capital gain will be short-term unless a Unit holder
has held his Units for more than one year.
3. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held
by the Trust will generally be considered a capital gain except
in the case of a dealer or a financial institution and will be
long-term if the Unit holder has held his Units for more than
one year
Page 6
(the date on which the Units are acquired (i.e., the trade date)
is excluded for purposes of determining whether the Units have
been held for more than one year). A Unit holder's portion of
loss, if any, upon the sale or redemption of Units or the disposition
of Equity Securities held by the Trust will generally be considered
a capital loss except in the case of a dealer or a financial institution
and, in general, will be long-term if the Unit holder has held
his Units for more than one year. Unit holders should consult
their tax advisers regarding the recognition of such capital gains
and losses for Federal income tax purposes.
4. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by the
Trust, including fees of the Trustee and the Evaluator.
Dividends Received Deduction. A corporation that owns Units will
generally be entitled to a 70% dividends received deduction with
respect to such Unit holder's pro rata portion of dividends received
by the Trust (to the extent such dividends are taxable as ordinary
income, as discussed above) in the same manner as if such corporation
directly owned the Equity Securities paying such dividends (other
than corporate Unit holders, such as "S" corporations, which are
not eligible for the deduction because of their special characteristics
and other than for purposes of special taxes such as the accumulated
earnings tax and the personal holding corporation tax). However,
a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility
of dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally
be held at least 46 days (as determined under Section 246(c) of
the Code). Final regulations have been recently issued which address
special rules that must be considered in determining whether the
46 day holding requirement is met. Moreover, the allowable percentage
of the deduction will be reduced from 70% if a corporate Unit
holder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would
affect the dividends received deduction have been introduced.
Unit holders should consult with their tax advisers with respect
to the limitations on and possible modifications to the dividends
received deduction.
Recognition of Taxable Gain or Loss Upon Disposition of Securities
by the Trust or Disposition of Units. As discussed above, a Unit
holder may recognize taxable gain (or loss) when an Equity Security
is disposed of by the Trust or if the Unit holder disposes of
a Unit. For taxpayers other than corporations, net capital gains
are subject to a maximum stated marginal tax rate of 28%. However,
it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences
at which ordinary income and capital gains are taxed.
The Revenue Reconciliation Act of 1993 (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Tax Act, the Tax Act includes a provision
that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993.
Unit holders and prospective investors should consult with their
tax advisers regarding the potential effect of this provision
on their investment in Units.
Special Tax Consequences of In-Kind Distributions Upon Redemption
of Units or Termination of the Trust. As discussed in "Rights
of Unit Holders-How are Income and Capital Distributed?", under
certain circumstances a Unit holder who owns at least 2,500 Units
may request an In-Kind Distribution upon the redemption of Units
or the termination of the Trust. The Unit holder requesting an
In-Kind Distribution will be liable for expenses related thereto
(the "Distribution Expenses") and the amount of such In-Kind Distribution
will be reduced by the amount of the Distribution Expenses. See
"Rights of Unit Holders-How are Income and Capital Distributed?"
As previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unit holder is considered as owning
a pro rata portion of each of the Trust assets for Federal income
tax purposes. The receipt of an In-Kind Distribution upon the
redemption of Units or the termination
Page 7
of the Trust would be deemed an exchange of such Unit holder's
pro rata portion of each of the shares of stock and other assets
held by the Trust in exchange for an undivided interest in whole
shares of stock plus, possibly, cash.
There are generally three different potential tax consequences
which may occur under an In-Kind Distribution with respect to
each Equity Security owned by the Trust. An "Equity Security"
for this purpose is a particular class of stock issued by a particular
corporation. If the Unit holder receives only whole shares of
an Equity Security in exchange for his or her pro rata portion
in each share of such security held by the Trust, there is no
taxable gain or loss recognized upon such deemed exchange pursuant
to Section 1036 of the Code. If the Unit holder receives whole
shares of a particular Equity Security plus cash in lieu of a
fractional share of such Equity Security, and if the fair market
value of the Unit holder's pro rata portion of the shares of such
Equity Security exceeds his tax basis in his pro rata portion
of such Equity Security, taxable gain would be recognized in an
amount not to exceed the amount of such cash received, pursuant
to Section 1031(b) of the Code. No taxable loss would be recognized
upon such an exchange pursuant to Section 1031(c) of the Code,
whether or not cash is received in lieu of a fractional share.
Under either of these circumstances, special rules will be applied
under Section 1031(d) of the Code to determine the Unit holder's
tax basis in the shares of such particular Equity Security which
he receives as part of the In-Kind Distribution. Finally, if a
Unit holder's pro rata interest in an Equity Security does not
equal a whole share, he may receive entirely cash in exchange
for his pro rata portion of a particular Equity Security. In such
case, taxable gain or loss is measured by comparing the amount
of cash received by the Unit holder with his tax basis in such
Equity Security.
Because the Trust will own many Equity Securities, a Unit holder
who requests an In-Kind Distribution will have to analyze the
tax consequences with respect to each Equity Security owned by
the Trust. In analyzing the tax consequences with respect to each
Equity Security, such Unit holder must allocate the Distribution
Expenses among the Equity Securities (the "Allocable Expenses").
The Allocable Expenses will reduce the amount realized with respect
to each Equity Security so that the fair market value of the shares
of such Equity Security received (if any) and cash received in
lieu thereof (as a result of any fractional shares) by such Unit
holder should equal the amount realized for purposes of determining
the applicable tax consequences in connection with an In-Kind
Distribution. A Unit holder's tax basis in shares of such Equity
Security received will be increased by the Allocable Expenses
relating to such Equity Security. The amount of taxable gain (or
loss) recognized upon such exchange will generally equal the sum
of the gain (or loss) recognized under the rules described above
by such Unit holder with respect to each Equity Security owned
by the Trust. Unit holders who request an In-Kind Distribution
are advised to consult their tax advisers in this regard.
General. Each Unit holder will be requested to provide the Unit
holder's taxpayer identification number to the Trustee and to
certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the
proper taxpayer identification number and appropriate certification
are not provided when requested, distributions by the Trust to
such Unit holder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions
by the Trust will generally be subject to United States income
taxation and withholding in the case of Units held by non-resident
alien individuals, foreign corporations or other non-United States
persons. Such persons should consult their tax advisers.
Unit holders will be notified annually of the amounts of income
dividends includable in the Unit holder's gross income and amounts
of Trust expenses which may be claimed as itemized deductions.
Dividend income and long-term capital gains may also be subject
to state and local taxes. Investors should consult their tax advisers
for specific information on the tax consequences of particular
types of distributions.
Unit holders desiring to purchase Units for tax-deferred plans
and IRAs should consult their broker for details on establishing
such accounts. Units may also be purchased by persons who already
have self-directed plans established. See "Why are Investments
in the Trust Suitable for Retirement Plans?"
Page 8
In the opinion of Carter, Ledyard & Milburn, Special Counsel to
the Trust for New York tax matters, under the existing income
tax laws of the State of New York, the Trust is not an association
taxable as a corporation and the income of the Trust will be treated
as the income of the Unit holders thereof.
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to
capital gains and income received in each of the foregoing plans
is deferred until distributions are received. Distributions from
such plans are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred
rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and
should consult their attorneys or tax advisers with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are Equity Securities?
The Trust consists of different issues of Equity Securities issued
by companies which have significant ties with or are headquartered
in the Southeast and are listed on a national securities exchange
or the NASDAQ National Market System or traded in the over-the-counter
market. See "What are the Equity Securities Selected for Southeast
Value Trust, Series 1?" for a general description of the companies.
The Trust consists of such of the Equity Securities listed under
"Schedule of Investments" as may continue to be held from time
to time in the Trust and any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Trust
Agreement together with cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Equity Securities. However, should
any contract for the purchase of any of the Equity Securities
initially deposited hereunder fail, the Sponsor will, unless substantially
all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Equity Securities in accordance with
the Trust Agreement, refund the cash and sales charge attributable
to such failed contract to all Unit holders on the next distribution
date.
Because certain of the Equity Securities from time to time may
be sold under certain circumstances described herein, and because
the proceeds from such events will be distributed to Unit holders
and will not be reinvested, no assurance can be given that the
Trust will retain for any length of time its present size and
composition. Although the Portfolio is not managed, the Sponsor
may instruct the Trustee to sell Equity Securities under certain
limited circumstances. Pursuant to the Indenture and with limited
exceptions, the Trustee may sell any securities or other property
acquired in exchange for Equity Securities such as those acquired
in connection with a merger or other transaction. If offered such
new or exchanged securities or property, the Trustee shall reject
the offer. However, in the event such securities or property are
nonetheless acquired by the Trust, they may be accepted for deposit
in the Trust and either sold by the Trustee or held in the Trust
pursuant to the direction of the Sponsor (who may rely on the
advice of the Portfolio Supervisor). See "How May Equity Securities
be Removed from the Trust?" Equity Securities, however, will not
be sold by the Trust to take advantage of market fluctuations
or changes in anticipated rates of appreciation or depreciation.
Whether or not the Equity Securities are listed on a national
securities exchange, the principal trading market for the Equity
Securities may be in the over-the-counter market. As a result,
the existence of a liquid trading market for the Equity Securities
may depend on whether dealers will make a market in the Equity
Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity
Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. In addition, the Trust may be
restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions,
Page 9
and the value of the Trust, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
Risk Factors. An investment in Units in the Trust 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, some inherent risks exist due to the concentration
of the Equity Securities within the Southeast, although a number
of companies have significant business activities outside the
Southeast. Unpredictable factors include governmental, political,
economic and fiscal policies of the Southeast which may have an
adverse effect on the performance of the issuers which have significant
business activities within the Southeast. In addition, regional
influences may affect the performance of issuers, particularly
if an economic downturn or contraction occurs throughout the Southeast.
An investment in Units should be made with an understanding of
the risks which an investment in common stocks entails, including
the risk that the financial condition of the issuers of the Equity
Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore
the value of the Units may decline. Common stocks are especially
susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions
of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic
expansion or contraction, and global or regional political, economic
or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that
are generally subordinate to those of creditors of, or holders
of debt obligations or preferred stocks of, such issuers. Shareholders
of common stocks of the type held by the Trust have a right to
receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and have a right to participate
in amounts available for distribution by the issuer only after
all other claims on the issuer have been paid or provided for.
Common stocks do not represent an obligation of the issuer and,
therefore, do not offer any assurance of income or provide the
same degree of protection of capital as do debt securities. The
issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the
rights of holders of common stock with respect to assets of the
issuer upon liquidation or bankruptcy. The value of common stocks
is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Equity Securities
in the Portfolio may be expected to fluctuate over the life of
the Trust to values higher or lower than those prevailing on the
Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners
of the entity, have generally inferior rights to receive payments
from the issuer in comparison with the rights of creditors of,
or holders of debt obligations or preferred stocks issued by,
the issuer. Cumulative preferred stock dividends must be paid
before common stock dividends and any cumulative preferred stock
dividend omitted is added to future dividends payable to the holders
of cumulative preferred stock. Preferred stockholders are also
generally entitled to rights on liquidation which are senior to
those of common stockholders.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity Securities, the Trustee
will have the right to vote all of the voting stocks in the Trust
and will vote such stocks in accordance with the instructions
of the Sponsor.
The Underwriter has acquired or will acquire the Equity Securities
for the Sponsor and thereby may benefit. The Underwriter in its
general securities business acts as agent or principal in connection
with the purchase and sale of equity securities, including the
Equity Securities in the Trust, and may act as a market maker
in certain of the Equity Securities. The Underwriter also from
time to time may issue reports on and make recommendations relating
to equity securities, which may include the Equity Securities.
The Underwriter has performed investment banking services for
certain of the issuers of the Equity Securities.
Page 10
How Were the Equity Securities Selected?
Companies included in the Southeast Value Trust were selected
for their outstanding growth potential and attractive share prices.
J.C. Bradford & Co. began by using sophisticated computer screening
techniques to apply a "contrarian investment philosophy" of identifying
companies which have been "out of favor" or underperformed the
S&P during the past twelve months. Fundamental analysis by J.C.
Bradford & Co. professional research analysts was applied to select
companies which are sound financially with good future growth
prospects. Diversification was a final consideration, resulting
in a portfolio mix of small, medium and large capitalization companies
in numerous industries. If demand increases and investor sentiment
shifts, the Trust's portfolio offers value and opportunity for
price appreciation. Successful long-term equity investing means
buying and holding sound companies. This requires patience and
discipline since news may not always be positive and it may take
time for cycles to change.
What are the Equity Securities Selected for Southeast Value Trust,
Series 1?
AppleSouth, Inc., headquartered in Madison, Georgia, operates
a chain of casual restaurants under the name "Applebee's Neighborhood
Grill & Bar." The company also holds the exclusive development
rights for Applebee's restaurants, located in the southeastern,
western and central United States. The company also operates "Hardee's,"
"Gianni's Little Italy" and "Tomato Rumba's Pastaria Grill" restaurants.
Catherine's Stores Corporation, through its wholly-owned subsidiary,
Catherine's, Inc., is a specialty retailer of large-size women's
apparel. The company is headquartered in Memphis, Tennessee, and
operates throughout the United States. The stores, operated under
the names of "Catherine's," "PS...Plus Sizes," "Plus Savings,"
and "The Answer," offer sportswear, dresses, intimate apparel,
coats and accessories.
Columbia/HCA Healthcare Corporation, headquartered in Nashville,
Tennessee, is a healthcare services company that operates general
and acute-care medical services in specialty hospitals in the
United States and abroad. The company also operates diagnostic
centers, cardiac rehabilitation facilities, ambulatory surgery
centers, physical therapy centers, radiation oncology units and
other specialty medical centers.
Comcast Corporation, headquartered in Philadelphia, Pennsylvania,
is a communications company with domestic and international interests
in cable television, television programming and wireless and wireline
telecommunications. The company provides cable service to numerous
states. In addition, Comcast Corporation also has a majority interest
in QVC, Inc., an electronic retailer.
Coventry Corporation, headquartered in Nashville, Tennessee, provides
comprehensive healthcare services through health maintenance organizations
located in Pittsburgh-Harrisburg and Beaver Country, Pennsylvania
and St. Louis, Missouri. American Service Companies, a subsidiary,
markets and underwrites policies that reimburse individuals for
hospital and major medical expenses.
Cracker Barrel Old Country Store, Inc., headquartered in Lebanon,
Tennessee, owns and operates "Country Store" restaurants which
are located throughout the United States along interstate highways.
The restaurants feature home-style country cooking, such as country
ham, fish, ribs, roast beef and sandwiches. The restaurants also
have gift shops attached.
Dovatron International, Inc., headquartered in Boulder, Colorado,
is a global outsourcing supplier of a broad range of electronic
manufacturing products and services operating in the United States,
Europe and the Pacific Rim. The company also produces and markets
precision-milled tooling templates and manufactures small form
factor circuits, under the "E.S.P." name for the embedded control
industry.
Federal Express Corporation provides overnight, door-to-door delivery
of packages and documents through its own air-ground transportation
system. The company, headquartered in Memphis, Tennessee, also
provides international freight service.
First Commerce Corporation is a multibank holding company which
provides commercial banking and financial services through its
subsidiaries in Louisiana. The company's banks offer individual,
commercial, financial, agricultural, real estate, credit card
and other loans. The company is headquartered in New Orleans,
Louisiana. Its subsidiaries serve Louisiana and southern Mississippi
through branch offices.
Page 11
Fossil, Inc., headquartered in Richardson, Texas, designs, develops,
markets and distributes fashion watches and other accessories
principally under the "Fossil" and "Relic" brand names. The company
sells its products nationwide through major department stores,
such as Dayton Hudson, Dillard's, Federated Department Stores,
May Department Stores, Macy's and Nordstrom, as well as specialty
retail stores.
Fruit of the Loom, Inc. (Class A) manufactures underwear, activewear
and socks. The company produces men's, boy's, women's and girl's
underwear and t-shirts in a variety of styles under the "Fruit
of the Loom" and "BVD" brand names. Fruit of the Loom, Inc. is
headquartered in Chicago, Illinois, and sells its products to
retailers in the United States, Canada, the United Kingdom and
Germany.
Gaylord Entertainment Company, headquartered in Nashville, Tennessee,
owns and operates Opryland USA, an entertainment and resort complex,
which consists of the "Grand Ole Opry," the Opryland Park and
the Opryland Hotel. Gaylord Entertainment Company also owns a music
publishing business, television program production and syndication
business and other related businesses. In addition, the company
owns two cable television networks with a nationwide audience,
three independent television stations, two radio stations and
a cable television system business.
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 rehabilitation
therapy, pharmacy and subacute care services.
Georgia Gulf Corporation, headquartered in Atlanta, Georgia, manufactures
commodity and specialty chemicals which are sold throughout the
United States. Georgia Gulf Corporation's products include chlorine,
caustic soda, sodium chloride, polyvinyl chloride resins and aromatic
chemicals used in the paper, aluminum, plastics, construction,
packaging, adhesives and solvents industries.
Haverty Furniture Company, Inc., headquartered in Atlanta, Georgia,
is a furniture retailer engaged in the retail sale of household
furniture, appliances, bedding and floor coverings. The company's
stores also sell living room, bedroom and dining room furniture,
bedding and floor coverings. Haverty Furniture Company, Inc. operates
retail furniture showrooms throughout the southeast and southwest
United States.
Home Depot, Inc., headquartered in Atlanta, Georgia, retails building
materials and home improvement products. The company's stores
sell plumbing, heating and electrical supplies, lumber, floor
and wall coverings, hardware, tools and paint. Home Depot, Inc.
operates stores throughout the United States and Canada.
Humana, Inc., headquartered in Louisville, Kentucky, operates
health insurance businesses. The company provides managed healthcare
services through health maintenance organizations (HMOs) and preferred
provider organizations (PPOs). Humana, Inc. markets healthcare
services primarily to employers and other groups, as well as to
medicare-eligible individuals. The company operates health plans
in numerous states.
MCI Communications Corporation provides a wide spectrum of domestic
and international voice and data communications services to individuals,
businesses and government agencies. Based in Washington, D.C.,
the company offers long-distance services throughout the United
States as well as internationally. In addition, MCI Communications
Corporation offers domestic and international time-sensitive electronic
mailing, 800 Service, 900 Service, operator assistance and fax
services.
NCI Building Systems, Inc., headquartered in Houston, Texas, designs,
manufactures and markets preengineered metal building systems
and components for commercial, industrial, agricultural and community
service uses. The company markets its building systems and components
through both a direct sales force and an authorized builder organization
under the trade names "Metallic Buildings," "Mid-West Steel Buildings,"
"NCI" and others.
Nucor Corporation, headquartered in Charlotte, North Carolina,
manufactures steel products using electric arc furnaces and automated
rolling mills. Products include hot-rolled and cold-finished steel
shapes, steel joists and girders, wide flange beams, heavy structural
steel products, steel deck and steel grinding balls. Customers
include steel service centers, fabricators and manufactures and
general contractors.
Page 12
Outback Steakhouse, Inc., headquartered in Tampa, Florida, operates
full-service restaurants under the "Outback Steakhouse" name.
The restaurants serve a dinner menu of steaks, ribs, chicken,
fish and pasta and also provide full liquor service. The restaurants
are located in the midwestern and southeastern United States.
Performance Food Group Company, headquartered in Nashville, Tennessee,
markets and distributes a variety of food and food-related products
to restaurants, hotels, cafeterias, schools, hospitals and other
businesses and institutions located primarily in the southern
and midwestern United States. The company's items include private
label food products, canned and dry groceries, poultry, meats,
seafood, fresh produce, paper and cleaning supplies and restaurant
equipment.
River Oaks Furniture, Inc., headquartered in Fulton, Mississippi,
designs and manufactures upholstered stationary furniture consisting
of sofas, loveseats and chairs in four plants in northeast Mississippi.
Products are sold under the brand names "River Oaks," "River Crest,"
"Roaring River," "River Oaks First Class Seating," "Gaines" and
"Montana."
Russell Corporation, headquartered in Alexander City, Alabama,
is a vertically integrated designer, manufacturer and marketer
of leisure apparel, athletic uniforms and a line of lightweight
yarn-dyed woven fabrics. The company's products are marketed under
trade names including "Russell Athletic," "Jerzees" and "Cross
Creek." Apparel is marketed to sporting goods dealers, department
and specialty stores and mail order houses.
ShoLodge, Inc., headquartered in Gallatin, Tennessee, is the exclusive
franchisor of the Shoney's Inn chain. The company owns or manages
these hotels, owns a chain of AmeriSuites hotels and operates
restaurants under a franchise agreement.
Steel Technologies, Inc., headquartered in Louisville, Kentucky,
is an intermediate steel company which processes flat rolled steel
for industrial customers who specify thickness, width, temper
and finish. Steel Technologies, Inc.'s customers tend to be in
the automotive, appliance, communications, electrical, machinery
and office equipment industries. The company's plants are located
in Kentucky, Maryland, Michigan and Indiana.
Stein Mart, Inc., headquartered in Jacksonville, Florida, is a
retail chain offering traditional department store products, including
apparel for men, women and children, as well as accessories, gifts,
linens and shoes, at discounted prices. Stein Mart, Inc., operates
department stores throughout the southeast, the south and parts
of the midwestern United States.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before
making a decision to invest in the Trust.
The value of the Equity Securities will fluctuate over the life
of the Trust and may be more or less than the price at which they
were deposited in the Trust. The Equity Securities may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for
any default, failure or defect in any Security. In the event of
a notice that any Equity Security will not be delivered ("Failed
Contract Obligations") to the Trust, the Sponsor is authorized
under the Indenture to direct the Trustee to acquire other Equity
Securities ("Replacement Securities"). Any Replacement Security
will be identical to those which were the subject of the failed
contract. The Replacement Securities must be purchased within
20 days after delivery of the notice of a failed contract and
the purchase price may not exceed the amount of funds reserved
for the purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in
the event of a failed contract, the Sponsor will refund the sales
charge attributable to such Failed Contract Obligations to all
Unit holders of the Trust and the Trustee will distribute the
principal attributable to such Failed Contract Obligations not
more than 120 days after the date on which the Trustee received
a notice from the Sponsor that a Replacement Security would not
be deposited in the Trust. In addition, Unit holders should be
aware that, at the time of receipt of such principal, they may
not be able to reinvest such proceeds in other securities at a
yield equal to or in excess of the yield which such proceeds would
have earned for Unit holders of the Trust.
Page 13
The Indenture also authorizes the Sponsor to increase the size
of the Trust and the number of Units thereof by the deposit of
additional Equity Securities in the Trust and the issuance of
a corresponding number of additional Units.
The Trust consists of the Equity Securities listed under "Schedule
of Investments" (or contracts to purchase such Securities) as
may continue to be held from time to time in the Trust and any
additional Equity Securities acquired and held by the Trust pursuant
to the provisions of the Indenture (including provisions
with respect to deposits into the Trust of Equity Securities in
connection with the issuance of additional Units).
Once all of the Equity Securities in the Trust are acquired, the
Trustee will have no power to vary the investments of the Trust,
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unit holder's investment, but
may dispose of Equity Securities only under limited circumstances.
See "How May Equity Securities be Removed from the Trust?"
To the best of the Sponsor's knowledge, there is no litigation
pending as of the Initial Date of Deposit in respect of any Equity
Security which might reasonably be expected to have a material
adverse effect on the Trust. At any time after the Initial Date
of Deposit, litigation may be instituted on a variety of grounds
with respect to the Equity Securities. The Sponsor is unable to
predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse
effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Equity Securities in the Trust, plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust, plus a sales charge of 4.90% (equivalent to 5.152% of the
net amount invested) subject to reduction beginning
, 1996, divided by the amount of Units of the Trust outstanding.
During the initial offering period, the Sponsor's Repurchase Price
is based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust divided by the number of Units of the Trust
outstanding. For secondary market sales after the completion of
the initial offering period, the Public Offering Price is also
based on the aggregate underlying value of the Equity Securities
in the Trust, plus or minus cash, if any, in the Income and Capital
Accounts of the Trust, plus a maximum sales charge of 4.90% of
the Public Offering Price (equivalent to 5.152% of the net amount
invested) divided by the number of outstanding Units of the Trust.
The minimum purchase of the Trust is $2,000. The applicable sales
charge for both primary and secondary market sales is reduced
by a discount as indicated below for volume purchases:
Number of Units Discount
_______________ ________
10,000 to 24,999 0.50%
25,000 to 49,999 0.70%
50,000 to 74,999 0.90%
75,000 to 99,999 1.40%
100,000 or more 1.90%
Any such reduced sales charge shall be the responsibility of the
selling Underwriter or dealer. The reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one day from any one underwriter or dealer. Additionally,
Units purchased in the name of the spouse of a purchaser or in
the name of a child of such purchaser under 21 years of age will
be deemed, for the purposes of calculating the applicable sales
charge, to be additional purchases by the purchaser. The reduced
sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary
account. The purchaser must inform the Underwriter or dealer of
any such combined purchase prior to the sale in order to obtain
the indicated discount. In addition, with respect to the employees,
officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law,
and trustees, custodians or fiduciaries for the benefit of such
persons) of the Sponsor and the Underwriter and their subsidiaries,
the sales charge is reduced by 3.5% of the Public Offering Price
for purchases of Units during the primary and secondary public
offering periods.
Page 14
Had the Units of the Trust been available for sale on the business
day prior to the Initial Date of Deposit, the Public Offering
Price would have been as indicated in "Summary of Essential Information."
The Public Offering Price of Units on the date of the prospectus or
during the initial offering period may vary from the amount stated
under "Summary of Essential Information" in accordance with fluc-
tuations in the prices of the underlying Equity Securities. During
the initial offering period, the aggregate value of the Units of the
Trust shall be determined on the basis of the aggregate underlying value
of the Equity Securities therein plus or minus cash, if any, in
the Income and Capital Accounts of the Trust. The aggregate underlying
value of the Equity Securities will be determined in the following
manner: if the Equity Securities are listed on a national securities
exchange or the NASDAQ National Market System, this evaluation
is generally based on the closing sale prices on that exchange
or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange or system, at the closing ask prices.
If the Equity Securities are not so listed or, if so listed and
the principal market therefor is other than on the exchange, the
evaluation shall generally be based on the current ask prices
on the over-the-counter market (unless it is determined that these
prices are inappropriate as a basis for evaluation). If current
ask prices are unavailable, the evaluation is generally determined
(a) on the basis of current ask prices for comparable securities,
(b) by appraising the value of the Equity Securities on the ask
side of the market or (c) by any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Equity Securities therein, plus or minus cash, if
any, in the Income and Capital Accounts of the Trust plus the
applicable sales charge.
Although payment is normally made three 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 three business days following such order
or shortly thereafter. See "Rights of Unit Holders-How may Units
be Redeemed?" for information regarding the ability to redeem
Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Equity Securities are deposited by the
Sponsor, Units will be distributed to the public at the then current
Public Offering Price. The initial offering period may be up to
approximately 360 days. During such period, the Sponsor may deposit
additional Equity Securities in the Trust and create additional
Units. Units reacquired by the Sponsor during the initial offering
period (at prices based upon the aggregate underlying value of
the Equity Securities in the Trust plus or minus a pro rata share
of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon
the termination of the initial offering period, unsold Units created
or reacquired during the initial offering period will be sold
or resold at the then current Public Offering Price.
Page 15
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Sales initially will be made to
dealers and others at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price, and, for secondary
market sales, 3.2% of the Public Offering Price (or 65% of the
then current maximum sales charge after , 1996).
Effective on each , commencing
, 1996, such sales charge will be reduced by 1/2 of 1%
to a minimum sales charge of 3.0%. However, resales of Units of
the Trust by such dealers and others to the public will be made
at the Public Offering Price described in the prospectus. The
Sponsor reserves the right to change the amount of the concession
or agency commission from time to time. Certain commercial banks
may be making Units of the Trust available to their customers
on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts
indicated in the fourth preceding sentence. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Units; however,
the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular
agency transactions are not permitted under such Act. In Texas
and in certain other states, any banks making Units available
must be registered as broker/dealers under state law.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission
equal to 4.90% of the Public Offering Price of the Units (equivalent
to 5.152% of the net amount invested), less any reduced sales
charge for quantity purchases as described under "Public Offering-How
is the Public Offering Price Determined?" See "Underwriting" for
information regarding the receipt of the excess gross sales commissions
by the Sponsor from the Underwriter and additional concessions
available to Underwriters, dealers and others. In addition, the
Sponsor may be considered to have realized a profit or to have
sustained a loss, as the case may be, in the amount of any difference
between the cost of the Equity Securities to the Trust (which
is based on the Evaluator's determination of the aggregate offering
price of the underlying Equity Securities of such Trust on the
Initial Date of Deposit as well as subsequent deposits) and the
cost of such Equity Securities to the Sponsor. See "Underwriting"
and Note (2) of "Schedule of Investments." During the initial
offering period, the Underwriter also may realize profits or sustain
losses as a result of fluctuations after the Initial Date of Deposit
in the Public Offering Price received by the Underwriter upon
the sale of Units.
In maintaining a market for the Units, the Sponsor and Underwriter
will also realize profits or sustain losses in the amount of any
difference between the price at which Units are purchased and
the price at which Units are resold (which price includes a sales
charge of 4.90% subject to reduction beginning , 1996)
or redeemed. The secondary market public offering price of Units
may be greater or less than the cost of such Units to the Sponsor
or the Underwriter.
Will There be a Secondary Market?
After the initial offering period, although they are not obligated
to do so, both the Sponsor and Underwriter intend to maintain
a market for the Units and continuously offer to purchase Units
at prices, subject to change at any time, based upon the aggregate
underlying value of the Equity Securities in the Trust plus or
minus cash, if any, in the Income and Capital Accounts of the
Trust. All expenses incurred in maintaining a secondary market,
other than the fees of the Evaluator and the costs of the Trustee
in transferring and recording the ownership of Units, will be
borne by the Sponsor. If the supply of Units exceeds demand, or
for some other business reason, the Sponsor may discontinue purchases
of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE UNDERWRITER OR SPONSOR AS
TO CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION
TO THE TRUSTEE.
Page 16
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 three
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. Record ownership may occur before settlement.
Certificates will be issued in fully registered form, transferable
only on the books of the Trustee in denominations of one Unit
or any multiple thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form.
The Trustee will maintain an account for each such Unit holder and
will credit each such account with the number of Units purchased
by that Unit holder. Within two business days of the issuance or
transfer of Units held in uncertificated form, the Trustee will send
to the registered owner of Units a written initial transaction
statement containing a description of the Trust; the number of Units
issued or transferred; the name, address and taxpayer identification
number, if any, of the new registered owner; a notation of any liens
and restrictions of the issuer and any adverse claims to which such
Units are or may be subject or a statement that there are no such
liens, restrictions or adverse claims; and the date the transfer was
registered. Uncertificated Units are transferable through the same
procedures applicable to Units evidenced by certificates (described
above), except that no certificate need be presented to the Trustee
and no certificate will be issued upon the transfer unless requested
by the Unit holder. A Unit holder may at any time request the Trustee
to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to
any of the securities in the Trust on or about the Income Distribution
Dates to Unit holders of record on the preceding Income Record
Date. See "Summary of Essential Information." Persons who purchase
Units will commence receiving distributions only after such person
becomes a record owner. Notification to the Trustee of the transfer
of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.
The pro rata share of cash in the Capital Account of the Trust
will be computed as of the fifteenth day of each month. Proceeds
received on the sale of any Equity Securities in the Trust, to
the extent not used to meet redemptions of Units or pay expenses,
will, however, be distributed on the last day of each month to
Unit holders of record on the fifteenth day of such month if the
amount available for distribution equals at least $0.01 per Unit.
The Trustee is not required to pay interest on funds held in the
Capital Account of a Trust (but may itself earn interest thereon
and therefore benefit from the use of such funds). Notwithstanding,
distributions of funds in the Capital Account, if any, will be
made on the last day of each December to Unit holders of record
as of December 15. See "What is the Federal Tax Status of Unit
Holders?"
Page 17
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of any
distribution made by the Trust if the Trustee has not been furnished
the Unit holder's tax identification number in the manner required
by such regulations. Any amount so withheld is transmitted to
the Internal Revenue Service and may be recovered by the Unit
holder only when filing a tax return. Under normal circumstances
the Trustee obtains the Unit holder's tax identification number
from the selling broker. However, a Unit holder should examine
his or her statements from the Trustee to make sure that the Trustee
has been provided a certified tax identification number in order
to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should
be provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit
holder will, upon surrender of his Units for redemption, receive:
(i) the pro rata share of the amounts realized upon the disposition
of Equity Securities, unless he elects an In-Kind Distribution
as described below and (ii) a pro rata share of any other assets
of the Trust, less expenses of the Trust. Not less than 60 days
prior to the Mandatory Termination Date of the Trust, the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (an "In-Kind Distribution"),
if such Unit holder owns at least 2,500 Units of the Trust, rather
than to receive payment in cash for such Unit holder's pro rata
share of the amounts realized upon the disposition by the Trustee
of Equity Securities. An In-Kind Distribution will be reduced by
customary transfer and registration charges. To be effective, the
election form, together with surrendered certificates and other
documentation required by the Trustee, must be returned to the
Trustee at least five business days prior to the Mandatory
Termination Date of the Trust. A Unit holder may, of course, at
any time after the Equity Securities are distributed, sell all
or a portion of the shares.
The Trustee will credit to the Income Account of the Trust any
dividends received on the Equity Securities therein. All other
receipts (e.g. return of capital, etc.) are credited to the Capital
Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within
the Trust for state and local taxes, if any, and any governmental
charges payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable
period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar
year was a Unit holder of the Trust the following information
in reasonable detail: (1) a summary of transactions in the Trust
for such year; (2) any Equity Securities sold during the year
and the Equity Securities held at the end of such year by the
Trust; (3) the redemption price per Unit based upon a computation
thereof on the 31st day of December of such year (or the last
business day prior thereto); and (4) amounts of income and capital
distributed during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender
to the Trustee at its corporate trust office in the City of New
York of the certificates representing the Units to be redeemed, or in
the case of uncertificated Units, delivery of a request for redemption,
duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed as explained above (or by providing satisfactory
indemnity, as in connection with lost, stolen or destroyed certificates),
and payment of applicable governmental charges, if any. No redemption
fee will be charged. On the third business day following such tender,
the Unit holder will be entitled to receive in cash an amount for each
Unit equal to the Redemption Price per Unit next computed after receipt
by the Trustee of such tender of Units. The "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 standard 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.
Page 18
Any Unit holder tendering 2,500 Units or more for redemption may
request by written notice submitted at the time of tender from
the Trustee in lieu of a cash redemption a distribution of shares
of Equity Securities in an amount and value of Equity Securities
per Unit equal to the Redemption Price Per Unit as determined
as of the evaluation next following tender. To the extent possible,
in-kind distributions ("In-Kind Distributions") shall be made
by the Trustee through the distribution of each of the Equity
Securities in book-entry form to the account of the Unit holder's
bank or broker-dealer at the Depository Trust Company. An In-Kind
Distribution will be reduced by customary transfer and registration
charges. The tendering Unit holder will receive his pro rata number
of whole shares of each of the Equity Securities comprising the
portfolio and cash from the Capital Account equal to the fractional
shares to which the tendering Unit holder is entitled. The Trustee
may adjust the number of shares of any issue of Equity Securities
included in a Unit holder's In-Kind Distribution to facilitate
the distribution of whole shares, such adjustment to be made on
the basis of the value of Equity Securities on the date of tender.
If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unit holder, the Trustee
may sell Equity Securities in the manner described above.
Under regulations issued by the Internal Revenue Service, the
Trustee is required to withhold a specified percentage of the
principal amount of a Unit redemption if the Trustee has not been
furnished the redeeming Unit holder's tax identification number
in the manner required by such regulations. Any amount so withheld
is transmitted to the Internal Revenue Service and may be recovered
by the Unit holder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unit holder's tax identification
number from the selling broker. However, any time a Unit holder elects
to tender Units for redemption, such Unit holder should make sure that
the Trustee has been provided a certified tax identification
number in order to avoid this possible "back-up withholding."
In the event the Trustee has not been previously provided such
number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds
are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account of the Trust.
The Trustee is empowered to sell Equity Securities of the Trust
in order to make funds available for redemption. To the extent
that Equity Securities are sold, the size and diversity of the
Trust will be reduced. Such sales may be required at a time when
Equity Securities would not otherwise be sold and might result
in lower prices than might otherwise be realized.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
aggregate underlying value of the Equity Securities in the Trust
plus or minus cash, if any, in the Income and Capital Accounts
of the Trust. The Redemption Price per Unit is the pro rata share
of each Unit determined by the Trustee by adding: (1) the cash
on hand in the Trust other than cash deposited in the Trust to
purchase Equity Securities not applied to the purchase of such
Equity Securities; (2) the aggregate value of the Equity Securities
held in the Trust, as determined by the Evaluator on the basis
of the aggregate underlying value of the Equity Securities in
the Trust next computed; and (3) dividends receivable on the Equity
Securities trading ex-dividend as of the date of computation;
and deducting therefrom: (1) amounts representing any applicable
taxes or governmental charges payable out of the Trust; (2) any
amounts owing to the Trustee for its advances; (3) an amount representing
estimated accrued expenses of the Trust, including but not limited
to fees and expenses of the Trustee (including legal and auditing
fees), the Evaluator and supervisory fees, if any; (4) cash held
for distribution to Unit holders of record of the Trust as of
the business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results
of such computation by the number of Units of the Trust outstanding
as of the date thereof.
Page 19
The aggregate value of the Equity Securities will be determined
in the following manner: if the Equity Securities are listed on
a national securities exchange or the NASDAQ National Market System,
this evaluation is generally based on the closing sale prices
on that exchange or that system (unless it is determined that
these prices are inappropriate as a basis for valuation) or, if
there is no closing sale price on that exchange or system, at
the closing bid prices. If the Equity Securities are not so listed
or, if so listed and the principal market therefor is other than
on the exchange, the evaluation shall generally be based on the
current bid prices on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current
bid prices are unavailable, the evaluation is generally determined
(a) on the basis of current bid prices for comparable securities,
(b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on the New York Stock Exchange is restricted or any emergency
exists, as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the
Securities and Exchange Commission may by order permit. Under
certain extreme circumstances, the Sponsor may apply to the Securities
and Exchange Commission for an order permitting a full or partial
suspension of the right of Unit holders to redeem their Units.
The Trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor or Underwriter?
The Trustee shall notify the Sponsor or Underwriter of any tender
of Units for redemption. If the Sponsor's or Underwriter's bid
in the secondary market at that time equals or exceeds the Redemption
Price per Unit, it may purchase such Units by notifying the Trustee
before 1:00 p.m. eastern standard time on the same business day
and by making payment therefor to the Unit holder not later than
the day on which the Units would otherwise have been redeemed
by the Trustee. Units held by the Sponsor or Underwriter may be
tendered to the Trustee for redemption as any other Units. In the
event the Sponsor or Underwriter does not purchase Units, the Trustee
may sell Units tendered for redemption in the over-the-counter
market, if any, as long as the amount to be received by the Unit
holder is equal to the amount he would have received on redemption
of the Units.
The offering price of any Units acquired by the Sponsor or Underwriter
will be in accord with the Public Offering Price described in
the then effective prospectus describing such Units. Any profit
or loss resulting from the resale or redemption of such Units
will belong to the Sponsor or Underwriter.
How May Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or
the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that
the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in the event that an issuer defaults in the
payment of a dividend that has been declared, that any action
or proceeding has been instituted restraining the payment of dividends
or there exists any legal question or impediment affecting such
Equity Security, that the issuer of the Equity Security has breached
a covenant which would affect the payments of dividends, the credit
standing of the issuer or otherwise impair the sound investment
character of the Equity Security, that the issuer has defaulted
on the payment on any other of its outstanding obligations, that
the price of the Equity Security has declined to such an extent
or other such credit factors exist so that in the opinion of the
Sponsor, the retention of such Equity Securities would be detrimental
to the Trust. Except as stated under "Portfolio - What are Some
Additional Considerations for Investors?" for Failed Obligations,
the acquisition by the Trust of any securities or other property
other than the Equity Securities is prohibited. Pursuant to the
Indenture and with limited exceptions, the Trustee may sell any
securities or other property acquired in exchange for Equity Securities
such as those acquired in connection with a merger or other transaction.
If offered such new or exchanged securities or property, the Trustee
shall reject the offer. However, in the event such securities
or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee
or held in the Trust pursuant to the direction of the Sponsor
(who may rely on the advice of the Portfolio Supervisor). Proceeds
from the sale of Equity Securities (or any securities or other
property received by the Trust in exchange for Equity Securities)
by the Trustee are credited to the Capital Account of the Trust
for distribution to Unit holders or to meet redemptions.
Page 20
The Trustee may also sell Equity Securities designated by the
Sponsor, or if not so directed, in its own discretion, for the
purpose of redeeming Units of the Trust tendered for redemption
and the payment of expenses.
The Sponsor, in designating Equity Securities to be sold by the
Trustee, will generally make selections in order to maintain,
to the extent practicable, the proportionate relationship among
the number of shares of individual issues of Equity Securities.
To the extent this is not practicable, the composition and diversity
of the Equity Securities may be altered. In order to obtain the
best price for the Trust, it may be necessary for the Sponsor
to specify minimum amounts (generally 100 shares) in which blocks
of Equity Securities are to be sold.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
J.C. Bradford & Co., the Underwriter, is one of America's top
ten investment firms located outside New York City. Founded in
1927, J.C. Bradford & Co. is headquartered in Nashville, Tennessee
and currently has over 78 offices, primarily across the southeast.
A major strength of the firm is its research department which
focuses on Southeast corporations, and its national correspondence
network which provides coverage of major U.S. corporations.
J.C. Bradford & Co. is a member of the New York Stock Exchange
and the National Association of Securities Dealers Automated Quotation
System, Inc. (NASDAQ).
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in
1991, acts as Sponsor for successive series of The First Trust
Combined Series, The First Trust Special Situations Trust, The
First Trust Insured Corporate Trust, The First Trust of Insured
Municipal Bonds and The First Trust GNMA. First Trust introduced
the first insured unit investment trust in 1974 and to date more
than $9 billion in First Trust unit investment trusts have been
deposited. The Sponsor's employees include a team of professionals
with many years of experience in the unit investment trust industry.
The Sponsor is a member of the National Association of Securities
Dealers, Inc. and Securities Investor Protection Corporation and
has its principal offices at 1001 Warrenville Road, Lisle, Illinois
60532; telephone number (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 Trust or to any series thereof or to any other Underwriter.
The information is included herein only for the purpose of informing
investors as to the financial responsibility of the Sponsor and
its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon
request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Trust may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Equity Securities. For information relating
to the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
Page 21
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice, the Sponsor is obligated to appoint
a successor trustee promptly. If the Trustee becomes incapable
of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint
a successor as provided in the Indenture. If upon resignation
of a trustee no successor has accepted the appointment within
30 days after notification, the retiring trustee may apply to
a court of competent jurisdiction for the appointment of a successor.
The resignation or removal of a trustee becomes effective only
when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any
merger or consolidation to which a Trustee shall be a party, shall
be the successor Trustee. The Trustee must be a banking corporation
organized under the laws of the United States or any State and
having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit
holders for taking any action or for refraining from taking any
action in good faith pursuant to the Indenture, or for errors
in judgment, but shall be liable only for their own willful misfeasance,
bad faith, gross negligence (ordinary negligence in the case of
the Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Equity Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of the Trust which the Trustee may be required
to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction.
In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or
its affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor Sponsor at rates of compensation deemed
by the Trustee to be reasonable and not exceeding amounts prescribed
by the Securities and Exchange Commission, or (b) terminate the
Indenture and liquidate the Trust as provided herein, or (c) continue
to act as Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is 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 or 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).
Page 22
The Indenture provides that the Trust shall terminate upon the
Mandatory Termination Date indicated herein under "Summary of
Essential Information." The Trust may be liquidated at any time
by consent of 100% of the Unit holders of the Trust or by the
Trustee when the value of the Equity Securities owned by the Trust
as shown by any evaluation, is less 40% of the total value of
Equity Securities deposited in such Trust during the primary
offering period, or in the event that Units of the Trust not
yet sold aggregating more than 60% of the Units of the Trust
are tendered for redemption by the Underwriter, including the
Sponsor. If the Trust is liquidated because of the redemption
of unsold Units of the Trust by the Underwriter, the Sponsor
will refund to each purchaser of Units of the Trust the entire
sales charge and the transaction fees paid by such purchaser.
In the event of termination, written notice thereof will be sent
by the Trustee to all Unit holders of the Trust. Within a reasonable
period after termination, the Trustee will follow the procedures
set forth under "How are Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Equity Securities
will begin to be sold in connection with the termination of the
Trust. The Sponsor will determine the manner, timing and execution
of the sale of the Equity Securities. Written notice of any termination
of the Trust specifying the time or times at which Unit holders
may surrender their certificates for cancellation shall be given
by the Trustee to each Unit holder at his address appearing on
the registration books of the Trust maintained by the Trustee.
At least 60 days prior to the Maturity Date of the Trust the Trustee
will provide written notice thereof to all Unit holders and will
include with such notice a form to enable Unit holders to elect
a distribution of shares of Equity Securities (reduced by customary
transfer and registration charges), if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment
in cash for such Unit holder's pro rata share of the amounts realized
upon the disposition by the Trustee of Equity Securities. To be
effective, the election form, together with surrendered certificates
and other documentation required by the Trustee, must be returned
to the Trustee at least five business days prior to the Mandatory
Termination Date of the Trust. Unit holders not electing a distribution
of shares of Equity Securities will receive a cash distribution
from the sale of the remaining Equity Securities within a reasonable
time after the Trust is terminated. Regardless of the distribution
involved, the Trustee will deduct from the funds of the Trust
any accrued costs, expenses, advances or indemnities provided
by the Trust Agreement, including estimated compensation of the
Trustee and costs of liquidation and any amounts required as a
reserve to provide for payment of any applicable taxes or other
governmental charges. Any sale of Equity Securities in the Trust
upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. The Trustee
will then distribute to each Unit holder his pro rata share of
the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating
to Federal tax law have been passed upon by Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, as counsel for
the Sponsor. Carter, Ledyard & Milburn, will act as counsel for
the Trustee and as special New York tax counsel for the Trust.
Experts
The statement of net assets, including the schedule of investments,
of the Trust at the opening of business on the Initial Date of
Deposit appearing in this Prospectus and Registration Statement
has been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon appearing elsewhere herein and
in the Registration Statement, and is included in reliance upon
such report given upon the authority of such firm as experts in
accounting and auditing.
UNDERWRITING
The Underwriter named below has purchased Units in the following
amount:
<TABLE>
<CAPTION>
Number of
Name Address Units
____ _______ _________
<S> <C> <C>
Underwriter
J.C. Bradford & Co. 330 Commerce Street, Nashville, TN 37201-1809
=========
</TABLE>
Page 23
On the Initial Date of Deposit, the Underwriter of the Trust became
the owner of the Units of the Trust and entitled to the benefits
thereof, as well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the
Units of the Trust will be made at the Public Offering Price described
in the prospectus. Units may also be sold to or through dealers
and others during the initial offering period and in the secondary
market at prices representing a concession or agency commission
as described in "Public Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the
Trust as they become available. The Sponsor will receive from
the Underwriter the difference between the gross sales commission
and the Underwriter concession of 3.5% of the Public Offering
Price.
The Underwriter will receive additional concessions from the Sponsor
based on the final size of the Trust as indicated in the following
table:
<TABLE>
<CAPTION>
Aggregate Monthly Amount Additional Concession
of UIT Units Sold (per $1,000 sold)
________________________ _____________________
<S> <C>
$ 5,000,000 - $ 7,499,999 $1.50
$ 7,500,000 - $ 9,999,999 $2.00
$10,000,000 - $14,999,999 $3.00
$15,000,000 - $19,999,999 $4.00
$20,000,000 or more $5.00
</TABLE>
Aggregate Dollar Amount of UIT Units Sold is based on settled
trades (including sales of UIT Units to the Sponsor in the secondary
market which are resold), net of redemptions.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of an Underwriter or
dealer may be eligible to win other nominal awards for certain
sales efforts, or under which the Sponsor will reallow to any
such Underwriter or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor
pay fees to qualifying Underwriters or dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that the Trust will receive from the Units
sold.
The Sponsor may from time to time in its advertising and sales
materials compare the then current estimated returns on the Trust
and returns over specified periods on other similar Trusts sponsored
by Nike Securities L.P. with returns on other taxable investments
such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the full faith and
credit of the U.S. Government and bank CDs and money market accounts
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal,
but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of the
Trust are described more fully elsewhere in this Prospectus.
Trust performance may be compared to performance on a total return
basis with the Dow Jones Industrial Average, the S&P 500 Composite
Price Stock Index, or performance data from Lipper Analytical
Services, Inc. and Morningstar Publications, Inc. or from publications
such as Money, The New York Times, U.S. News and World Report,
Business Week, Forbes or Fortune. As with other performance data,
performance comparisons should not be considered representative
of the Trust's relative performance for any future period.
Page 24
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 121
We have audited the accompanying statement of net assets, including
the schedule of investments, of The First Trust Special Situations
Trust, Series 121, comprised of Southeast Value Trust, Series
1, at the opening of business on , 1995. This statement
of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net
assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the statement
of net assets is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statement of net assets. Our procedures included
confirmation of the letter of credit held by the Trustee and deposited
in the Trust on , 1995. An audit also includes assessing
the accounting principles used and significant estimates made
by the Sponsor, as well as evaluating the overall presentation
of the statement of net assets. We believe that our audit of the
statement of net assets provides a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above
presents fairly, in all material respects, the financial position
of The First Trust Special Situations Trust, Series 121, comprised
of Southeast Value Trust, Series 1, at the opening of business
on , 1995 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Chicago, Illinois
, 1995
Page 25
Statement of Net Assets
Southeast Value Trust, Series 1
The First Trust Special Situations Trust, Series 121
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Equity Securities represented by
purchase contracts (1) (2) $
========
Units outstanding
========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (3) $
Less sales charge (3) ( )
________
Net Assets $
========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule
of Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $ issued
by Bankers Trust Company has been deposited with the Trustee as
collateral, which is sufficient to cover the monies necessary
for the purchase of the Equity Securities pursuant to contracts
for the purchase of such Equity Securities.
(3) The aggregate cost to investors includes a sales charge
computed at the rate of 4.90% of the Public Offering Price (equivalent
to 5.152% of the net amount invested), assuming no reduction of
sales charge for quantity purchases.
Page 26
Schedule of Investments
Southeast Value Trust, Series 1
The First Trust Special Situations Trust, Series 121
At the Opening of Business on the Initial Date of Deposit
, 1995
<TABLE>
<CAPTION>
Approximate
Percentage Market Cost of
of Aggregate Value Equity
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Equity Securities (1) Price (3) Share to Trust (2)
_________ _______________________________________ _____________ ______ ______________
<C> <S> <C> <C> <C>
APSO AppleSouth, Inc. 1-6% $ $
CATH Catherine's Stores Corporation 1-6%
COL Columbia/HCA Healthcare Corporation 1-6%
CMCSK Comcast Corporation 1-6%
CVTY Coventry Corporation 1-6%
CBRL Cracker Barrel Old Country Store, Inc. 1-6%
DOVT Dovatron International, Inc. 1-6%
FDX Federal Express Corporation 1-6%
FCOM First Commerce Corporation 1-6%
FOSL Fossil, Inc. 1-6%
FTL Fruit of the Loom, Inc. (Class A) 1-6%
GET Gaylord Entertainment Company 1-6%
GHV Genesis Health Ventures, Inc. 1-6%
GGC Georgia Gulf Corporation 1-6%
HAVT Haverty Furniture Company, Inc. 1-6%
HD Home Depot, Inc. 1-6%
HUM Humana, Inc. 1-6%
MCIC MCI Communications Corporation 1-6%
BLDG NCI Building Systems, Inc. 1-6%
NUE Nucor Corporation 1-6%
OSSI Outback Steakhouse, Inc. 1-6%
PFGC Performance Food Group Company 1-6%
OAKS River Oaks Furniture, Inc. 1-6%
RML Russell Corporation 1-6%
LODG ShoLodge, Inc. 1-6%
STTX Steel Technologies, Inc. 1-6%
SMRT Stein Mart, Inc. 1-6%
______ _____________
Total Investments 100% $
====== =============
</TABLE>
[FN]
(1) All Equity Securities are represented by regular way contracts
to purchase such Equity Securities for the performance of which
an irrevocable letter of credit has been deposited with the Trustee.
The contracts to purchase Equity Securities were entered into
by the Sponsor on , 1995.
(2) The cost of the Equity Securities to the Trust represents
the aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the last sale prices of the
listed Equity Securities and the ask prices of the over-the-counter
traded Equity Securities on the business day prior to the Initial
Date of Deposit). The valuation of the Equity Securities has been
determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Equity Securities on the Initial
Date of Deposit was $ . Cost and loss to Sponsor relating
to the Equity Securities sold to the Trust were $ and
$ , respectively.
(3) The portfolio may contain additional Equity Securities each
of which will not exceed approximately 6% of the Aggregate Offering
Price. Although it is not the Sponsor's intention, certain of
the Equity Securities listed above may not be included in the
final portfolio. Also, the percentages of the Aggregate Offering
Price for the Equity Securities are approximate amounts and may
vary in the final portfolio.
Page 27
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
Southeast Value Trust, Series 1
The First Trust Special Situations Trust, Series 121:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 6
Why are Investments in the Trust Suitable for
Retirement Plans? 9
Portfolio:
What are Equity Securities? 9
Risk Factors 10
How Were the Equity Securities Selected? 11
What are the Equity Securities Selected
for Southeast Value Trust, Series 1? 11
What are Some Additional Considerations
for Investors? 13
Public Offering:
How is the Public Offering Price Determined? 14
How are Units Distributed? 15
What are the Sponsor's and Underwriter's
Profits? 16
Will There be a Secondary Market? 16
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 17
How are Income and Capital Distributed? 17
What Reports will Unit Holders Receive? 18
How May Units be Redeemed? 18
How May Units be Purchased by the Sponsor
or Underwriter? 20
How May Equity Securities be Removed
from the Trust? 20
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 21
Who is the Sponsor? 21
Who is the Trustee? 21
Limitations on Liabilities of Sponsor
and Trustee 22
Who is the Evaluator? 22
Other Information:
How May the Indenture be
Amended or Terminated? 22
Legal Opinions 23
Experts 23
Underwriting 23
Report of Independent Auditors 25
Statement of Net Assets 26
Notes to Statement of Net Assets 26
Schedule of Investments 27
</TABLE>
___________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION
TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET
FORTH IN THE REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO,
WHICH THE FUND HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS HEREBY MADE.
J.C. Bradford & Co.
Southeast Value Trust,
Series 1
J.C. Bradford & Co.
330 Commerce Street
Nashville, Tennessee 37201-1809
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
, 1995
Page 28
MEMORANDUM
Re: The First Trust Special Situations Trust, Series 121
As indicated in our cover letter transmitting the
Registration Statement on Form S-6 and other related material
under the Securities Act of 1933 to the Commission, the only
difference of consequence (except as described below) between The
First Trust Special Situations Trust, Series 119, which is the
current fund, and The First Trust Special Situations Trust,
Series 121, the filing of which this memorandum accompanies, is
the change in the series number. The list of bonds comprising
the Fund, the evaluation, record and distribution dates and other
changes pertaining specifically to the new series, such as size
and number of Units in the Fund and the statement of condition of
the new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 119 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the bonds deposited in the Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Broker's Fidelity
Bond, in the total amount of $1,000,000, the insurer
being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
121 has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
Village of Lisle and State of Illinois on May 31, 1995.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 121
(Registrant)
By: NIKE SECURITIES L.P.
(Depositor)
By Carlos E. Nardo
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director of
Nike Securities May 31, 1995
Corporation, the
General Partner of
Nike Securities L.P. Carlos E. Nardo
Attorney-in-Fact**
___________________________
* The title of the person named herein represents his capacity
in and relationship to Nike Securities L.P., the Depositor.
** An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with Amendment No. 1 to form S-6 of The First Trust Special
Situations Trust, Series 18 (File No. 33-42683) and the same
is hereby incorporated by this reference.
S-2
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF ERNST & YOUNG LLP
The consent of Ernst & Young LLP to the use of its name and
to the reference to such firm in the Prospectus included in this
Registration Statement will be filed by amendment.
CONSENT OF 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 is filed as
Exhibit 4.1 to the Registration Statement.
S-3
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and Nike
Financial Advisory Services L.P. as Portfolio Supervisor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-43693] filed on behalf of The First Trust
Special Situations Trust, Series 22).
1.1.1* Form of Trust Agreement for Series 121 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 Corporaiton, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by
reference).
3.1* Opinion of counsel as to legality of Securities being
registered.
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
S-4
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
3.4* Opinion of counsel as to advancement of funds by Trustee.
4.1* Consent of 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).
___________________________________
* To be filed by amendment.
S-5
